PurposeThe aim of this paper is to assess and explain the role of grounded theory (GT) in interpretive management accounting research (IMAR) and seeks to answer the question: can interpretive researchers use GT? And if so, how?Design/methodology/approachThis is a theoretical paper that attempts to investigate how researchers can use GT in relation to their ontological stance, methodological position and research methods.FindingsThe paper suggests that GT offers a balance between the expediency of the research findings, thereby allowing researchers freedom to interpret management accounting practices, and the development of rigorous theory from IMAR.Research limitations/implicationsThe paper provides an analysis of GT from an interpretive perspective and, clearly, there are other research perspectives which could have been discussed.Practical implicationsGT can be a powerful tool that researchers could use to collect and analyse empirical data. However, researchers need to align GT with the broader paradigm they adopt when researching social phenomena. The paper provides some general guidelines for IMARs who want to use GT in their research.Originality/valueThis paper shows that GT can offer interpretive researchers a way of balancing the need to develop theory, which is grounded in everyday practices, and the recognition that the research process is inherently subjective. However, it is argued that in interpretive research GT cannot provide a simple “recipe book” which, if followed rigorously, will result in a high‐quality research (i.e. valid, reliable and unbiased). Nevertheless, the guidelines provide a way for IMARs, who use GT to improve the quality of their research findings.

The purpose of the paper is to determine the impact of the voluntary adoption of the joint external audit approach in reducing earnings management practices through accruals and real operations compared with the adoption of the dual external audit approach. The research follows a quantitative approach to collect and analyze data from companies listed on the Egyptian Stock Exchange during the period 2010-2014. 104 firm-year observations are tested in the sample. The findings of the empirical study shows evidence that there are consistent earnings management practices in the studied sample regardless of the type of audit (joint or dual). There is a negative association between joint audit and discretionary accruals compared to dual audit. This means that firms with joint audit are less engaged in accrual earnings management practices. In addition, large firms that adopt joint audit are less engaged in accrual earnings management. However, there is no effect of joint audit on real earnings management practices compared to dual audit. Our results are consistent for firm size, profitability and leverage. Both firm profitability and leverage show positive association with earnings management practices while size did not have a significant effect on either type of practice. Finally, we find that firms with high (low) profitability that adopt joint audits are less (more) likely to engage in real earnings management practices. Our results are of use to regulators, external auditors and investors.

PurposeThis paper aims to improve understanding of how management control systems (MCS) are influenced by local contexts in outsourcing relationships, drawing on a multi‐layer analysis of embeddedness.Design/methodology/approachData were gathered through a field study of 15 Egyptian firms that outsourced various forms of accounting services to third party suppliers.FindingsThe findings indicate that managers make their control choices based on the nature of their “embedded relationships” with suppliers. The embeddedness analysis demonstrates the influence of context on MCS implementation.Research limitations/implicationsThere is a paucity of studies focussing on how context affects control in outsourcing relationships. The paper provides a detailed framework and a rich empirically‐based explanation of the findings.Practical implicationsThe findings have implications for the practice of accounting outsourcing and provide a conceptual framework of relevance to management practice.Originality/valueA conceptual framework for understanding embeddedness is presented, which is illustrated with empirical evidence from multiple case analyses to illustrate how the implementation of MCS is influenced by context.

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