Dynamic Accounting Information System Capabilities And Top Managers’Cognitive Capabilities | Posted on:2021-06-11 | Degree:Doctor | Type:Dissertation | Country:China | Candidate:R K ( P a t r i c k R e g i | Full Text:PDF | GTID:1489306050481224 | Subject:Business management | Abstract/Summary: | PDF Full Text Request | Drawing from dynamic capabilities theory,this study shows that dynamic accounting information systems capabilities can be aligned with firms’ internal controls to improve both financial performance and tax management of firms.Using data from the survey of 206 firms and partial least squares structural equation modelling data analysis method,the study shows that internal controls are very good mediators of firms’ dynamic accounting information system capabilities and firms’outcomes of proper financial performance and better tax management practices.This further improves earlier studies on the relationship between dynamic accounting information system capabilities and financial performance and gives new insights on the effects on tax management for firms.Similar mediation effects have been observed with managers’ cognitive capabilities impact on tax management and financial performance.Internal controls implemented in firms provide important mechanisms that ensures that firms’ performance is improved through the process of prevention of errors and irregularities.Firms implement two types of such controls,the general controls and tax related controls.Tax specific controls have targeted firms’ improvements in the tax management process.This study also shows that tax specific controls play major roles in both improving financial performance of firms and in tax management better than the traditional general internal controls.The study also shows that with the presence of strong tax related controls,the effect of general controls on firms’ performance is not significant.Lack of clarity on how changing environments and cognitive capabilities of top managers align with dynamic capabilities to affect firms’ internal controls has made this study further explore these effects.The study shows that stronger environmental dynamism has positive moderation effects on the relationship between frequent reconfiguring aspects of dynamic accounting information system capabilities and firm’s internal controls and negative moderation effects on the relationship between the frequent sensing of the environment aspect and firms’ internal controls.The moderation effects of environmental dynamism and managers’ cognitive capabilities passes through internal controls mediators to the firms’outcomes of financial performance and tax management.Similarly,top managers’ cognitive capabilities have been proved to moderate relationships between dynamic accounting information system capabilities and firms’ internal controls.Cognitive capabilities were measured through the proxy of gender of the Chief Finance Officer(CFO).Results show that when the gender of the CFO is female,frequent reconfiguration aspects of dynamic accounting information system capabilities exerts higher effects on internal controls.On the other hand,frequent sensing of the environment aspect of dynamic accounting information system capabilities have higher influence on internal controls when the gender of the CFO is male.The study provides a methodological support to the accounting field which heavily relies on archival research methodologies.Studies on accounting information systems are very few compared to other information system fields due to limited use of subjective research methods in accounting.This study provides consistent results with the extant accounting literature on the influence of managers’ cognitive capabilities and dynamic capabilities on financial performance.This consistency in results encourages further studies using subjective procedures.Previous studies have combined archival data with some proxies to measure accounting information system usage in firms.Such proxies are also subjective and this study suggests a more direct but subjective measurement scale.The study concludes that in order for firms to have better financial performance and tax management practices,they should invest in dynamic accounting information system capabilities and hire top managers with high cognitive capabilities suitable for firms’unique environments.Internal controls of firms will mediate such relationships and therefore firms must pay attention to these internal mechanisms as.well.Environmental dynamism and managers’ cognition capabilities can also play major roles in influencing how dynamic accounting information system capabilities can influence internal controls and hence financial performance and tax management of firms through the moderated mediation process. | Keywords/Search Tags: | Internal Controls, Dynamic Accounting Information System Capabilities, Tax Management, General Controls, Tax-related Controls, Environmental Dynamism, Manager Cognitive Capabilities | PDF Full Text Request | Related items |
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