Balancing the Dual Responsibilities of Business Unit Controllers: Field and Survey Evidence

Posted: 15 Feb 2007 Last revised: 29 Mar 2013

See all articles by Victor S. Maas

Victor S. Maas

University of Amsterdam Business School

Michal Matejka

Arizona State University

Date Written: December 11, 2008

Abstract

We examine how business unit (BU) controllers balance their dual roles of providing information for both local decision making (local responsibility) and corporate control (functional responsibility). The existing literature suggests that organizations can improve the quality of financial reporting and internal controls by increasing the emphasis on the functional responsibility of BU controllers. In this study, we rely on prior literature and insights from field interviews to argue that such an increase also leads to role ambiguity and conflict, which in turn can lead to an increased tolerance of data misreporting. We test our predictions using survey responses of 134 BU controllers. As predicted, we find that the emphasis on the functional responsibility of BU controllers is positively associated with role conflict and role ambiguity, both of which are antecedents of data misreporting at the BU level.

Keywords: Controllers, management accountants, role conflict, role ambiguity, earnings management, budgeting

JEL Classification: C93, M10, M40, M54

Suggested Citation

Maas, Victor S. and Matejka, Michal, Balancing the Dual Responsibilities of Business Unit Controllers: Field and Survey Evidence (December 11, 2008). Accounting Review, Vol. 84, No. 4, 2009. Available at SSRN: https://ssrn.com/abstract=963141

Victor S. Maas (Contact Author)

University of Amsterdam Business School ( email )

Plantage Muidergracht 12
Amsterdam, 1018TV
Netherlands

Michal Matejka

Arizona State University ( email )

Tempe, AZ 85287-3706
United States
480-965-7984 (Phone)

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