Concept Of Management Accounting Research Articles

Indicators as an Instrument of Measurement in Management Accounting in Logistics Enterprises in Poland

Purpose: The purpose of this study was to present the extent to which indicators applied by logistics providers in Poland measure logistics-related processes and performance in the context of implementing the concept of management accounting in the enterprises that were researched.

Analysis of Public Accounting Systems in the European Union

Public accounting is continuously evolving and accrual accounting gains importance in governments. As a part of the New Public Management, this concept applies the practices used in the private sector to the public sector. The application of new accounting methods improves financial management and decision making. The European Union, through its Directive 2011/85/EU of November 8, 2011, is really sensitive to the use of reliable and transparent accounting data and accrual accounting could be a very interesting tool to provide quality data.So, the aim of this paper is to analyze the accounting systems used in the European Union Member States. After a review of the literature including concepts of New Public Management and accrual accounting, we classify, on the basis of a survey carried out in the European Union Member States, the States according to the accounting system they use at the central level and at the local level. This system can be cash basis accounting, modified cash basis accounting, accrual accounting or modified accrual accounting. We conclude that there are important disparities between the Member States and also within the country from a government level to another. However, we can see that accrual accounting is dominant in the European Union Member States.

Accounting for KVA Under IFRS 13

We explore the accounting view on KVA for derivatives, where KVA is defined as the lifetime cost of capital, i.e. the Capital Valuation Adjustment. Accounting uses ‘fair value’ in most circumstances. IFRS 13 (Fair Value Measurement) defines fair value and it explicitly replaces previous requirements in individual standards. This fair value is based on financial management and management accounting models and concepts. These concepts are embodied in economic decision making models that use discounting, relevant cash flows, and any incremental changes consequent upon the project or investment. These economic decision making models naturally include the cost of allocating scarce capital that cannot then be used elsewhere. In short, IFRS 13 specifically requires preparers of accounts to use economic models. In this case the project or investment is the derivative, and regulations (e.g. Basel III) set minimum capital requirements. Thus by IFRS 13 accounts should reflect the costs of allocated capital, i.e. KVA.

Fifty Years of Sustainability Accounting: Does Accounting for Income in Business Sustainability Really Exist?

The major challenges faced in the area of accounting for sustainability are the complexity and uncertainty of the subject matter, specially the lack of a clearly understood definition of sustainable development (SD). Further, the aspect of economic or income sustainability is one of the important measures of SD that can be achieved through the implementation of the concept of environmental management accounting (EMA). However, by taking an overview through the literature of accounting for business sustainability, the outcome of this paper indicates that the majority of literature on the financial or economic aspects of business sustainability focuses on the cost side and how to measure it either in monetary units or in non-monetary units while totally neglecting the revenue side either for business, environment, or society.

MANAGEMENT ACCOUNTING RESPONSIBILITY AND FIRM VALUE

ABSTRACT In the modern world of business, management accounting constantly faces ethical dilemmas and globalization is affecting management accounting concepts, techniques and practices. Therefore, an organization needs to adopt a more realistic approach and have responsibility in management accounting. This paper is to integrate the concept of management accounting practices and responsibility for which the objective is to suggest and discuss a conceptual model of management accounting responsibility. Moreover, this paper also has the objective to suggest the relationship between management accounting responsibility and firm value. Management accounting responsibility consists of six dimensions: cost management concern, budgetary preparation trustworthiness, performance evaluation transparency, environmental management accountability, quality control concentration, and strategy linkage obligation. The consequences of management accounting responsibility consist of information reliability, corporate reputation, stakeholder credibility, and business competitiveness. The stewardship theory was used to develop the conceptual model of management accounting responsibility and firm value. Theoretical, managerial contributions and future direction for research are presented. The conclusion is discussed in the last section. Keywords Management Accounting Responsibility, Cost Management Concern, Budgetary Preparation Trustworthiness, Performance Evaluation Transparency, Environmental Management Accountability, Quality Control Concentration, Strategy Linkage Obligation, Information Reliability, Corporate Reputation, Stakeholder Credibility, Business Competitiveness, Firm Value

Управленческий учет земель сельскохозяйственного назначения и внутренняя отчетность об их использовании

The article discusses the concept of management accounting as a system, that provides information on agricultural lands and the effectiveness of their usage of different users groups. An approach to management accounting organization of agricultural land, based on processes, is outlined. The authors shows a universal model of the internal management reporting on agricultural lands. The key indicators of the form must be: the quantity and evaluation of lands for agricultural purposes, owned by organization; the quantity and evaluation of leased land with the right of redemption, including the beginning of the period, at the end of the period, partially redeemed; the quantity and evaluation of land, received in rent up to 5 years; the quantity and evaluation of agricultural land by type, depending on the appointment of the target and use; the costs by type of land and its relationship to the main business processes; the performance indicators of individual types of lands; the refractive efficiency of land usage. Thus, an internal reporting is the main source of information for management decision-making on evaluation and optimization of the structural units, business processes and other segments of the agricultural organization.

Alignment of performance measurement to sustainability objectives: A variance-based framework

Meaningful incorporation of environmental and social responsibility goals into organizational strategic plans requires a mechanism to measure and reward performance contributing to that objective. This paper formulates such a framework using management accounting concepts. We demonstrate that the benefits of pursuing sustainability objectives can be decomposed into three parts. The first consists of what might be considered a natural outcome of pursuing the traditional economic goal of efficiency through cost-minimization (a “waste” variance). The second part consists of sustainability gains that produce societal benefit but may be incongruent with short-term economic goals (a “sustainability” variance). The third part stems from a change in optimal output level when that is considered endogenous to the firm (a “volume” variance). While elimination of waste variances can be encouraged using a traditional performance evaluation and reward structure, elimination of sustainability and volume variances requires redesign of performance evaluation tools and reward structures. We demonstrate that failure to recognize and incorporate the difference between the three variances can lead to inefficient allocation of resources, over- or under-production, and only partial fulfillment of environmental goals. Further, availability of shadow price information is essential to implementing such a performance measurement system; thus it is a public policy imperative to develop markets that establish such prices.

Causal Implications of Performance Management for Strategic Control

In contrast to conventional concepts of management accounting, which are limited to measuring the value realization of firms, the research field of performance measurement and management explicitly focuses on the managerial process of creating value. This process should be analyzed and subse-quently reconstructed in the form of cause-and-effect relationships. Such relationships consist of causes, effects and causal attributions. In management science cause-and-effect-relationships can not be detected and identified as “ontological truth”. They can only be reconstructed on the basis of individual knowledge and individual decisions on the explanation power of available statistical data. Causal enlargement of the value creation task - as induced by the concept of performance measurement and management - affects the function of strategic control. Its causal reinterpretation requires generating causal information and reconstructing cause-effect relationships underlying the strategic management process. The adequacy of these relationships should be systematically reflected within the framework of a meta-control, which is developed as a subfunction of strategic control in the following. Meta-control can protect strategic management against control deficits of the classical single loop and double loop learning. By implementing a meta-control, possible misinterpretations of the causal relevance of events and circumstances, e.g. based on logical implications or spurious correlations, can be reduced. With such a support the efficiency and effectiveness of performance measurement and management can be ensured.

Institutional drivers of conformity – Evidence for management accounting from Brazil and Germany

This paper contributes to the discussion of international convergence in management accounting, which has included only limited empirical data. Building on institutional theory, we have analysed cross-sectional field study data from a unique set of manufacturing companies in Brazil and Germany. Our data suggest that management accounting structures and practices in both countries are converging towards international standards under the pressure of coercive, mimetic and normative isomorphism. Although firms generally tend to adopt Anglo-American practices, we also find that German management accounting concepts have a strong influence in Brazil. In addition to elaborating on the imitation of international best practices and standardised information systems, we show the pressures created by the adoption of the International Financial Reporting Standards and the pursuit of legitimacy via adherence to social expectations.

Strategic Management Accounting Practices in a Competitive Environment: A Theoretical Exposition

This paper examines a theoretical exposition of strategic management accounting practices in a competitive environment with a view to determining its relevance in achieving competitive advantage. To achieve this objective, a critical review of extant literature on the concept of strategic management accounting, forms of strategic management accounting and the role of strategic management accounting in developing competitive strategies, was made. It was revealed from our analysis that the strategic management accounting is superior to the traditional management accounting in the provision of information that meet environmental demands, particularly in the area of competition. It was therefore concluded that corporate executives should take advantage of the strategic management accounting as an information system if they must gain competitive edge over their rivalries.

Strategic management accounting and the strategising mindset in an English higher education institutional context

PurposeThe purpose of this paper is to explore the concept of strategic management accounting (SMA) in an English university. It is in search of and investigates SMA practices and processes, and their meaning to participants in an English university context. The higher education (HE) institution under research had gone through a major change a couple of years prior to this study, including implementation of new strategic management and management accounting practices.Design/methodology/approachThe approach taken is an interpretive one and the adopted methodology is grounded theory according to Glaser's evolved approach. Data collection took place largely through interviews and, where possible, participant observation.FindingsThe main findings of the research concern the core concept of the strategising mindset, which encapsulates the institutional, divisional and individual stance towards strategy and SMA. The strategising mindset is understood as the belief system that is adopted with regard to SMA, which is divided into a bureaucratic and an entrepreneurial mindset. According to the respective mindset, accounting for strategic management is dealt with and institutional members' perceptions of SMA are shaped. The particular mindset adopted depends on the context members were and are functioning, which reflects Bourdieu's theory of practice.Originality/valueThe main contributions are the emergent theoretical framework on SMA in HE, the concept of the strategising mindset and resulting views and conclusions on what SMA actually means in practice. To the authors' knowledge, no such theoretical framework has been published to date.

A Call For Research: The Need For Development Of Management Accounting Concepts For Professional Service Firms

The results of a survey of recent managerial and cost accounting textbooks suggest that professional service firms have been largely ignored in cost and managerial accounting courses. With the purpose of identifying possible areas for research, this paper presents several managerial accounting concepts that are typically approached form a manufacturing orientation which could as easily be presented from a service viewpoint.

Accounting System and Financial Performance Measurements

The paper concerns measuring and reporting of financial performance of an enterprise. Currently increasing emphasis is placed on performance measurement and management. Within performance measurement and management in general the role of financial performance is becoming increasingly important. The paper is concerned with measuring and reporting of financial performance of an enterprise primarily from manager's point of view. In its first part it deals primarily with the connection between the performance of an enterprise in general and financial performance. In subsequent part it is about the relation of performance management and management accounting. The next part of the paper is devoted to the dual concept of financial and management accounting and to causes and consequences of the duality. Then it summarizes the most important developmental tendencies of financial performance measurement and management accounting.

Robert N. Anthony: A Pioneering Thinker in Management Accounting

B y any measure, Robert Newton Anthony (1916–2006) was a giant among 20th century academic accountants. After obtaining a Bachelor’s degree from Colby College, he matriculated to the Harvard Business School (HBS), where he earned his M.B.A. and D.B.A. degrees. Bob spent his entire academic career at HBS, retiring in 1983. He is best known as a prolific writer of articles, textbooks, and research reports. He was inducted as a member of the Accounting Hall of Fame (1986), was a recipient of the American Accounting Association’s (AAA) Outstanding Accounting Educator Award (1989), and then was the second recipient of the AAA Management Accounting Section’s Lifetime Contribution to Management Accounting Award (2003), as well as serving as President of the American Accounting Association (1973–1974). In addition, he was elected a Fellow of the Academy of Management (1970). These honors indicate that he was, indeed, a significant contributor to the development of his chosen field of management accounting for over 50 years, and highly respected by his peers. They do not indicate why. My intention is to answer that question. Bob Anthony was the ideal person to be a leader in the post-World War II movement that changed cost accounting into management accounting. He possessed broad interests and not only was an academic, but also was interested in solving problems found in the real world. He was equally comfortable working as an academic and as a manager. He served as Under Secretary (Comptroller) in the Department of Defense for his old friend and fellow Harvard Business School graduate, Robert S. McNamara, from 1965 to 1968. While at the Department, Anthony earned the Defense Department Award for Public Service for developing a system of cost management and control for the Department (Harvard University Gazette 2006). Though many identify him with the diverse set of textbooks he authored or co-authored, he also undertook what we now would identify as field research, e.g., Anthony (1952). His interest in studying accounting and management in a real-world setting informed his views on what

Caribbean Brewers: Management Control, Governance and Ethics

Caribbean Brewers is a fictitious company although the case depicts a real international business situation focusing on corporate governance, performance measurement, management control and ethics. It exposes students to the role of management accounting concepts such as cost allocation and transfer pricing in terms of how they impact the performance and reward of individuals at different levels within the organization. Students are also exposed to impact of the management accounting and control tools/methods used upon stakeholder interests. The case puts the new comptroller in a difficult position with respect to discharging his or her professional and ethical responsibilities when the interests of the different stakeholders are at odds with one another (e.g., majority and minority shareholders, individual managers and tax authorities). It contains a good balance of quantitative and qualitative analyses, and forces students to delve into the issues in some depth. The ethical issue forces students to think hard about how they would react when facing similar situations. The case offers considerable flexibility to the instructor to emphasize different aspects contained within depending upon the specific course and the level at which it is being used; it can also work well as an integrative case. The case is most suitable for use in advanced undergraduate management accounting courses as well as graduate level courses including those in MBA program. It has been successfully used as a discussion case in a MBA capstone course; the positive student feedback, with mean ratings on four questions ranging from 7.3 to 8.0 on a ten-point scale, suggests that the case fulfilled its learning objectives.

Accounting for Business Sustainability: An Overview

One of the major challenges faced in the area of accounting for sustainability is the complexity and uncertainty of the subject matter, beginning with the lack of a clearly understood definition of sustainable development (SD) (Herath & Gamini, 2005). In most of the literature, SD is defined as integrating the economic, social and environmental objectives of society, in order to maximize human well-being in the present without compromising the ability of future generations to meet their needs (Organization for Economic Cooperation and Development (OECD), 2001, p.11; Pyle & Forrant, 2002, p.3).From the perspective of quality of human life, three dimensions could be considered: economic, ecological, and social (human). From this perspective, the economic criteria could focus on the maintenance of a constant stream of income. This aspect of economic or income sustainability is one of the important measures of SD that can be achieved through the implementation of the concept of environmental management accounting (EMA), however, as argued in this paper, it is still ignored. By taking an overview through the literature of accounting for business sustainability, the outcome of this paper indicates that the majority of literature on the financial or economic aspects of business sustainability focuses on the cost side and how to measure it either in monetary units or in non-monetary units while totally neglecting the revenue side either for business, environment, or society.

Institutional Drivers of Conformity - Evidence for Management Accounting from Brazil and Germany

This paper contributes to the discussion of international convergence in management accounting, which has included only limited empirical data. Building on institutional theory, we have analysed cross-sectional field study data from a unique set of manufacturing companies in Brazil and Germany. Our data suggest that management accounting structures and practices in both countries are converging towards international standards under the pressure of coercive, mimetic and normative isomorphism. Although firms generally tend to adopt Anglo-American practices, we also find that German management accounting concepts have a strong influence in Brazil. In addition to elaborating on the imitation of international best practices and standardised information systems, we show the pressures created by the adoption of the International Financial Reporting Standards and the pursuit of legitimacy via adherence to social expectations. (This abstract was borrowed from another version of this item.)

Managing the CPA Firm at Dodge Company: “Shoeing the Cobbler’s Children”

ABSTRACT: This teaching case, based on the activities of an actual local CPA firm, explores the application of management accounting principles to the management of a CPA firm. Management principles explored include: basic cost accounting; managerial discretion when classifying variable versus fixed costs, and direct versus indirect costs; the use of regression analysis to further explore classification of variable versus fixed costs; and cost-volume-profit analysis. In this case, students have the opportunity to explore the use of management accounting concepts and tools in a service industry context. Additional materials are made available to the instructor to extend the cost analysis to explore operational budgeting and variance analysis using extensive spreadsheet assignments.

Managerial discourse and the link between theory and practice: From ROI to value-based management

Building on Thrift's (2005) concept of the cultural circuit of capitalism using critical discourse analysis, the paper investigates the influence of management accounting concepts on practice. The paper proposes that the way that academic theories in management accounting affect practice depends on the origin of the early texts, the extent to which the texts become discourses and the relative institutional support for the discourse. The approach is illustrated by focusing on three particular management accounting concepts: return on investment (ROI), value-based management (VBM) and strategic management accounting (SMA) and empirically contextualised through the case history of GEC/Marconi. The paper explains that, whilst ROI and VBM have, to varying degrees, become part of managerial discourse, SMA has remained a loose collection of academic texts and has had a negligible impact on managerial discourse and practice.

Organizational Founding, Strategic Renewal, and the Role of Accounting: Management Accounting Concepts in the Formation of the “Penny Post”

ABSTRACT: Organizational strategies, processes, and procedures may become institutionalized during the early history of an organization, leading to dysfunctional rigidities when the environment changes. The postal system worldwide is under significant pressure to change its business model, including rescinding the provision of universal service and uniform pricing, as the posts are privatized and opened to competition. Cost accounting has become a key mechanism to achieve reform in the postal system. But is the introduction of a cost-based logic new to the design of post office reforms? Were the core policies of the post office originally developed without reference to cost? This paper analyzes the key document in the creation of the current postal business model: Rowland Hill's (1837) “Post Office Reform: Its Importance and Practicability.” The pamphlet shows a basic understanding of economic concepts including the elasticity of demand and opportunity costs as well as implementing practical accounting techniques that we now call value chain analysis, cost behavior analysis, activity-based costing and activity-based management, and target costing. This paper provides an analysis of Hill's logic from the perspective of current management accounting techniques and terminology. It illustrates the use of management accounting in the reformation of social institutions and provides a rare example of the early decision-making use of management accounting concepts.