In Search of Management Accounting Theory

Abstract

In this article we discuss management accounting theory. We discuss the motivation for and role of theory in management accounting, arguing that theories in an applied field such as management accounting should provide explanations that are useful for those we study - managers, organizations and society. We evaluate the nature of theories currently used and developed. Those theories that are considered theories by the research community are largely imported from other social sciences, but have hardly anything that makes them unique to management accounting. Those theories that do not currently deserve the status of theory attempt to explain how to apply management accounting to achieve superior performance. We argue that both forms of theories, at present, largely fail to provide valid support for practitioners. We contend that management accounting theory should help us to answer questions of what methods we should apply, how, in what circumstances, and how to change management accounting. We provide suggestions on how management accounting research could proceed to produce better theories.

Keywords: Management accounting theory, practice relevance, pragmatism, normative research

JEL Classification: M40, M46