CHANGES IN MANAGEMENT ACCOUNTING RELATED ROLES OF SMALL BUSINESS CHIEF FINANCIAL OFFICERS Pall Rikhardsson PhD, Associate professor, Reykjavik University Thorlakur Karlsson PhD, Associate professor, Reykjavik University Catherine Batt Master of Management Accounting, PhD fellow, Reykjavik University

ICEMAC 1 COST ACCOUNTING BUDGETING PERFORMANCE MEASUREMENT INTERNAL CONTROL USE OF INFORMATION TECHNOLOGY THE CFO FUNCTION ICEMAC 2 COST ACCOUNTING BUDGETING PERFORMANCE MEASUREMENT INTERNAL CONTROL USE OF INFORMATION TECHNOLOGY THE CFO FUNCTION CRASH Icelandic Management Accounting (ICEMAC) Projects Funded by the Icelandic Research Council in both 2008 and 2014 Survey population is the 300 largest companies in Iceland Cross section of ownership, size and industry. Represents more than 80% of total turnover of Icelandic companies 233 out of the 300 companies surveyed are small businesses based on the EU definition Questionnaire with more than 100 questions about management accounting and control 184 company CFOs (61%) responded June - July small businesses and 51 large enterprises responded Questionnaire with more than 100 questions about management accounting and control 191 company CFOs (63%) responded August – September small businesses and 52 large enterprises

Author and role (see list of reference for full title and reference) Empirical sampleRole/roles of the CFO and or/changes identified Kaplan & Cooper (Academics) 2002No specific sample referred to Designer of a holistic performance and cost measurement system Four stage evolution model: 1.Broken cost systems 2.Financial reporting driven 3.Specialized 4.Integrated Hope (Academic) 2006 No specific sample referred to apart from the members of the Beyond Budgeting Round Table 1.Freedom fighter 2.Analyst and Adviser 3.Architect of Adaptive management 4.Warrior against waste 5.Master of measurement 6.Regulator of risk 7.Champion of Change McKinsey (Consulting firm) CFOs from large companies in various countries 1.Value managers 2.Business Partners 3.Process managers 4.Bean counters EY (Auditing firm) 2010 An international sample of 696 financial professionals 1.Ensuring business decisions are grounded in financial criteria 2.Providing insight and analysis 3.Leading key initiatives 4.Funding 5.Developing and defining the overall strategy 6.Representing progress to stakeholders Eber et al.(Academics) CFOs and their CEO counterparts 1.Leader 2.Full partner 3.Resource IFAC Professional association) 2013No specific sample referred to 1.Value creation 2.Value enabling 3.Value preserving 4.Value reporting Boyden (Headhunting firm) 2014 Interviews of 9 CFOs in international organizations 1.Performance Accelerators 2.Value integrators 3.Disciplined operators 4.Constrained advisors 5.Scorekeepers Carace & Juras (Academics) 2014 Interviews with 40 CFOs from 9 different industries 1.Catalyst 2.Collaborator 3.Consultant 4.Conscience Deloitte (Auditing firm) 2014None specific sample referred to but Deloitte’s CFO surveys include between 100 and 120 responses from CFOs where they are conducted 1.Strategist 2.Operator 3.Steward 4.Catalyst Relevance of this research CFOs as Bookkeepers Controllers Resource Scorekeepers CFOs as Bookkeepers Controllers Resource Scorekeepers CFOs as Decision enablers Consultants Change agents Creators of business value What about small businesses? What about changes over time?

Research questions What roles do small business CFOs play, do they differ from large enterprise CFOs and have these changed since 2008? What management accounting knowledge do they emphasize, do they differ from large enterprise CFOs and has this changed since 2008?

Roles of the small business CFO Small businesses rate significantly more emphasis than large enterprises Significant difference in small business answers between 2008 and 2014

What knowledge domains are emphasized by the CFO? Small businesses rate significantly more emphasis than large enterprises Significant difference in small business answers between 2008 and 2014

Tentative conclusions Small business CFOs differ from their large enterprise counterparts on a number of criteria Their roles seem to be evolving in the same manner as in larger enterprises, however traditional roles are emphasized more New knowledge domains are emerging but more emphasis on traditional domains More research is needed on the effects of the contextual factors on the roles and knowledge of small business CFOs