The theory and progression in the field of accounting
This paper has been elaborated on identifying a total of four relevant scholarly sources for the research paper on the topic of innovation on accounting and its impact on businesses. It shall present a brief literature review of the four articles in general, discussing the summary of the theory and progression in the field of accounting as well as analysing both the common as well as different themes across the four articles. Along with this, the managerial implications of the four articles along with the study limitations and future research direction proposed in the four articles have also been assessed.
Accounting is one of the subjects that has been transformed by technologies over the past few years. The evolution of the accounting software, mobility, web enables communication and cloud, all have left a significant mark in this field and have changed the everyday activities of an accountant in contemporary world of improved science and technological advancements. Sadikoglu and Zehir (2010) in their article “Investigating the effects of innovation and employee performance on the relationship between total quality management practices and firm performance” have considered TQM (total Quality Management) as one of the significant innovations in the field of accounting. They have proposed that there is a strong relation in between the TQM and the performance of the firms and this effects the TQM practices. The main aim of this article is to investigate on this relationship as well as to examine the mediating effects of employee performance and innovation performance on the relationship between TQM practices and firm performance. Furthermore, Michelino et al. (2015) on their studies have investigated on the various business models for the OI (Open Innovation). Although there is much attention paid on the OI by various different researchers and scholars, only few efforts have been made in order to analyse the same after a pecuniary perspective by means of evaluating the costs that are related to the acquisition of the external knowledge along with the revenues that derive from the explosion of the internal technologies in the external market. They have suggested an accounting-based framework for defining open innovation adoption modalities through the analysis of annual reports. With the same, they have also described five different models in regards to revenues, costs, divestments and new investments in the knowledge assets and intangibles in relation to the OI in accounting. It is also to note that this study has revealed and proposed the fact that the usage of cloud in the field of account is one of the significant innovation that have improved the operations in this field and has made things easier for the businesses. Also, it would continue to expand further. With the same, Raghavan and Thomas (2014) in their study have claimed that the technological advancements and financial prosperity have led to long periods of stability for the accounting education. They have conducted a review on the basis of corporate governance, finance and accounting. Lastly, Fu et al. (2015) have claimed that accounting related innovations have contributed to a great extent in developing effective corporate governance in businesses today.
Common Themes and findings across the four articles
The most common themes of all these four articles is that each of these articles is based on discussing some or the other innovations in the field of accounting in recent years. With the same, these articles have also discussed the ways how these innovations on accounting are helping the businesses in recent years. Sadikoglu and Zehir (2010) have discussed about the relation in between the TQM and the performance of the firms and this effects the TQM practices which is also considered to be a significant innovation in accounting. Raghavan and Thomas (2014) have also discussed about the technological advancements and financial prosperity in the field of accounting and related businesses. Innovations based on accounting are effective for the organizations in this sector. The relationship of corporate governance with finance and accounting has been analysed by Fu et al. (2015). The researchers have highlighted the value creation chain for the managers in PSFs. It is also to note that the PSFs that have a high level of HPWS utilization are linked with better innovation performance. With the same, Michelino et al. (2015) also have investigated on the business models for the OI in the accounting sector.
The findings by Michelino et al. (2015) have evaluated the costs related to the acquisition of the external knowledge along with the revenues that derive from exploiting internal technologies in the external market. It has explained the role that is played by the internal and external technologies and knowledge. The findings which have been made in the article by Sadikoglu and Zehir (2010) related to accounting innovation are based on the innovations which had taken place in the year 2010. It has also has proposed the fact that the usage of cloud in the field of accounting. The arguments are related to empirical evidence that are taken from the Turkish firms. Furthermore, Raghavan and Thomas (2014) have discussed the ideas based on the innovations related to effective operations of businesses based on accounting. It is also to note that transformation of the contemporary firms has been a major theme and on the basis of this analysis has been made in the article by Fu et al. (2015). The findings of this study provide some empirical evidences for a chain of mechanisms by which HPWS (high-performance work systems), firm innovation and overall organizational performance are interrelated.
The usage of the objective data from the annual reports in the article of Michelino et al. (2015) also has some practical implications in terms of both availability and comparability. The framework provided by them can help the innovation managers by providing them an objective tool for assess and analysing the status of their own open processes as well as for comparing the same over time and space. It would also help them in allowing the benchmarking with their competitors in the business market. Moreover, through the findings on the mediating model of HPWS and firm innovation via IWB of employees in article by Fu et al. (2015) the researchers have highlighted the value creation chain for the managers in PSFs. It is also to note that the PSFs that have a high level of HPWS utilization are linked with better innovation performance. The use of HPWS needs to focus on the promotion of employees’ IWB that in turn improves the organizational innovation. Also, the managerial implications that are provided by the article by Sadikoglu and Zehir (2010) are related to the effectiveness of innovation in the field of accounting and its impacts. The managers could learn the various different methods by means of which accounting play a significant role in the field of crisis situations that take place within the businesses today. It is also to mention that the fair value based accounting innovations can also be analysed by the managers and can be implemented widely in business operations. Moreover, the meaningfulness of the reporting activities within the modern businesses can be analysed by the managers in really effective manner. Furthermore, managers could also make use of cloud in the field of account as it is one of the significant innovation that have improved the operations in this field and has made things easier for the businesses all over the world.
In the study conducted by Michelino et al. (2015), there are certain limitations such as the approach of these researchers are based on the intensity of the outcomes of the open activities on the whole business of the organisations instead of on a particular entity of such activities. Secondly, as it is focused on the accounting indicators, the framework cannot be applied to such industries like the software industry where non-pecuniary approaches to OI are widely spread. Hence, the future research should integrate the framework with a new perspective on the basis of both the entity of the transactions as well as the survey-based literature approach. Moreover, the limitations in the research of Fu et al. (2015) is that this study have used small sample size and is single industry focus along with cross-sectional design. With the same, this study is also limited in the examination of IWB (innovative work behaviours) of the employees in which it only considers the contextual factor of HPWS (high-performance work systems). It is also to note that the review of the corporate governance and accounting is also highly generalised. With the same, it is not based on any of the sectors. This results in lack of explanation of the impacts which corporate governance has on businesses today that are belonging from different sectors and industries.
References:
Fu, N., Flood, P.C., Bosak, J., Morris, T. and O’Regan, P., 2015. How do high performance work systems influence organizational innovation in professional service firms?. Employee Relations, 37(2), pp.209-231.
Michelino, F., Lamberti, E., Cammarano, A. and Caputo, M., 2015. Open models for innovation: an accounting–based perspective. International Journal of Technology Management, 68(1-2), pp.99-121.
Raghavan, K. and Thomas, E.R., 2014. Instability, Innovation and Accounting Education. Journal of Accounting & Finance (2158-3625), 14(2).
Sadikoglu, E. and Zehir, C., 2010. Investigating the effects of innovation and employee performance on the relationship between total quality management practices and firm performance: An empirical study of Turkish firms. International journal of production economics, 127(1), pp.13-26.
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