PurposeThis paper investigates the use of management controls when environmental uncertainty and hostility increase abruptly. Specifically, it explores this in the context of the 2008 financial crisis in six banks located in two countries.Design/methodology/approachThe paper is based on 26 qualitative interviews with selected managers employed by the six banks. Eight interview guides were developed based on the typology of controls in Malmi and Brown (2008). Respondents explained which changes in management controls occurred after the crisis.FindingsBoth organic and mechanistic management controls were mobilized at the same time to deal with the change. The use of controls played three main roles: (1) guide and control behavior, (2) change internal and external perceptions and (3) discharge accountability. Finally, control use during a crisis evolves as individual managers design and implement controls. There is no “grand design” rationally guiding the design of the overall system of controls.Originality/valueThe use of management controls in dealing with an increase in uncertainty and hostility cannot be labeled either organic or mechanistic, but will depend on the specific type of change in environmental characteristics. Management controls evolve by interaction with outside actors, as well as internal techniques.

Notwithstanding its sectoral importance to wealth creation and employment, research on the role of management accounting in small and medium-sized enterprises (SMEs) is limited. This paper first examines the perceptions of chief financial officers (CFOs) on the impact of information technology (IT) tools on management accounting practices (costing, budgeting, and performance management). Secondly, it examines how CFOs perceive these management accounting practices are affecting the performance of their SMEs. The study is based on a survey of CFOs in Irish SMEs. We propose a conceptual model of these relationships. We use partial least squares (PLS) to analyse the data from the 109 participating CFOs. The results show a significant positive relationship between IT tools and all three management accounting practices, along with significant partial support for how CFOs perceive management accounting practices impacting the performance of their SMEs.

Purpose This paper aims to explore and explain how administrative controls have been changed as a response to a significant crisis, using the transition of the three largest Icelandic banks from bankrupt to operational entities after the 2008 financial crisis. The Icelandic banks are compared with three Danish banks to separate crisis-driven responses from simple market-driven reactions. Design/methodology/approach Empirical data were collected using semi-structured interviews. The participating Icelandic and Danish banks were considered as two units, which formed the basis for a comparative case study between the two countries. Findings Driven by an understanding of what is expected by the market rather than the need to inform and guide the employees the Icelandic banks implemented a number of revolutionary and formally documented changes. These changes included significant bigger risk management functions and policies and procedures documenting “everything”. However, in both countries, it seems that new values supported by the “tone at the top”, areas with limited formal documentation, are the most important management tools. Research limitations/implications The study relies on interviews with employees, and the actual changes of administrative controls have not been reviewed. The most important implication is that the situated logics in Iceland driven by external institutional pressure initiated a revolutionary implementation of values bypassing existing routines and formalised rules. Originality/value Although the use of management controls has been studied intensively, detailed studies of the banking sector have been lacking. Furthermore, there is limited knowledge of how administrative controls changed in response to the financial crisis.

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Auditing is a field of expertise often mentioned as being ripe for automation using artificial intelligence methods at all levels of operations. Primarily, the application of artificial intelligence (AI) in the auditing profession is done by and for large organizations, leveraging large datasets. While AI approaches for big data are continually improving, methods for small data are scarce. Yet most firms in the world employ fewer than 50 people and can, therefore, rarely rely on big data for automation. In our study, we ask auditors, who mainly audit SMEs, about their expectations towards the impact of AI on the auditing profession and where they expect it to provide the most value when it comes to auditing SMEs. We find that these auditors expect significant improvements in their own efficiency on the job, that learning to use AI applications will not be a challenge for them, and that the use of AI in auditing firms will become mandatory in the future. They expect the performance of certain tasks to become AI-augmented, including risk assessment of individual transactions, conducting audit interviews, performing all manners of analysis, writing confirmation letters, performing the final verification of annual reports, and performing physical observations. Considering these results, we discuss the potential impact of these developments, such as how AI could make the auditing process more effective and efficient but also how AI could lead to an even higher concentration of the auditing service industry.