Management Accounting Reports Research Articles

Exploring the 2023 Reformation of Financial Systems in Higher Education Institutions and Examining the Practical Aspects of its Execution

As China’s economy has experienced rapid growth, the economic landscape for higher education institutions’ financial systems has become increasingly intricate. Consequently, there has been a heightened demand for enhanced financial management in these institutions. Notably, in 2012, the country’s Ministry of Finance and Ministry of Education introduced a new financial system for higher education institutions, and in 2022, the Ministry of Finance publicly revised this system to further standardize financial practices within higher education institutions, align with financial management requirements, and foster the development of these institutions. This paper offers an extensive examination of the updated financial system for higher education institutions compared to the previous version, delving into aspects such as the financial management framework, professionalization criteria for financial directors, enhancements in managing the proceeds from technology and research achievements, and the incorporation of management accounting reports. Additionally, it provides a comprehensive analysis of the challenges faced by financial management in higher education institutions and outlines strategies for addressing these issues.

How management accounting practices integrate with big data analytics and its impact on corporate sustainability

PurposeThis study aims to investigate the relationships between big data analytics, management accounting practices and corporate sustainability and, more precisely, the impact of the integration between big data analytics and management accounting on corporate sustainability performance development.Design/methodology/approachA qualitative case study approach is used in this study with multiple collecting data tools as in-depth interviews and observations, in addition to the content analysis used of the annual reports for the year 2021, of Almarai manufacturing corporate (one of the leaders of food and beverage manufacturing corporates in Saudi Arabia and other countries).FindingsResearch findings provide good insights about the significant impact of the effective integration between big data analytics and management accounting on corporate sustainability performance development, big data can assist management accounting to form corporate value-added strategies and activities.Research limitations/implicationsThe study is limitedly applied to one manufacturing corporate as a study case; therefore, the findings cannot be generalized. Thus, future research can examine the association between the current study variables with wide-scale applications and with different approaches and in different contexts to enrich the findings. Moreover, future research may focus on the integration between big data analytics and management accounting reports in the meta-verse environment to explore the benefits that corporates could gain from the features and capabilities of meta-verse technology.Originality/valueThere is a research gap regarding the impact of the integration between big data analytics and management accounting practices on corporate sustainability development, as most of the previous studies focused on two variables only of the current study variables; therefore, this study tries to investigate and give important insights about it.

Business intelligence impact on management accounting development given the role of mediation decision type and environment

Business Intelligence (BI) seeks to increase the profitability of the organization by making intelligent and accurate decisions. Management accounting (MA) reports are the score-card of an operation manager's efficiency. The operational; tactical, and strategic decision types make the road to achieving the goals of a company. Further, Environmental factors may affect the supply chain or increase the costs of materials. This study aims to investigate the impact of the BI on the development of MA in industrial companies. Samples are 200 Managers of these companies. The researcher-made questionnaire was employed to collect the required data. Factor analysis by reliability and item content technique verified by 0.896 Cronbach's alpha. Results revealed that the impact of BI on the development of MA is meaningful. For the β-values, the highest and the lowest effect of variables on success of BI is for decision type and flexibility variables, respectively. However, For the t-values, it is for data quality and integration with other systems (IOS) variables, respectively. Managers in industrial companies, should pay attention to decision type and data quality more than flexibility and IOS.

The Effect of Discontinuous and Unpredictable Environmental Change on Management Accounting During Organizational Crisis: A Field Study*

ABSTRACTThis study investigates whether and how organizations change their use of management accounting during crisis. The study is important because organizations regularly face significant challenges such as crisis during which the role of management accounting is not well understood. Based on interviews and observation in five private sector organizations and one in the public sector, I find that executives in organizations facing crisis due to a discontinuous and unpredictable environmental change leverage management accounting during the crisis. In contrast, executives in organizations facing crisis due to a continuous and predictable environmental change question the truth and value of their management accounting practices and, as a result, do not change their use of management accounting to manage the crisis. For those organizations that do leverage management accounting, I rely on conceptual and empirical insights from the literature examining the decision‐facilitating role of informal management accounting to examine how they adapt or develop new management accounting tools and practices to manage crisis. I find that executives first engage in a comprehensive review of their management accounting systems and reports to convince themselves that they can be relied on. Following this process, they leverage accounting to understand the past, develop metrics intended to reach all employees, and institute various forms of accountability to support the management of crisis. The use of these informal management accounting tools and practices enables organizations to develop a new language for understanding and managing crisis. The primary contribution of my study is that it conceptualizes and theorizes informal management accounting tools and practices as a mechanism that facilitates response to crisis. These tools and practices are low‐cost and easy to implement, which are favorable given the challenges associated with crisis.

How to de-bias investment judgements–unpacking bias and possible remedies in a capital investment context

PurposeResearch on biases in investment decision-making is indubitably important; however, studies in this context are relatively scarce. Unpacking bias has received attention in the psychological literature yet very little attention from management accounting research. This bias suggests that the perceived probability that an event will occur generally increases when the event's description is unpacked into a disjunction of subevents. The authors hypothesize that for a capital investment decision context, managers' judgement of the probability of a future event depends on whether the event is described as one packed event or is unpacked into several disjoint subevents. Additionally, the authors propose that altering the format of the description of an event's occurrence from percentage values to relative frequencies reduces unpacking bias.Design/methodology/approachTo test the study’s hypotheses, the authors conducted two experiments based on a 3 × 2 mixed experimental design in which manager participants were asked to estimate the failure probabilities of technical systems in the context of an investment decision.FindingsThe authors provide evidence that unpacking bias occurs in an investment scenario, which can be characterized as a high-stakes decision context. Changing the format in which probabilities are presented from percentage values to relative frequencies significantly reduces the bias.Research limitations/implicationsAdditional instructions did not further reduce unpacking bias.Practical implicationsFor investment decisions under uncertainty, performance indicators in management templates should be presented in relative frequencies to improve managerial decision-making. The fact that the authors could not show an additional effect of instructions in management accounting reports indicates that it is challenging for management accountants to reduce the biased decision-making of managers by “teaching” them through the provision of instructions.Originality/valueThe authors contribute to accounting research by illustrating unpacking bias and by deriving a debiasing mechanism in a capital investment decision context.

Reporting practices in situations of conflicting institutional logics: the case of a German federal authority

PurposeThis study aims to understand how reporting practices act as drivers of change in situations of conflicting institutional logics in a public sector organisation.Design/methodology/approachThe findings are based on a case study of a German federal authority, where management accounting reports were introduced as part of a “new” managerial logic of control.FindingsIn the case organisation, management accounting reports were intended to change the behaviour of executives but were still guided by an “old” logic of justification. Nevertheless, over time, the addressees of the reports used the reports and reconciled different logics. This documents a process from decoupling to compromising and, finally, reconciling different institutional logics.Originality/valueBy examining the practices of management accounting reporting, this study elaborates the tensions placed on individuals by conflicting institutional logics and provides insights into how organisational practices are used to handle and reconcile conflicting logics in a public sector organisation. Therefore, this paper contributes to the discussion on how organisational practices act as drivers of organisational change.

The effect of readability and language choice in management accounting reports on risk-taking: an experimental study

Concisely written financial documents facilitate information processing and help to improve decision-making. However, the role of readability seems to be still neglected in accounting practice. Readability concerns become even more relevant in the light of the fact that English is commonly used as the corporate language in multinational corporations throughout the world. Management reports prepared in a foreign language may be less readable than reports written in the preparer’s mother tongue. With this study we set out to experimentally investigate the effects of report readability and choosing either managers’ mother tongue or a foreign language as the reporting language on risk-taking in a management accounting context. We were able to show that a low level of readability significantly reduces the willingness to accept beneficial risks, a phenomenon which can be explained by the cognitive load effect. In line with the foreign language effect, we provide tentative evidence that the use of a foreign language in combination with a high readability level enhances the willingness to undertake beneficial risks. Further investigation revealed that the foreign language effect is present only for a medium–high language proficiency level and can be best explained by the reduced emotionality account.

Management Accounting Practices Among Chinese Enterprises

This study examines the management accounting reporting practices based on the management accounting guidelines among the enterprises in China. Using questionnaire survey on the enterprises in China in the province of Xian, the results show that the level of management accounting reporting practices among the Chinese enterprises is still low and not in accordance with the requirements of the application guidelines. The results also show that half of the enterprises failed to comply with the requirements of the guidelines, an indication that in the process of practice, there are inconsistencies between theoretical understanding and practical practice. However, most enterprises have a positive attitude towards the preparation of management accounting reports and agreed with the importance and significance of the preparation of reports mentioned in the practices guidelines. In addition, this study also shows that the enterprises that prepared the management accounting report adhere to the requirements of the guidelines. Specifically, the number of enterprises preparing operation management accounting reports is the largest, while the number of enterprises preparing strategic reports is the smallest. The findings in this study implicate that enterprises that have not prepared the management accounting report should pay more attention to management accounting reporting. This study sheds some lights to the policy makers on the level of management accounting reporting practices and instils awareness to enterprises on the importance of preparing such reports by giving guidance and assistance after issuance of guidelines.

Generic Strategy and Strategic Management Accounting Practices: Case Study of a Sri Lankan Telecommunications Company

Organizations depend on different generic strategies to gain competitive advantage (Porter, 1980). Usage of a particular generic strategy is always associated with a set of rules, practices, and procedures within an organization. Amongst them, Strategic Management Accounting (SMA) practices play a vital role in supporting and monitoring the performance of the generic strategy pursued by an organization.However, organizations may change the generic strategies they use over the time due to various changes taking place in the environment including the changes in business environment,technology, competitors, regulation and the global economy (Wickramasinghe & Alawattage, 2007).A change in the strategy is expected to lead to changes in existing policies and practices to match the new strategy (Langfield – Smith, 2007).Thus SMA practices used by the organization should be no exception. Such changes in practices are important for effective implementation of the new strategy. Otherwise, the new strategy is expected to fail. However, studies, which examine the changes in generic strategy and associated changes in SMA practices are scarce in the Sri Lankan context. Hence, the purpose of this paper is to examine whether the change in generic strategy leads to changes in SMA practices used in Alpha Telecom PLC, which is a leading telecommunications company in Sri Lanka. Also, the study expects to recognize other factors contributing to the changes in SMA practices in this company.This study adopted the qualitative research methodology and used the single case study method to conduct an in depth analysis of SMA practices of Alpha Telecom. The data were collected through semi- structured interviews with senior managers and a questionnaire was distributed among middle level executives. Management Accounting (MA) reports and annual reports of the company were used as secondary sources. The study has used new institutional theory as the theoretical lens. The study found that when generic strategy moved from cost leadership to differentiation, the traditional MA practices based on costing shifted to SMA practices such as Balanced scorecard (BSC), Competitor analysis, Quality costing etc. Further, it was found that changes in ownership, culture of parent company, and nature of competition also had an impact towards the usage of new SMA practices within the company. Coercive and mimetic pressures affected for the usage of SMA at Alpha PLC.

Analysis of problems of accounting reliability provision in clusters

The object of research is theoretical and practical aspects of the formation of management reporting and the problematic issues of preventing accounting distortions in clusters. The question of assessing the quality of accounting information in particular, the nature and place of accounting information in cluster management, accounting in the management information system of enterprises participating in the cluster, accounting and reporting tools are not sufficiently developed. The order of formation of accounting information and the preparation of management accounting reports in clusters are investigated, and the specifics of the quality of accounting information and the effectiveness of the accounting system are determined. In the process of research methods of generalization, systematization, and system analysis were used. Using these methods, the definition of the concepts «intracorporate management reporting», «unreasonable classification of expenses», and «accounting information» has been proposed. Also the main problems hampering the need to implement and automate a full-fledged management accounting system are grouped that would meet all the challenges and needs of modern business and suggested ways to solve them. Special attention is paid to the formation of information support for solving specific management problems. Despite some progress in the development (in particular, the basic principles of standardization) of accounting and reporting, there are serious problems regarding the adequacy of the methodological foundations of accounting for the current state of the market environment and the needs of users. Accounting systems do not fully ensure the proper quality and reliability of the information they form, which significantly limits the usefulness of this information. In the work, reliable financial statements are analyzed as an important tool for making sound and important management decisions in clusters. The research results will be useful when conducting an audit, including when planning an audit, as the accountant and the head of the company need to take into account the possible presence of distortions in the financial statements. And, on this basis, assess the risk of misstatement of financial statements and take measures to prevent such violations in the future.

The Effect of Discontinuous and Unpredictable Environmental Change on the Use of Management Accounting during Organizational Decline: A Field Study

This paper investigates whether and how organizations use management accounting during decline. Based on interviews and observation in five private sector organizations and one in the public sector, I employ a theoretical lens distinguishing the continuity and predictability of environmental change. I find that members in organizations facing decline due to a discontinuous and unpredictable environmental change leverage management accounting during decline. In contrast, members in organizations facing decline due to a continuous and predictable environmental change question the truth and value of their management accounting practices and, as a result, do not change their use of management accounting to manage decline. For those organizations that do leverage management accounting to manage decline, I employ a theoretical lens based on theory and research relating to the process of organizational learning. I find that organizational members first engage in a comprehensive review of their management accounting systems and reports to convince themselves that they can be relied upon. Following this process, they use accounting to understand the past, develop metrics intended to reach all employees, and institute various forms of accountability to support the management of decline. These uses of management accounting align with the information processing, interpretation, and dissemination activities of organizational learning, which enables organizations to find a new language for understanding and managing decline. My findings contribute to research and practice.

Visualisation of data in management accounting reports

Purpose– Managers are confronted with increasing information overload and growing pressure for effective and efficient decision making. The visualisation of data represents a way to overcome this dilemma and to improve management decision quality. The purpose of this paper is to transfer insights from visualisation research to the managerial accounting context and clarify the impact of visualisation on management accounting reports and decision making. The authors deduce implications for behavioural management accounting research, teaching, and business practice from previous findings and the results.Design/methodology/approach– The authors conducted an experiment with students and experienced managers. Participants had to evaluate eight different business units based on four accounts (sales, EBIT, FPY, and delivery reliability). The information the authors provided to the participants was either presented as tables only, or in tables and graphs.Findings– The empirical results show that supplementary graphs improve decision quality, especially within the manager sample but do not affect decision confidence in a performance evaluation task. The authors furthermore find that managers perform poorly when only provided with tables, and they achieve the overall best score when provided with both tables and graphs, whereas students perform similarly in both conditions. The authors additionally show that proficiency affects not only decision quality but also decision confidence.Research limitations/implications– The results differ from predictions based solely on the cognitive fit model, as the authors found differences in decision quality to be stronger within the group of managers. The cognitive fit model proposes that decision making performance will improve when the problem representation and the decision making task match. Applying the model to a management context, it is obviously insufficient to explain the differences the authors obtained in the experiment. The authors observed that proficiency plays a role in such performance evaluation tasks.Practical implications– Based on the results, management accountants should analyse the task that needs to be solved with the reported data. By analysing the type of task, accountants can derive the information processing strategy that will most likely be used by executives for problem solving and determine the suitable visualisation format based on the cognitive fit model. Moderate or complex monitoring tasks will presumably be accessed with perceptual information processing. Data should thus be visualised with graphs.Originality/value– The authors provide empirical evidence that supplementary graphs in management reports improve decision quality but not decision confidence. The authors furthermore illustrate the limits of the explaining power of the cognitive fit model in a management report context. In an extension of cognitive fit theory, the authors argue that proficiency plays a crucial role in performance evaluation tasks. The authors propose a process for visualisation of management reports based on their findings and previous findings.

Increasing the usefulness of farm financial information and management

Purpose – The purpose of this paper is to examine how farm management and farm accounting may be improved from the accountant’s perspective. Design/methodology/approach – There has been a dearth of qualitative studies examining accountant’s attitudes to financial reports. This study therefore interviews 13 rural accountants regarding their opinions on the usefulness of financial information they provide to farmers, and what types of financial information could aid farm management. Findings – Accountants generally agree that the present financial reports provided to farmers are of little decision-making value, since they are made for the purposes of compliance. In response, the accountants suggest a number of management accounting reports can better aid farmers. Practical implications – Accountants are important to the success of farms, yet in-depth responses have not previously been sought on the reports that accountants produce for farmers. This research provides accountants’ opinions on how reports could be more useful for farmers and how more focused management accounting reports can assist decision-making. Originality/value – The qualitative approach used in this research provides a fresh and richer perspective on the usefulness of accounting to farm management. Interviewing the adviser rather than the business owner is relatively uncommon in agricultural organisations. The interviews have allowed the thoughts and concerns of accountants to come to light in a manner not previously achieved in organisational studies which relate farming and accounting.

Evaluating Impact of Management Accounting Performance on ERP System's Effectiveness : A Case Study of Insurance Company of Atiyehsazan Hafez - Iran

The objective of this study is evaluating impact of management accounting performance on ERP system’s effectiveness (case study: Insurance Company of Atiyehsazan Hafez -Iran). Method of this study in term of objective is applied and in term of implementation is a description of causal type and finally method of data collecting is field. Questionnaire is considered as tools of data collection. Branches of Insurance Company of Atiyehsazan Hafez that are 36 branches are considered as statistical population. The number of samples analyzed has been 32 branches. Sampling method in this study has been non-probability sampling and convenience. Descriptive and inferential statistical methods are used to analyze data. In descriptive method is used indicators of such as mean, frequency and standard deviation and to test their hypotheses in inferential statistic are used regression method. The results of hypotheses test showed that components of performance management accounting (quality of management accounting reports, the adoption of new methods of management accounting, improving the decision-making process, the quality of management accounting information) have an impact on the effectiveness of enterprise resource planning but the responsibility of management accountants does not affect the effectiveness of enterprise resource planning.

Strategic governance and management accounting: evidence from a case study

This paper seeks to establish if top management (the board) of a firm should extend its overview of the governance process to the execution of strategy (i.e., strategic governance) and, if so, does the management accounting information system (MAIS) have a role in facilitating this strategy execution process. This study investigated the role of the board and MAIS in strategic governance by examining a company with a public record of both successful governance and integrated strategic management accounting processes in a high-risk industry. The analysis demonstrates that boards should go beyond the minimum conformance (compliance) requirements of the governance-regulatory legislation and assume ultimate responsibility for strategy execution and enterprise performance. However, while management accounting techniques, processes and reports were found to be used extensively in strategic governance to integrate the policy-management interface in numerous conformance‐performance domains, the traditional role of the management accountant was found to be limited in terms of their role in such governance. The study demonstrates that a more strategic governance role offers the management accountant a way back into senior management by using the routines of management accounting to socialize the board and curb any opportunism that may arise.

Management accounting: An instrument for implementing effective corporate governance

Management accounting is not given sufficient emphasis, at the board level, as a provider of timely and relevant information to facilitate the execution of good corporate governance. Without management accounting information corporations in Botswana may find it difficult to create sustainable corporate governance. A qualitative approach using questionnaires and interviews were used to establish the extent to which management accounting tools are applied by the directors in the target companies. The research was carried out amongst listed companies on the stock exchange and the parastatal companies in Botswana. Furthermore documentation, for instance annual financial statements from the companies were reviewed. Most directors in the companies do not fully utilise the tools of management accounting in decision making. Management accountants have also failed to provide the relevant information to the board. To execute their duties efficiently, directors may need to call for the management accounting reports from the senior management level up to the board level and regularly use these reports to facilitate decision making. Key words: Management accounting, corporate governance.

Strategic Governance and Management Accounting: Evidence From a Case Study

This paper seeks to establish if top management (the board) of a firm should extend its overview of the governance process to the execution of strategy (i.e., strategic governance) and, if so, does the management accounting information system (MAIS) have a role in facilitating this strategy execution process. This study investigated the role of the board and MAIS in strategic governance by examining a company with a public record of both successful governance and integrated strategic management accounting processes in a high-risk industry. The analysis demonstrates that boards should go beyond the minimum conformance (compliance) requirements of the governance-regulatory legislation and assume ultimate responsibility for strategy execution and enterprise performance. However, while management accounting techniques, processes and reports were found to be used extensively in strategic governance to integrate the policy-management interface in numerous conformance–performance domains, the traditional role of the management accountant was found to be limited in terms of their role in such governance. The study demonstrates that a more strategic governance role offers the management accountant a way back into senior management by using the routines of management accounting to socialize the board and curb any opportunism that may arise.

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.

A Survey On Financial and Management Accounting Practices Among Small and Medium Enterprises in Malaysia

In the current business environment, firms are faced with intensifying competition locally and globally, and fast changes in customers and technologies. In this environment it is vital that small and medium enterprises (SMEs) are equipped with appropriate and modern financial and management accounting practices in order for them to survive and remain profitable. One of the factors that determine the performance of a business organization is effective use of financial and management accounting reports. However, thus far very little published evidence on accounting practices among SMEs in Malaysia is found. This study aims to examine the financial and management accounting practices among SMEs in Malaysia and to investigate perceived usefulness of accounting reports for decision making. A survey was carried out using the SMEs in manufacturing listed by SMIDEC, as the sampling frame. A total of 76 usable questionnaires were used for the final data analysis. The findings from the survey provide pertinent and useful insights into the current financial and management accounting practices and the level of perceived usefulness of the accounting reports among SMEs. The results of the study indicate that a majority of the firms surveyed prepare their financial and management accounting reports on a monthly basis. With regards to the purpose of financial accounting reports, the results show that preparing tax returns rank first, followed by providing information to shareholders, and providing information to government agencies. Management accounting reports provide the most useful information for planning and control, followed by product pricing and lastly, employee performance evaluation. Financial accounting reports were perceived to be more useful than management accounting reports. Among the financial accounting reports, profit and loss statement was considered as most useful, followed by cash flow and balance sheet. Among the management accounting reports, production report was rated highest in terms of usefulness, followed by budget and variance analysis.

O suporte informacional da controladoria para o processo decisório da distribuição física de produtos

O objetivo da pesquisa, a partir da qual foi elaborado este artigo, consiste em averiguar o suporte informacional da Controladoria para o processo decisório da Logística, com vistas à função de distribuição física dos produtos. Neste sentido, selecionou-se três empresas, a partir de uma relação das empresas de capital aberto do estado de Santa Catarina, obtida junto à homepage da Comissão de Valores Mobiliários - CVM, que possuem uma Controladoria enquanto órgão administrativo e um setor de Logística. Constatou-se que a Controladoria exerce suas funções a fim de contribuir para a otimização dos resultados globais da empresa, contudo não necessariamente gerencia o sistema de informações contábeis-gerenciais nas mesmas. Portanto, conclui-se que os relatórios contábeisgerenciais gerados pela Controladoria com vistas à função da distribuição física de produtos, em geral, não são emitidos de forma específica para o processo decisório da Logística, visto que esta particularidade somente ocorre a partir do momento em que a Controladoria gerencia o sistema de informações. Nas empresas pesquisadas esta função é atribuída à Controladoria em apenas uma delas.