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The Financial C lose P rocess : Implications for Future R esearch

The Financial C lose P rocess : Implications for Future R esearch . Discussant Remarks Elaine Mauldin UM 2013. Do We Care?. Motivation – From the introduction, goal is to: Enhance understanding of the current financial close process

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The Financial C lose P rocess : Implications for Future R esearch

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  1. The Financial Close Process: Implications for Future Research Discussant Remarks Elaine Mauldin UM 2013

  2. 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

  3. Research Design? An Aside: This is NOT Easy! • 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

  4. Presentation & Analyses Can we add more value?

  5. 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

  6. 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

  7. Appendix A Interview Questions

  8. 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

  9. Financial Close Process Model

  10. 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?

  11. Thanks for Listening & Best Wishes to Authors

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