Our research is structured around three overlapping areas

  • Finance
  • Governance and accountability
  • Management Accounting and Information Systems (MAISY)

Below is a summary of illustrative research themes and projects currently being undertaken within each research area.

Finance

Historically, the focus of this research area has been one of theoretically-informed empirical research particularly in asset pricing. However, several high profile recent appointments have enabled the group to consolidate its research strength in other areas of theoretical finance, financial econometrics and corporate finance. Certain areas of research interface closely with the market based accounting research area identified below, in which MAFG has established its own particular identity. Currently, research within the group can broadly be categorised in the following way:

(i) Financial econometrics
We now have an internationally-renowned core group of staff engaged in modelling and forecasting work in volatility, correlation, implied volatility dynamics, and value at risk estimation and risk management. A related strand of research focuses on modelling financial crises using extreme value techniques. The group is particularly strong in non-linear techniques and analysing the interactions between macroeconomic and financial markets. It has several on-going collaborations with the Econometrics group in the Economics department of the School of Social Sciences.

(ii) Derivatives, interest rate and credit risk modelling
This group analyses interest rate derivatives, the development and validation of sovereign and corporate credit risk and credit rating models and the associated derivatives. Manchester's own brand of recombining tree method option valuation, incorporating input from, and strong collaborations with, the Applied Mathematics group in the School of Mathematics is well known. Manchester is also acknowledged for its work in real options, in particular their use in analysing corporate decision-making and project/investment risk appraisal. Current extensions of this work address general option pricing problems in incomplete markets (such as wind power and storage capacity, reinsurance via capital market securitisation). This real options analysis has the potential to interface with MAISY-themed area research on new organisational forms (see below).

(iii) Asset pricing, corporate finance and capital markets
One focus here is on stock market responses to corporate actions (IPOs, rights issues, takeovers and mergers), financial reporting (earnings and firm specific announcements, R&D, disclosure) and the impact of factors on returns (liquidity, volume, momentum). Other empirical research includes tests of option and asset pricing models, models for portfolio management and international investment (equity expectation, styles, home bias, time diversification) and analysing investors' behaviour during financial crisis. We have particular strengths also in methodological issues (eg calculating holding period returns, deflators used in corporate valuation models, appropriateness of techniques which test for market efficiency in foreign exchange markets). Research undertaken from an alternative political economy perspective covers financialisation, the relationship of firms and households to the capital market, and how households can manage risk through purchasing complex financial products.

Faculty members with research interests in the Finance.

Governance and accountability

This group currently focuses on four main areas of research

(i) Market-based accounting research
This covers accounting-based valuation and the content of brokers' reports, accounting conservatism, the use of accounting information by investors, earnings management, financial communication/ disclosure, corporate financial reporting behaviour, management/executive compensation schemes.

(ii) Auditing and accountability
Recent activity in this area has analysed contemporary developments in public and private sector auditing; the changing international nature of audit regulation; post-Enron changes in the status of auditing and developments in audit approaches; multinational accounting firms; outsourcing and its implications for auditing; practical application of business-risk based audit methodologies; governance and accountability effects of audit committees; the development of auditing in non Anglo-Saxon contexts; women and accounting.

 (iii) Business and public policy
Research analyses a range of issues relating to the social, political, economic and strategic behaviour of large corporations, and the appropriate role of the state in influencing both private and public sector economic activity. Much of this work is being developed in conjunction with CRESC, the Centre for Research on Socio Cultural Change, and is also a significant component of a major EU FP6 programme (ESEMK).

(iv) Public sector accounting and accountability
This research covers issues relating to the accounting and accountability of public sector service providers, and the use of private finance to achieve public service objectives, including: international comparative projects on the use of private finance in the public sector, Private Finance Initiative, NHS partnerships, “whole of government accounting” systems in the UK public sector, budgeting and accounting systems in schools. This area has significant potential to interface with MBS-wide research in public sector management.

Much of this area's research is generated through the individual workings of the four research areas, with a number of joint projects between sub-group members. However, there are also a number of research themes that spread across the sub-areas. Indeed, stimulating research of an interdisciplinary nature or which cuts across the sub-areas is one of the prime aims for establishing the theme group. Most notable in terms of integrating themes is that of corporate and economic governance. The area has a central role in developing links with the Institute for Political and Economic Governance (IPEG). Recent corporate scandals such as Enron and WorldCom have helped to stimulate a number of research projects, including work on financialisation, on audit methods, and on the international regulation of the auditing profession. The questions being asked of corporate reporting practices have served to reinforce the pertinence and timeliness of recent projects examining the reporting of financial performance under UK GAAP and assessing, in particular, the scale of earnings' smoothing, the variability of Earnings per Share (EPS) disclosures and the significance of analysts' earning forecasts. There is considerable potential in the area for research with an international focus and appeal, particularly in the areas of financial reporting practices, accounting and auditing regulation, public sector finance and financial management reform and the status of capitalism in a globalised world. 

Faculty members with research interests in the Governance and Accountability.

Management Accounting and Information Systems (MAISY)

The MAISY area has a strong orientation to case study research, social science and organisational theory. It has particular interests in change in accounting practices and in information systems, and in the implementation of new systems, techniques and practices, with an emphasis on the social and behavioural, rather than the technical issues. At the methodological level the members of the group are primarily involved in critical and interpretive research, which aims to understand and explain management accounting and information systems as socially created phenomena. Consequently, members of the group use various types of social theory in their work; both institutional theory and actor network theory are particularly prominent at the present time.

In terms of the group's research focus, current work is concerned with issues relating to the nature of the modern organisation, and in particular the boundaries of the organisation. For example, there is research looking at networks, outsourcing, virtual organisations, B2B E-commerce, and lateral relations and performance measurement more generally. Emerging themes in this research are the role of “trust” in systems of governance in such new organisation arrangements, processes of organisational change and resistance to new systems implementation; the implementation of ERP systems, their impacts and the opportunities they provide for organisation change. Other recent projects have looked at the role of India and other countries in the provision of outsourced, information systems related, services; management accounting in LDCs; cross-cultural information systems development; the development of a cultural political economy of management accounting; global accounting risk; performance measurement in multinational companies;

Finally, at the research methods level, field-based studies are the predominant feature of the research undertaken by members of MAISY. There is considerable experience of such field study research within the group, and much of it is being undertaken within business organisations as well as in public sector and other not-for-profit organisations.

Faculty members with research interests in the Management Accounting and Information Systems.