THE JOURNAL OF APPLIED MANAGEMENT ACCOUNTING RESEARCH

JAMAR Information

Table of Contents

EDITORIAL

Green Marketing and Misleading Statements: The Case of Saab in Australia

Authors: Paul Sergius Koku, Janek Ratnatunga

This paper is a case study that provides an overview of The Deceptive and Misleading Advertising laws. It focuses on the case brought against GM Holden Ltd (Saab) in Australia in 2008 by the Australian Competition and Consumer Commission (ACCC) and highlights the trip wires that other advertisers must be aware of. It also compares the ACCC’s Deceptive and Misleading Advertising Law with United States’ Federal Trade Commission’s laws on Deceptive and Misleading Advertising and provides insights for practitioners.

ARTICLES

The Effects of the Diagnostic and Interactive Use of Management Control Systems on the Strategy-Performance Relationship

Authors: Nirosha Dilhani, Kapu Arachchilage, Malcolm Smith

In recent years there has been an increased interest in examining the relationships among management control systems (MCS), business strategy and organizational performance. In this study, the moderating effects created by two uses of MCS (diagnostic use and interactive use as per Simon’s ‘levers of control’ framework) on strategy-performance relationship are examined.

The results of the survey-based research support the postulate that these two uses moderate the relationship between business strategy and performance. However, it is found that the moderating effect created by the diagnostic use of MCS is more significant when the cost leadership strategy is used for performance.

No evidence is found in favor of Porter’s proposition on mutual exclusiveness of business strategies for better performance. Consequently, the results of this study have important implications for both management practice and the academic literature.

Investigating the Determinants of Perceived Procedural Fairness in Performance Evaluation

Authors: Mahfud Sholihin, Richard Pike

Previous management accounting and control system studies have examined the impact of perceived procedural fairness on managers’ attitudes and behaviour. However, relatively little research has been conducted on the factors which affect perceived procedural fairness; and their results are inconclusive. The objective of this paper is to investigate the main determinants of perceived procedural fairness.

Using a sample of managers from three major organisations with headquarters in Europe, this study finds that perceived procedural fairness is affected by goal-related variables in the form of participation in setting performance targets, the goal-attainment-reward link, and the specificity of goals to be achieved by managers; but is not affected by whether the performance measures used to evaluate performance are primarily financial or nonfinancial.

Corporate Governance, Firm Characteristics and Earnings Management in an Emerging Economy

Authors: Nelson M Waweru, George K. Riro

The main objective of this paper is to investigate the influence of corporate governance and firm specific characteristics on earnings management by Kenyan listed companies. Using panel data of 148-firm years obtained from the annual reports of the 37 companies listed on the Nairobi Stock Exchange (NSE), the study found that ownership structure and Board Composition were the main corporate governance characteristics influencing earnings management by Kenyan listed Companies.

Highly leveraged firms were found to be more likely to engage in earnings management. The results of this study are important to the Kenya Capital Markets Authority (KCMA) and other accounting regulators in Kenya, in the determination of whether to develop more corporate governance guidelines so as to improve the quality of information reported by Listed Companies. The study is also important to investors in developing countries, who must interpret financial statement numbers reported in the companies while making investment decisions. Furthermore, the study contributes to our understanding of how corporate governance influences financial reporting in developing economies, such as Kenya.

Beyond Ceremony: The Impact of Local Wisdom on Public Participation in Local Government Budgeting

Authors: Ana Sopanah, Made Sudarma, Unti Ludigdo, Ali Djamhuri

This paper reveals that public participation in local government budgeting can be practiced fully by the people, and not merely a ceremonial process as shown by earlier literature on such processes. Prior research has focused on the district level and found that participation in local government budgeting is still assumed to be merely a formality, done as part of a required ceremony to fulfil certain local government obligations. However, at the micro-community level, this paper shows that public participation is truly holistic, and practiced beyond mere ceremonial formalities. This research was of the Tenggeresse people, an aboriginal community at Bromo Mountain, East Java, Indonesia. An interpretive paradigm with an ethnomethodology approach was employed to reveal the existence of local values of Tenggeresse when participating in local budgeting; centring around being peaceful and looking after the welfare of others. These values of local wisdom are internalised in the planning, implementation and transparent responsibility aspects of public participation in local government budgeting.