The Impact of Environmental Uncertainty on Accounting Information Relevance and Performance: A Contingency Approach

Rui Pires and Maria-Ceu G. Alves ()
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Rui Pires: Departamento de Ciências Empresariais e Jurídicas, Instituto Politécnico de Bragança, 5300-253 Bragança, Portugal
Maria-Ceu G. Alves: NECE-UBI Research Unit in Business Sciences, University of Beira Interior, 6201-001 Covilhã, Portugal

Economies, 2022, vol. 10, issue 9, 1-15

Abstract: This paper examines the association between environmental uncertainty, accounting information relevance, and organizational performance. From a contingency approach, this paper attempts to contribute to a stream of research that investigates the relationship between accounting information relevance and organizational performance. The presence of environmental uncertainty in this relationship has not been fully established. This paper contributes to this area by suggesting a framework to study and explain this connection. An online questionnaire-based survey was conducted, which produced 119 valid responses (a response rate of 23%) from large manufacturing companies operating in Portugal. The results suggest that in contexts of environmental uncertainty, the relevance of non-financial information increases. However, the relevance of financial information continues to outstrip that of non-financial information. The results also suggest that financial information and non-financial information are complementary, and not substitutes, and can be used simultaneously in different situations. These results have several implications for professionals involved in decision-making activities. It offers findings which are potentially useful for both theory and practice. The study addresses an identified gap in the literature and adds to the existing body of work analyzing the association between environmental uncertainty, accounting information relevance for decision-making purposes, and organizational performance.

Keywords: environmental uncertainty; financial information; non-financial information; organizational performance; contingency theory; survey; Portugal (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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