Internal accounting communication - How do managers frame financial information towards employees?
Abstract
Background and problem: Communicating and using financial information internally is something which all companies do. To be able use financial data employees have to understand it, and it is the corporate managers whose task it is to communicate this to the employees. Previous literature discusses different reasons why employees do not understand financial information. Previous research provides suggestions on how to increase the understandability. One aspect, which is not enough investigated in the previous accounting literature is how managers use framing in their internal accounting communication towards employees.
Purpose: The purpose of this study is to explore how the financial information is communicated within an organization. The purpose is further to see how the communication is framed to address employees.
Research question: How is the communication of financial information framed by managers towards employees?
Research method: To study internal accounting communication we perform a case study of SCA, based on a combination of interviews and document review. Interviews with corporate managers and employees are complemented by internal document review. In such combination, information framing performed by the managers towards employees is observed.
Findings: Different patterns/measures of framing are found in the internal communication of the studied organization. Framing is performed by managers via both written and verbal communication channels. The study reveals that they use verbal channels the most, and written channels mostly as a compliment to the verbal. Additionally, the study reveals that managers not only frame information towards employees, but also employees towards information. They frame employees by holding internal seminars, in which they teach employees how to read and understand accounting numbers that they present.
Implications: This study theoretically contributes with knowledge on how framing can be used by managers towards employees. This study practically contributes by providing examples of how the organization is trying to affect the employee's “frame in thought”, by helping them to interpret the manager's framed messages. This study further contributes by showing that regulations, such as laws, function as a source of both priming and framing when it comes to the communication of accounting information within the organization.
Degree
Master 2-years
Other description
MSc in Accounting
Collections
View/ Open
Date
2017-08-09Author
Kölby Falck, Maja
Ullerfelt, Caroline
Keywords
financial information
accounting communication
framing
Series/Report no.
Master Degree Project
2017:34
Language
eng