Contemporary Management Accounting Practices Research Articles

The Usefulness of Accounting Information and Management Accounting Practices under Environmental Uncertainty

The purpose of this paper is twofold. Firstly, we aim to investigate the relationships among environmental uncertainty, broad-scope and timely management accounting information usefulness, and (traditional and contemporary) management accounting practices (MAPs) usage. Secondly, we intend to explore how these relationships influence decision-makers’ satisfaction with management accounting information. Survey data were obtained through an online questionnaire from 114 large manufacturing companies operating in Portugal. The findings indicate a positive relationship between environmental uncertainty and timely management accounting information usefulness and between (broad-scope and timely) management accounting information usefulness and (traditional and contemporary) MAPs usage. The findings also show that decision-makers’ satisfaction with management accounting information improves when there is a good fit between environmental uncertainty, broad-scope and timely management accounting information usefulness, and MAPs usage. In this way, organisations need to adjust the implementation and usage of MAPs to contextual factors, using both contemporary and traditional MAPs, to achieve greater decision-makers’ satisfaction with management accounting information. Thus, the results achieved in this study are useful for both theory and practice and have several implications for professionals engaged in MAPs implementation and decision-making activities.

The Effect of Traditional and Contemporary Management Accounting Practices on Organisational Outcomes and the Moderating Role of Strategy

This study examines the association between the use of a package of contemporary and a package of traditional management accounting practices with organisational outcomes (organisational performance and competitive advantage), and the moderating role of Miles and Snow’s (1978) strategic typologies on these relationships. Based on the responses from 505 US based financial managers, the Structural Equation Modelling (SEM) results indicate that the extent of use of both contemporary and traditional management accounting practices is positively associated with organisational performance and competitive advantage. Furthermore, the findings indicate that with the exception of the reactor typology, Miles and Snow’s (1978) strategy typologies (i.e., defender, prospector, and analyser) moderate the association between the use of management accounting practices with the organisational outcomes. In particular, the findings indicate that the defender (prospector) strategy positively (negatively) moderates the association between the use of a package of traditional (contemporary) management accounting practices with organisational performance. In addition, the results indicate that the defender (analyser) strategy positively (negatively) moderates the association between the use of a package of contemporary management accounting practices with competitive advantage, while the defender (analyser) strategy negatively (positively) moderates the association between the use of a package of traditional management accounting practices with competitive advantage.

Role of Contemporary Management Accounting Practices in Reducing Customer Uncertainty in Entrepreneurial Startup Firms

Many failures of new ventures are an outcome of the inability of the entrepreneurs to deal with uncertainties. Uncertainties impact almost all different stages of the entrepreneurial process, and the success or failure of firms depends upon how entrepreneurs deal with uncertainties before acting on an opportunity. Uncertainties in early-stage entrepreneurship can include customer, competitor, supplier, technological and resource aspects. An entrepreneurial firm must deliver value along the dimensions that matter most to its customers. Thus, Entrepreneurial firms should focus their scarce resources on the dimensions of value that most matter to customers. Creation of value for customers is a critical task for entrepreneurs, particularly when developing new products and services or starting new businesses. In addition, successful entrepreneurs understand the needs of their customers. Understanding the needs and wants of the targeted customer will help businesses to innovate and grow. On the other hand, Ignoring customer needs and not seeking their feedback can prove to be fatal mistake for most startups. Many changes in the contemporary business environment have caused significant changes in management accounting. One of the most important trends in management accounting is greater focus on customer (customer orientation). Consequently, a hallmark of this era is the introduction of a diverse set of new managerial accounting practices that focus primarily on promoting value for customers. These practices can help in reducing customer uncertainty in entrepreneurial startups. This research focus on how to use current management accounting practices to help in reducing customer- related uncertainty in startup entrepreneurship. In attempting to identify the role of current management accounting practices in reducing customer-related uncertainty in startup entrepreneurship, the researcher will use the constructive approach.

The resistance in management accounting practices towards a neoliberal economy

PurposeThe purpose of this study is to investigate the resistance in management accounting practices (MAPs) in a developing economy in the manufacturing and service sectors in Vietnam.Design/methodology/approachData collection was carried out using survey questionnaires in Vietnamese language. The questionnaires were distributed to selected respondents from the manufacturing and service organisations in Vietnam. Textual structuralism was used to analyse different categories of data, i.e. survey questionnaires, photos and qualitative texts obtained from the literature.FindingsThe findings indicate that the usage of MAPs is more prevalent in the manufacturing sector than in the service sector. In addition, various traditional and contemporary MAPs are being used concurrently in Vietnam, which challenges the classical twofold dichotomy between mere socialism and mere neoliberalism.Research limitations/implicationsThe textual and photographic structuralism is used in this study to analyse primary data (geography and society and time) in a static setting. Hence, it does not analyse the research phenomena in a dynamic equilibrium setting to view the development of the research phenomena over time. Further research could expand data collection to include longitudinal and dynamic settings.Practical implicationsMAPs can be implemented in economic systems ranging from command to capitalist systems. Although most countries in the world follow a mixed economic system, specific MAPs could be designed for a transitional economic system such as that of Vietnam. This affects both theorists and practitioners in Vietnam applying sustainable MAPs to boost a country's competitiveness during transition.Originality/valueThis study expands understanding of the conformity of MAPs in relation to economic systems under the Communist Party of Vietnam (CPV) – the ruling party of the Socialist Republic of Vietnam. Understanding the differences in the way these MAPs are utilised constitutes an essential area of the accounting discipline to advance MAPs in Vietnamese enterprises and progress theoretical development of sustainable MAPs.

Knowledge Management and Contemporary Management Accounting Practices of Malaysian Cooperatives Sector: An Empirical Evidence

Cooperatives in Malaysia are currently operating in a constantly volatile, uncertain, complex and ambiguity situation. The alignment between managers’ plan and organization goals can be achieved through the application of knowledge management and contemporary management accounting practices (MAP). Therefore, the purpose of this paper is to examine the association between knowledge management and contemporary management accounting practices (MAP) in the Malaysian’ co-operative sector. Data were collected through distribution of mail survey to management team from the 100 leading co-operatives in Malaysia. Descriptive on the knowledge management and adoption level of contemporary management accounting practices has been analyzed. The findings indicate the knowledge management in organizational structure level is high and contemporary MAP is also high. The relationship between knowledge management and contemporary MAP among Malaysian Co-operatives is also significant but at moderate level. The findings suggest that knowledge management is an immerse diversity of knowledge and it will not succeed in an organization unless it is supported by top management. Knowledge management plays an important roles through making explicit the link between effective knowledge management and utilization of contemporary management accounting practices.

Contemporary Management Accounting Practices and Managerial Performance Amongst the Malaysian Co-operatives Sector

Co-operatives in Malaysia have urgent jobs in creating business frameworks, and making it workable for the nation to join the worldwide co-operatives society and refined economies. Thus, top management in Malaysian cooperatives aggressively design and implement their strategic plan through strategic accounting procedures in leadership. The purpose of this research is to examine the association between the contemporary management accounting practices (MAP) and managerial performance in the Malaysian’ co-operative sector. Management team from the 100 leading co-operatives in Malaysia were the respondents. Descriptive on the adoption level and its relationship with the managerial performance has been analysed. The finding indicates the level of contemporary MAP is high and there is significant relationship between contemporary MAP and managerial performance among Malaysian Co-operatives. This research offers a exclusive details investigation of the contemporary MAP and an signal of upcoming trends.

The Extent Use of Contemporary Management Accounting Practices and Its Effect on Operational Performance of Industrial Corporations in Jordan

The purpose and aims of this study is to illustrate the extent use of contemporary management accounting practices MAPs in the Jordanian industrial corporations listed on Amman Stock Exchange ASE, and an attempt to find out the most common practice used. A field study conducted by using a questionnaire distributed to accountants working in 25 different industrial corporations, a total of 75 questionnaires distributed, 52 were valid for analysis purposes. The financial data related to the operational performance were collected for the periods 2013-2016. The study used arithmetic mean and standard deviation to describe the study sample and determine degree of implementation of contemporary MAPs.Multiple regression analysis used to detect the effect of MAPs on each indicator of operational performance.Results of the study showed a moderate use of contemporary MAPs, such as Target costing, Kaizen costing and Just-in-time manufacturing, moreover a least used practices were Activity base costing and Balance scorecard, and analysis revealed a different effect of applied contemporary MAPs on operational performance indicators, an effects on inventory turnover rate is observed, and no statistically effect on operational ratio, receivables turnover and total assets turnover. Worthwhile, the researcher proposed a number of proposals and recommendations, emphasis in reconsideration of application mechanism of contemporary MAPs applied in the corporations, and activate the role of various contemporary MAPs used as an information system, which could assess the corporate managers and decision-makers serving the management's objectives in the industrial corporations.

Adoption, Importance and Barriers to the Implementation of Contemporary Management Accounting Practices: Evidence from Egypt

Nowadays, complexity in the business environment, and advanced technology intensified the challenges for more management accounting information to meet global competition. Therefore, contemporary management accounting practices have emerged which focused on financial and non-financial information to support managers’ decision making. The research aimed at examining the adoption, importance and barriers to the implementation of CMAPs. To achieve the research aim a list of forty MAPs, 171 questionnaires and factor analysis were used. In terms of MAPs adoption the results indicated 9 factors :fundamental TMAPs; control; WCM; performance evaluation non-financial; budgeting for planning cash flows ;contemporary decision support; traditional decision support; planning and capital budget practice. In terms of importance there are 10 factors; benchmarking practices; costing and decision support; fundamental TMAPs; traditional performance evaluation; control; contemporary performance evaluation; budget for planning day to day; WCM –MRP practice, product life cycle practice and performance evaluation – customer satisfaction. The main conclusion was the relative adoption of TMAPs are higher than CMAPs however, the Egyptian companies are realizing the importance of large number of CMAPs. Moreover, the research examined barriers that could limit the implementation of CMAPs and revealed that the highest barriers were; it takes longer time to change the societal values and practices, high degree of uncertainty avoidance and high cost to implement these advanced practices respectively.

Explaining management accounting practices and strategy in Thailand

Purpose– The purpose of this paper is to report the level of adoption and benefit obtained from a range of management accounting practices (MAPs) in Thai organizations and analyze to these by reference to various strategic typologies.Design/methodology/approach– Contingency theory, proposing a fit between MAPs and a comprehensive set of strategic typologies is used. Factor analysis, cluster analysis, and Kruskal-Wallis one-way ANOVA is applied to analyze the data and test the hypotheses.Findings– It was observed that firms pursuing differentiation/prospector/entrepreneurial/build strategies significantly report higher benefit from contemporary MAPs. Firms with a cost leadership strategy were, as expected, found to obtain higher benefit from traditional MAPs. Contrary to expectations, entrepreneurial firms reported higher benefit from traditional MAPs than conservative firms.Research limitations/implications– Like all survey work this relies on questionnaire responses of individual organization members. A selection approach was adopted so no direct relationship with organization performance was investigated.Practical implications– Although use of the full range of MAPs is reported there is still reliance on traditional MAPs. Hence further exposure of businesses and practitioners to contemporary techniques is recommended in training, professional development, and interactions with international partners.Originality/value– The paper provides insight into MAPs in Thailand, an emerging economy and one with limited published academic research in management accounting. It incorporates four strategic typologies which previously have been mainly used individually in MA research.

Traditional Vs. Contemporary Management Accounting Practices and its Role and Usage across Business Life Cycle Stages: Evidence from Pakistani Financial Sector

The research examines the management accounting practices and its level of usage in services sector of Pakistan. For this purpose, banking companies, Insurance companies, Telecommunication companies and Computer Service companies were selected. The data was collected through adapted questionnaire regarding management accounting practices and its level of usage. There were 90 target listed services companies from service industry where data has been collected. The unit of analysis was company and the responses were analyzed through descriptive statistics. Findings with regard life cycle stages, there are 69% respondents companies belong from growth stage and 24.4% are located in maturity stage. The results indicate that management accounting practices for instance costing practices; budgeting practices & decision making practices are widely used especially traditional management accounting practices in service sector of Pakistan. While in terms of performance evaluation practices, all the non financial measures related to employees, customers and operation or innovation have lower level of usage in service sector of Pakistan irrespective of the business life cycle stage. Moreover, the results reveal that financial companies which are sub sector of service sector are more sophisticated by utilizing management accounting practices but other services companies do not much utilize management accounting practices from financial sector of Pakistan. These results imply that management accounting practices are more complicated as the companies move from growth to maturity stage. In addition, traditional management accounting practices still have the highest level in financial sector of Pakistan based on its importance & usage.

An empirical study of the influence of intensity of competition on the deployment of contemporary management accounting practices and managerial techniques in Egyptian firms

PurposeThe purpose of this paper is to investigate the impact of managers’ perception of the importance of aspects of competition on levels of deployment of contemporary management accounting practices (CMAPs) and analyzing that impact on levels of implementation of innovative managerial practices (IMP) and advanced manufacturing technologies (AMTs) in use in Egyptian manufacturing firms.Design/methodology/approachA survey of manufacturing firms operating in the three biggest industrial areas in Egypt was carried out in 2005. Data were collected through interviews, using structured questionnaire forms, which were carried out with managers of the surveyed firms.FindingsThe research findings indicate that within the six aspects, quality came first in ranking, followed by customer service and delivery, second and third, then innovation, price and flexibility respectively. Interestingly, respondents rank highly the importance of all aspects of competition included. Findings also show high levels of implementation of CMAPs and IMPs in the surveyed firms, while levels of implementation of CMTs are found to be below average.Originality/valueThe paper adds to the knowledge of contemporary management accounting practices and managerial techniques in Egyptian firms.

The benefits of management accounting practices in manufacturing and service firms: a Finnish study

The paper uses a survey method to explore the extent to which manufacturing and service firms have benefited from a range of traditional and contemporary Management Accounting Practices (MAPs) in Finland. The findings indicate that overall benefits of contemporary MAPs, such as activity-based management and target costing, are higher than the traditional MAPs for both manufacturing and service firms. However, the benefits of traditional MAPs, such as absorption and variable costing, are higher in service firms than in manufacturing firms. The evidence suggests that majority of the firms have benefited from a range of contemporary MAPs that emphasise strategic focused techniques with less emphasis on formal strategic planning. The results of this study also suggest exploring the different combinations of MAPs and not as individual practices.

Contingency Factors of Management Accounting Practices in Thailand: A Selection Approach

This paper aims to investigate the certain types of management accounting practices (MAPs) that are appropriate to the specific characteristics of Thai companies. The study uses survey method to obtain 135 responses from accounting managers of both manufacturing and non-manufacturing industries listed on Stock Exchange of Thailand (SET). Perceived environmental uncertainty (PEU), competitive strategy, and size were found to have impact on MAPs. Firms operating in higher PEU obtain higher benefit from both contemporary and traditional MAPs. In line with expectations, firms pursuing prospector strategies perceive higher benefit from contemporary MAPs than those pursuing defender strategies. No relationship has been found between competitive strategy and traditional MAPs. Larger firms also obtain higher benefit from both contemporary and traditional MAPs than smaller firms. The findings confirm the premise that firms’ characteristics reflected in exogenous, strategy, and endogenous variables have influence on the design of management accounting systems in organizations. In particular, prospector firms and those facing high levels of environmental uncertainty should consider increased use of contemporary MAPs. Academics and practitioners should note the continuing benefit perceived from traditional MAPs, a feature confirmed in many pieces of international research.

The deployment of contemporary management accounting practices in Canadian firms: a contingency approach

Effective management accounting systems can provide critical tools and techniques for managing contemporary companies, particularly in competitive global environments. Using a survey of Canadian manufacturing companies, this study investigates the deployment of contemporary management accounting practices (CMAPs), as well as several contingent factors associated with their deployment, namely: industry size and sector, geographic region, and managers' expertise and skills. The findings suggest that CMAPs play important, but still evolving, roles in Canadian manufacturing companies. In addition, the regions and the industries in which the companies operate, along with managerial expertise and skills in some cases, appear to be significantly associated with the deployment of CMAPs. In particular, the Central and Western regions exhibit significant associations with the deployment of several CMAPs.