Balancing the dual responsibilities of business unit controllers: Field and survey evidence

Victor S. Maas, Michal Matějka

Research output: Contribution to journalArticle

64 Scopus citations

Abstract

We examine how business unit (BU) controllers balance their dual roles of providing information for both local decision-making (local responsibility) and cor porate control (functional responsibility). The existing literature suggests that organi zations 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 con trollers. 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 related to data misreporting at the BU level.

Original languageEnglish (US)
Pages (from-to)1233-1253
Number of pages21
JournalAccounting Review
Volume84
Issue number4
DOIs
StatePublished - Jul 1 2009
Externally publishedYes

Keywords

  • Controllers
  • Earnings management
  • Role ambiguity
  • Role conflict

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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