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The purpose of this study is to investigate the effects of misfits between business strategy and management control systems on performance. We address the following research question: Do firms that align their management control systems with the specific requirements of their business strategy perform significantly better than those that do not achieve the required match? We define a misfit as the degree to which management control systems deviate from empirically derived optimal configurations for a given type of business strategy. We use the two-stage approach proposed by Ittner and Larcker (2001) to measure misfit and to investigate the impacts of misfit on performance. Based on a questionnaire survey of executives from 109 banks, we hypothesize and find that the strategy-control systems misfit has a significantly negative correlation with both self-rated and publicly available performance measures. RÉSUMÉLes auteurs ont pour but d'analyser les re´percussions qu'ont sur la performance les inade´quations entre les strate´gies d'entreprise et les syste`mes de controˆle de gestion. Ils se penchent sur la question suivante : « Les entreprises qui coordonnent leur syste`me de controˆle de gestion avec les exigences particulie`res de leur strate´gie d'entreprise affichent-elles une performance sensiblement meilleure que celles qui n'y parviennent pas ? » Selon les auteurs, l'inade´quation s'entend de la mesure dans laquelle les syste`mes de controˆle de gestion de´vient des configurations « optimales » de´rive´es de l'expe´rience, pour un type donne´de strate´gie d'entreprise. Ils utilisent l'approche en deux temps propose´e par Ittner et Larcker (2001) pour mesurer l'inade´quation et pour e´tudier les re´percussions de l'inade´quation sur la performance. À la lumie`re d'un sondage par questionnaire mene´aupre`s de cadres supe´rieurs de 109 banques, ils confirment l'hypothe`se formule´e selon laquelle l'inade´quation entre strate´gie et syste`me de controˆle pre´sente une corre´lation ne´gative significative avec les mesures de la performance, tant lorsque cette dernie`re est auto-e´value´e que lorsqu'il s'agit d'une donne´e accessible au public.

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The purpose of this study is to measure auditor quality of The Audit Board of the Republic of Indonesia (BPK) and investigates the effect of auditor quality on the follow-up of audit recommendation. This study uses sample of local government financial statements in Indonesia from 2010-2012. Using principle component analysis method, the result shows that there are four components extracted that form auditor quality which is experience, training, motivation, and education. All four components are then combined into a single auditor quality index that represents comprehensive measure of auditor quality. The test result shows positive effect between auditor quality and follow-up of audit recommendation. This indicates that high quality auditor is able to produce appropriate recommendations that can be easily followed up by the auditee. The more recommendations are acted upon, the better the quality of local government financial statements.

This research aims to examine the factors that influence auditor's job satisfaction, the effects of job satisfaction on performance and turnover intentions, and how far the performances moderate the relationship between job satisfaction and turnover intention. The unit of analysis from this study is an auditor who works on a public accounting firm. Results showed that in small accounting firms, only consideration leadership style affects auditor's satisfaction, while in big accounting firms, leadership style and structure leadership style have affected auditor's satisfaction. Considerate Leadership style has higher effect than structural leadership style. For auditors in the big accounting firms, the higher the auditors position, the greater the desire to leave accounting firms, but the longer the experience of the auditors, the lower the desire to move from the accounting firms. In this case it is necessary to have periodic promotion policy in the accounting firms. Job satisfaction has a positive influence on performance on all types of the accounting firms. If auditors are satisfied with the work, then their turnover intentions will be low. If auditors have low job satisfaction, they will leave the accounting firms, no matter their performance level because they only consider the accounting firms as stepping stone for their next career. So firms must consider auditors' job satisfaction if they do not want to lose their auditors.

Purpose The purpose of this study is to examine the performance consequences of misalignment among business strategy, organizational configurations and management accounting systems (MAS). Design/methodology/approach The authors conducted a questionnaire survey to collect data and test the hypotheses developed in this study. The authors sent the questionnaires to the accounting and finance managers of the manufacturing companies listed on the Indonesia Stock Exchange. The authors received 259 responses from a total of 579 questionnaires sent or a 44.73% response rate. This study excludes 36 responses for further analyzes due to incomplete responses (five responses) and responses from lower-level employees (31 responses). The remaining 223 responses are used for statistical analyzes. Findings This study hypothesizes and finds that misalignments among business strategy, leadership style, organizational culture and MAS are negatively associated with both financial and non-financial performance. Research limitations/implications The study has three limitations. First, the authors intentionally collect data from the manufacturing industry to minimize the effect of data heterogeneity. To improve the generalizability of the study, future research might consider using data from other industries. Second, the study measures business strategy based on respondents’ perception of their companies’ strategy using indicators representing either product differentiation or cost leadership strategy. Future studies might use different ways of measuring business strategy using more objective empirical proxies such as research and development expenditures or premium price capability. Finally, this study conducts a survey and measures all the variables in a single period. Future studies might use a longitudinal approach to investigate the evolution of companies’ strategies and their impact on leadership styles, organizational commitment and MAS. Practical implications The results of the study will help companies in their search for senior executives, in building their organizational culture and in implementing their MAS. The study suggests that product differentiation companies should search for transformational leaders that empower their subordinates to take initiative and encourage innovative ideas in performing their tasks. In regard to MAS, the results suggest that product differentiation companies should implement broad focus MAS that emphasize the balance between financial and non-financial factors. By contrast, cost leadership companies should search for transactional leaders who emphasize on completing tasks on hand effectively and efficiently. In regard to MAS, the findings suggest that cost leadership companies will benefit more from using narrow focus MAS such as formal planning and budgeting, variance analyzes and cost-volume-profit analyzes. Social implications The findings of the study suggest that product differentiation companies should build a flexible culture that encourages subordinates to take the risk and effectively manage opportunities and challenges through changes and innovation. Furthermore, cost leadership companies should build a controlled culture that promotes adherence to policies and procedures to minimize costs and increase efficiency. Originality/value This paper introduces to the management and accounting literature the concept of fit among competitive strategy, leadership style, organizational culture and MAS and uses the two-stage method proposed by Ittner and Larcker (2001) to measure the degree of misalignment among business strategy and its contextual variables and, in turn, examines the impacts of the misalignment on financial and non-financial performance.

<p class="JurnalASSETSABSTRAK">ABSTRAK</p><p>Penelitian ini bertujuan untuk memberikan bukti empiris tentang pengaruh <em>misfit</em> ketidakpastian bisnis yang dipersepsikan dengan sistem pengendalian manajemen (<em>levers of control</em>) terhadap kinerja keuangan dan kinerja non-keuangan hotel di Bali. Sampel penelitian adalah hotel klasifikasi bintang 1 sampai 5. Responden adalah manajer yang ditentukan melalui purposive sampling. 181 manajer berpartisipasi dengan mengembalikan kuesioner. Pengujian hipotesis penelitian menggunakan analisis regresi <em>misfit</em> residual dengan program SPSS. Hasil penelitian menunjukkan bahwa pengaruh misfit ketidakpastian bisnis yang dipersepsikan dengan sistem pengendalian manajemen memiliki pengaruh negatif terhadap kinerja keuangan dan kinerja non-keuangan. Analisis sensitivitas menggunakan pengukuran lain sistem pengendalian manajemen konsisten dengan hasil utama.</p><p class="JurnalASSETSABSTRAK"><em>ABSTRACT</em></p><em>This study aims to provide empirical evidence about the effect of misfit business uncertainty perceived by management control systems (levers of control) has a negative influence on financial performance and non-financial performance of hotels in Bali. The research sample is a 1 to 5 star classification hotel. Respondents are managers who are determined through purposive sampling. 181 managers participated by returning the questionnaire. Testing the research hypothesis using regression analysis of residual misfit with the SPSS program. The results showed that the effect of business uncertainty misfit perceived by management control systems had a negative influence on financial performance and non-financial performance. Sensitivity analysis uses other measurement management control systems consistent with the main results.</em>