Management Accounting Data Research Articles

Decision making under uncertainty

Literature on decision-making in management accounting typically assumes certainty (certain expectations); this was also assumed in the previous chapters. There are several reasons for this, particularly the following two: 1. On the one hand, the management accounting system mainly serves as an instrument of information for the support of short-term decisions whose consequences are considered only for a specific period of time (e.g. a month, quarter or year). Here, it can generally be assumed that within such a time frame, forecast uncertainties are negligible, and therefore certain expectations are realistic. 2. On the other hand, management accounting data can explain the fundamental principles that remain valid under uncertainty.

The Impact of Managers’ Personality on Visualization of Management Accounting Data

Management decision making has become increasingly difficult. The visualization of data, i.e. the presentation of data in visual format, can facilitate comprehension and improve decision making. This paper examines transferability of insights from visualization research to the management accounting context and analyzes the impact of personality characteristics on the success of visualizations in management accounting reports. By investigating parameters for successful visualization of data in management accounting reports, we make a contribution to behavioral management accounting research. We generate insights on the differential effect of the manager’s personality on visualization success with an experimental study. Supplementary graphs in management accounting reports have significantly increased decision quality but not affected decision efficiency in terms of speed in a performance evaluation task. Contrary to expectations from visualization research, personality characteristics had no differential impact on visualization success. Hence, the effort of customizing accounting reports entails no significant benefit for management decision making.

Strategic management accounting

Explores the use which is made of strategic management accounting in the hotel sector through case studies at six major UK hotel groups. Uses the definition of strategic management accounting – “the provision and analysis of management accounting data relating to business strategy: particularly the relative levels and trends in real costs and prices, volumes, market share, cash flow and the demands on a firm′s total resources”. The results demonstrate that the accounting function in hotel groups is becoming increasingly involved in strategic management accounting, both in planning and in ad hoc exercises on the market conditions and competitor analysis. The widespread adoption of strategic management accounting is consistent with the open and relatively homogeneous nature of the industry and the high degree of competitiveness among the hotel groups in the market.

Business history and accounting history: a neighbourly relationship

As business history and accounting history have developed as distinct academic disciplines, so potential synergy has grown between them. The range of awareness of accounting historians gains from knowledge of the context within which accounting techniques evolved and were put to use. Business historians, in their turn, have much to gain from applying modern financial accounting concepts retrospectively to surviving quantitative data and much to learn about the dangers of misrepresentation (particularly from published data). A further dimension which needs much more research is the contemporary use of management accounting data and concepts as tools for decision making: the published literature of accounting and legally required published annual accounts are not an accurate guide to the diffusion and use of these techniques.

Operating Decisions and the Disclosure of Management Accounting Information

In this paper, we analyze how the use of management accounting information to make operating decisions can reveal or communicate that information imprecisely when direct (precise) disclosure is a costly alternative. Specifically, we consider how data employed in making a decision to retain or replace a factor of production (e.g., a piece of equipment, a production process, or a manager) are inexactly inferred by outsiders who observe the outcome of the decision process. Such data, used in making production decisions, normally would be generated by the internal accounting system of the firm and considered proprietary. The primary result of the analysis is that we identify conditions under which optimal management decision making is altered by the existence of this potential indirect communication alternative to direct disclosure. In addition, the results suggest that care be taken in empirical tests relating production decisions to management accounting data. Because of the way in which the optimal retention-replacement decision may diverge from the efficient decision (the decision that would be made in the absence of the imprecise inferences made by outsiders), there may not be an unambiguous interpretation of the correct relation between the retention-replacement decision and the cost of direct disclosure. Our work provides an analytically tractable model of the use of man-