Post on 31-Dec-2015
The Financial Close Process: Implications for Future Research Discussant Remarks
Elaine Mauldin UM
2013
Do We Care?
• Motivation – From the introduction, goal is to:– Enhance understanding
of the current financial close process
– Provide practical recommendations to companies to improve
– Develop recommendations for future research
YES! Surprisingly Novel! • Little research exists • High Risk Process
Research Design?
• Qualitative field investigation interviewing 11 individuals
• Directors of financial analysis to corporate controllers
• Manufacturing, Utility, and Financial Services
Yes!Given how little we know, and lack of publicly observable data
An Aside:
This is NOT Easy!
Match the Method to the ?• “The use of theories from organizational sociology,
psychology and economics, in combination with patterns in organizational practice can constantly build upon and enrich the theoretical basis from which, ultimately, textbook and consultancy prescriptions materialize.” (Lillis 2008)
• “In this study, we engage prior research in financial accounting, psychology, regulation, and information systems…to provide a systematic examination of the role of four factors”
• But, “Connecting empirical observations back to the theory that motivated the study is an essential research task.” (Lillis 2008)
• Not enough theory to make this approach work well?• Does it tie closely to the original question?
Enhance understanding of
the current financial close
process
An Alternative Approach• “Qualitative research can be used to build our
understanding of the “how” and “why” of management accounting practice, how these practices respond to real organizational settings and to explore the logic that drives the evolution and adaptation of practice. (Lillis 2008)
• Suggest a more descriptive, exploratory approach • Explore the process – rather than forcing the interviews into
4 factors• More fully utilize second page of Appendix A – incorporate
four factors as part of process
Matching Data to ?
• Are the interviewees at a high enough level? Versus CFO?
• Can you capitalize on different industries that seem to have very different close process issues?
• Separate Financial Close Processes (Figure 1)?– Internal Controls versus– Financial Close
A Few Final Questions
• How extensive is integration?• Only 3 respondents indicated
integration risks – suggests remaining are more integrated???
• Is the estimation process separate from the financial close process?
• Is the now “routine” XBRL tagging process still part of the financial close process?