Assessing empirical research in managerial accounting: a value-based management perspective

Journal of Accounting and Economics 32 (2001) 349–410

Assessing empirical research in managerial accounting: a value-based management perspective$
Christopher D. Ittner*, David F. Larcker
Accounting Department, The Wharton School, University of Pennsylvania, Steinberg Hall-Dietrich Hall, 3620 Locust Walk, Philadelphia, PA19104-6365, USA Received 3 February 2000; received in revised form 11 January 2001

Abstract This paper applies a value-based management framework to critically review empirical research in managerial accounting. This framework enables us to place the exceptionally diverse set of managerial accounting studies from the past several decades into an integrated structure. Our synthesis highlights the many consistent results in prior research, identifies remaining gaps and inconsistencies, discusses common methodological and econometric problems, and suggests fruitful avenues for future managerial accounting research. r 2001 Elsevier Science B.V. All rights reserved.
JEL classification: D2; J3; L2; M4 Keywords: Managerial accounting; Value-based management; Performance measurement

We thank Lawrence Gordon, S.P. Kothari, Thomas Lys, Michael Shields, Jerry Zimmerman, and participants at the 2000 Journal of Accounting and Economics Conference for their comments. We also thank the Cap Gemini Ernst & Young Center for Business Innovation, the Consortium for Alternative Reward Strategies Research, iQuantic Inc., and Watson Wyatt & Company for providing data used in the discussion. *Corresponding author. Tel.: [phone]; fax: [phone]. E-mail address: [e-mail] (C.D. Ittner). 0165-4101/01/$ - see front matter r 2001 Elsevier Science B.V. All rights reserved. PII: S 0 1 6 5 - 4 1 0 1 ( 0 1 ) 0 0 0 2 6 - X

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C.D. Ittner, D.F. Larcker / Journal of Accounting and Economics 32 (2001) 349–410

1. Introduction The past two decades have witnessed considerable change in managerial accounting practice. From its traditional