The Effect of Management Control Systems in Managing the Unknown : Does the Market Appreciate the Breadth of Vision?

We examine the extent to which broad-scope management control systems (MCS) mitigate the negative impact of COVID-19 on investor and shareholder expectations under the assumption that managers use this accounting information to increase their breadth of vision in managerial decision-making. Our hypothesis is tested using a combination of survey and archival data from large organizations listed on the Brazilian Stock Exchange, leading to a panel of 6,257 organization-week observations. Results are consistent with our hypothesis. We extend the scarce prior literature on the effectiveness of MCS under crisis management and also provide new evidence for signaling theory