Applying the first-in first-out method (FIFO) to the cumulative method in a process cost accounting system is likely to mislead cost management activities. This is because the beginning work-in-process cost of the previous-process has an impact on the ending work-in-process cost of post-processes, despite the fact that in the cumulative method with FIFO the calculation method assumes that the beginning work-in-process will be completed first. In this paper, by modeling the calculation structure of the cumulative method with FIFO, we find out the degree of impact of the beginning work-in-process cost in the previous process on the ending work-in-process cost in the post-processes, f^(j→j). Furthermore, we clarify the problems inherent in the cumulative method with FIFO, and then we consider the possibility of misleading cost management activities. Our finding is that it is important to measure the degree of impact on the ending work-in-process cost in the post-processes from the beginning work-in-process cost in the previous process, and to share this information between managers of each process.

The purpose of this paper is to investigate the relationship between earnings management and the business field through the inter-industry comparison of earnings management. The level of earnings management in each industry is quantified by methods proposed by Leuz et al. (2003), which are international comparison research on earnings management. Employing data obtained from 25,208 non-financial firm-year observations from 2004 to 2011, results show that there is a significant difference in the level of earnings management among industries as categorized by the Securities Identification Code Committee (33 sectors), and that (1) governmental regulation, (2) firm size, (3) financing methods, and (4) accounting flexibility determine these differences. These results are robust when Nikkei 36 industry classifications are used.

Prior studies have reported inconsistent findings about effects of customer satisfaction on financial outcomes. This paper explores both managers' beliefs about the relationship between them and management practice for improving their performance through a case study on management systems for taking control of customer satisfaction at Hoshino Resort Inc.

While there is the belief that customer satisfaction should lead to operating profits in the company, a causal mechanism supporting the belief is not perfectly found there. This study implies even though a causal relationship between customer satisfaction and financial outcomes is unspecified, the company develops management control systems as a package to pursue increases in financial outcomes with simultaneous improvements in customer satisfaction.

This paper examines how budgeting can be used to enable lower level managers to create innovation and strategic change in a rapidly changing environment. In the case company management accounting calculations and budgeting rhythms provided the structure for the strategic context and led to the creation of new product innovations. While budget targets were fixed the firm altered their strategy and actions plans in an ad hoc way so as to react to changes in the environment. In particular, this paper shows how new product innovations were created to enable the firm to meet their budget targets. Using budget-variance analysis the managers at the case company were able to continually synchronize their product roadmaps with the budget, through budget target accountability. Furthermore, the budget provided a framework to interpret the uncertain competitive environment and enabled interactions between the environment and organizational activities, which determined the scale, space, speed and timing of product innovation.

The purpose of this study is to investigate the relationship between an internal control (IC) with a strategic performance measurement system (SPMS). It has been explained that a rigid IC supports effective management accounting systems. However, there is little empirical evidence on it Then, this study examines a mediation effect, in which a rigor of IC leads to performance through a development of SPMS, and a moderation effect, in which the effect of the development on performance depends on the degree of the rigor. Using survey data from 314 business units of Japanese listed companies, it appears that the rigid IC is indirectly related to performance through the development of SPMS, whereas the rigor weakens the positive effect of the development of SPMS on performance. These findings imply that IC has a great influence upon the effectiveness of management accounting systems. Implications and insights are discussed, along with ideas for future research.