Uncertainty, Information Practices and Accounting in Small Firms

Erling Emsfors, Leif Holmberg


The question addressed is how small firms compensate for deficiencies in their accounting information systems and what other means they apply to handle uncertainty in their environments. Empirical data was gathered from six small firms representing two different branches of the service industry: craft and culture. A qualitative method was employed and data comes from in depth interviews with the managers and has been structured according to the framework of Simons (1995). Data indicates that most of the studied firms lack significant portions of a formal managing accounting information system. Instead, they rely upon external information, through strategic networks of competitors, customers, employees and branch organizations, to make pricing and development decisions. A practical as well as a theoretical implication is that management control frameworks need to explicitly take into account trust and trustworthiness both in relation to environment and to employees.

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