Management Accounting Techniques Research Articles

Exploring structures of product costing systems adopted by Sri Lankan listed companies: focusing on traditional vs. activity based costing systems

As the business environment has been changing continuously, it is critical to ensure that an appropriate MA system is adopted in organizations for intended purposes. The main objective of this study is to investigate patterns of adopting management accounting (MA) techniques by Sri Lankan listed companies for product costing purposes. This study applies Mixed Method Research approach. Accordingly, data were collected from 42 listed companies representing five industry sectors in Sri Lanka: Food Beverages & Tobacco, Chemicals & Pharmaceuticals, Diversified Holdings, Manufacturing, and Plantation, through interviews and discussions supplementary to the survey. The main tools of analysis for quantitative data were frequency tables, Pie charts, bar charts and Fisher’s exact tests using SPSS software, and thematic analysis and content analysis for descriptive data. The findings suggest that Traditional Costing (TC) systems are still popular among all selected industry sectors/companies except for Plantation sector who apply TC by 25% of companies, as they all apply ABC instead. Considering multiple costing systems, the most popular combination is the application of TC with an activity based costing (ABC) system, as complements or alternatives to one another. The study concludes that listed companies are satisfied with the MA techniques adopted for product costing as either single or multiple systems, regardless of whether they are traditional or modern techniques. Even though Sri Lankan listed companies are functioning with sufficient resources and well-equipped staff that require adoption of modern MA techniques i.e. ABC, most reveal that they still see no need to adopt such techniques because they are satisfied with existing systems and applications.

Brand Valuation From Strategic Management Accounting Techniques and A Practice

Stratejik Yönetim Muhasebesi, işletmelere sektörlerinde rekabet avantajı sağlamak adına alınacak stratejik kararlarda yol gösteren önemli bir kavramdır. Marka değerlemesi de stratejik yönetim muhasebesi tekniklerinden biri olarak stratejik karar alma kategorisinde yer alarak işletmelere ek getiri sağlayan ve finansal tablolarda ayrı olarak raporlanmayan markanın parasal değerini ortaya koymaktadır. Marka, bir işletmeye içinde bulunduğu sektörde itici güç sağlayarak rakiplerine göre farklılık yaratır. Marka; soyut anlamda firmaya yer aldığı sektörde prestijli bir konum ve buna bağlı olarak kabul edilirlik sağlarken somut anlamda ise, işletmelere ek getiri sağlayabilecek en önemli araçlardan biridir. Bu bağlamda markanın değerini ölçmek, önemli bir konu olarak karşımıza çıkmaktadır. Marka değerini ölçmek için davranışsal, finansal ve karma yöntemler söz konusudur. Çalışmamızda ise finansal yöntemler içerisinde yer alan Hirose Yöntemi kullanılmıştır. Bu çalışma, işletmelerin marka değerlerini en doğru olacak şekilde saptamak amacıyla yapılmıştır. Çalışmada kullanılan veriler hisse senetleri Borsa İstanbul (BİST)’da işlem gören işletmelerin finansal tabloları aracılığıyla elde edilmiştir. Araştırmanın evrenini BİST Taş ve Toprağa Dayalı Sanayi sektöründe yer alan 28 tane işletme oluşturmaktadır. Verileri analize uygun olan 25 tane işletme değerlendirmeye alınmıştır. Elde edilen sonuçlara göre Trakya Cam, marka değeri en yüksek olan işletme olarak tespit edilmiştir. Diğer sonuçlarda ise, Anadolu Cam en yüksek ikinci marka değerine, İzocam da en yüksek üçüncü marka değerine sahipken; Denizli Cam’ın da en düşük marka değerine sahip olduğu saptanmıştır. Stratejik Yönetim Muhasebesi, işletmelere sektörlerinde rekabet avantajı sağlamak adına alınacak stratejik kararlarda yol gösteren önemli bir kavramdır. Marka değerlemesi de stratejik yönetim muhasebesi tekniklerinden biri olarak stratejik karar alma kategorisinde yer alarak işletmelere ek getiri sağlayan ve finansal tablolarda ayrı olarak raporlanmayan markanın parasal değerini ortaya koymaktadır. Marka, bir işletmeye içinde bulunduğu sektörde itici güç sağlayarak rakiplerine göre farklılık yaratır. Marka; soyut anlamda firmaya yer aldığı sektörde prestijli bir konum ve buna bağlı olarak kabul edilirlik sağlarken somut anlamda ise, işletmelere ek getiri sağlayabilecek en önemli araçlardan biridir. Bu bağlamda markanın değerini ölçmek, önemli bir konu olarak karşımıza çıkmaktadır. Marka değerini ölçmek için davranışsal, finansal ve karma yöntemler söz konusudur. Çalışmamızda ise finansal yöntemler içerisinde yer alan Hirose Yöntemi kullanılmıştır. Bu çalışma, işletmelerin marka değerlerini en doğru olacak şekilde saptamak amacıyla yapılmıştır. Çalışmada kullanılan veriler hisse senetleri Borsa İstanbul (BİST)’da işlem gören işletmelerin finansal tabloları aracılığıyla elde edilmiştir. Araştırmanın evrenini BİST Taş ve Toprağa Dayalı Sanayi sektöründe yer alan 28 tane işletme oluşturmaktadır. Verileri analize uygun olan 25 tane işletme değerlendirmeye alınmıştır. Elde edilen sonuçlara göre Trakya Cam, marka değeri en yüksek olan işletme olarak tespit edilmiştir. Diğer sonuçlarda ise, Anadolu Cam en yüksek ikinci marka değerine, İzocam da en yüksek üçüncü marka değerine sahipken; Denizli Cam’ın da en düşük marka değerine sahip olduğu saptanmıştır.

Educating management accountants as business partners

Purpose The purpose of this paper is to demonstrate a paradigmatic foundation for educators to prepare students of management accounting for the new demands of the role of trusted business partner in practice. Design/methodology/approach The paper argues for the use of pragmatic constructivism as a basis for development of a paradigmatic foundation for educating advanced students of management accounting. Furthermore, it contains an empirical insight through a case example of how pragmatic constructivism can be used as a pedagogical tool in different management accounting educational situations. Findings The analysis shows how pragmatic constructivism can be used as a less reductionist paradigm than realism to tackle the research-teaching-practice deficiencies found in conventional thinking on accounting education. Pragmatic constructivism is shown to provide important methodological and conceptual elements in developing, understanding and guiding the application of management accounting techniques in dynamic business practices. Placing an emphasis on teaching methodological skills relevant for management accountants is shown to have an important impact on students and their ability to act as business partners. Research limitations/implications The analysis is exploratory in the sense that a new paradigmatic framework for educating students of management accounting to be business partners is outlined and illustrated through its implementation in a specific master’s degree programme. However, this analysis should be viewed as only a first step towards developing pragmatic constructivism as a paradigmatic foundation for teaching management accounting as a basis for a business partner role. Originality/value The proposed use of research on pragmatic constructivism as a basis for management accounting education to support a future business partner role is novel in the literature on management accounting. The value of its application lies in its potential to create successful utilisation of the practices of management accounting.

Strategic Costing Models as Strategic Management Accounting Techniques at Private Universities in Riau, Indonesia

As a strategic management in accounting, strategic coasting has attracted the practioners and scholars because the significant influences to comptetitive advantage and organizational performance. This study is aim to explore integrated strategic costing model as an effort to improve competitive advantage and performance of higher education institution. This study also provide the guideline for effectively and efficiently of cost control. A specific strategic costing –activity based costing, value chain costing, quality costing, lifecycle costing and target costing- was elaborated through literature review form each attributes simultaneously and according to comprehensive model that integrated each of principles. The study concluded the scheme is compatible and complete each other according to theoretical point of view due to the integrated implementation of the principles and attributes contribute to organization performance improve. We also argue that the scheme is contribute to distribution of strategic costing attribute and exploitation of organization resources. A new management system proposing to the incorporation of strategic costing attributes into the management of higher education organization resources, and some recommendations for practical use are presented.

The Integration of Management Accounting Techniques in the Functional-based Costing System

With the methodological development of cost accounting, there is a transition from the spatial plane of cost grouping, which has traditionally been considered as a “functional” one, to the process evaluation. At the same time, the development of the concept of Functional-Based Costing is making a transition today from grouping costs based on structural units of an enterprise to an integral system of cost accounting methods, based on generalized functional areas of economic processes (such as automation, HR, transport logistics, R&D, compliance etc.). In the economy of an enterprise, they include a much wider range of processes rather than just the work of a specialized structural unit of that enterprise. In contrast to the previously developed costing techniques, which predominantly consisted of the new methods of cost analysis, Functional-Based Costing is not an alternative direction in management accounting methodology but is a synthetic framework that allows to integrate the results of other costing approaches that are already known and researched to date. At the same time, the functional unity of processes and resources allows us to consider the development of the approach both in the context of further dissemination of Resource Consumption Accounting as well as in the context of the development of Life Cycle Costing.

The impact of environmental changes on the rate of current use of corporate operational management accounting techniques and the evolution of the use of these techniques

Nowadays, the movement toward privatization, changes in patterns of competition, production, corporate structure, the pace of technology development and the introduction of world trade, the importance of MA in business is well evident. In these cases, doing scientific research in this area is necessary. The purpose of this study was to investigate the effects of business environment and its changes on the level of Current use of companies of management accounting techniques and the development of use of these techniques.Methodology:The aim of the present studies is applied and in terms of research methods it is descriptive survey and required data have been collected by using of questionnaire .The statistical population of this study has been formed of active manufacturing companies in Yazd which use of actual cost accounting and operational techniques of accounting management. 100 questionnaires distributed among the available samples and 55 acceptable questionnaires have been collected. Data analysis is done by use of SPSS and pls2 Smart software and general survey. Results:the results of hypothesis testing showed that the impact of the current state of the business environment and its changes on the use and development of management accounting techniques is positive (direct) and meaningful.Conclusion:Finally, the managers of manufacturing companies are recommended to form a team of highly qualified staff to understand the rapid changes in the environment have simultaneously the ability to understand the Identification of the environmental changes and selection and development of appropriate techniques with these changes.

Reviewing Balance Scorecard (BSC) application in management accounting

Balanced evaluation technique is one of the most important and modern techniques of evaluating organization’s performance operations and according to the development of organization’s performance evaluation methods, it is necessary to pay attention to select a method that has the most investment return rate as much as possible. This paper addresses the reviewing of “balanced evaluation” technique that is one of the most modern techniques of management accounting. Methodology: Then balanced evaluation technique and its aspects and necessary steps in order to prepare it are described briefly. Finally, challenges and solutions presented are addressed to remove the challenges of evaluating this technique. Results: In fact, it can be said that BSC nowadays becomes like a language to evaluate institutes. Briefly, BSC is a Top-Down system on organizational performance, in which general perspectives must be classified as the first stage (general goals) and managers must decide that which strategy reach us to our goals after organizational structure and infrastructure stability. Conclusion: BSC meanwhile helping the management in acquiring organization’s information sources application and results from products production; helps him/her in reviewing performance empty spaces strategy elements and parts (Unknown capabilities). BSC enables the manager to know economic conditions results, quantitative goals, seasonal conditions, competitors’ activities, physical capacity planning, and labor productivity and production problems and to act about the elimination of defects by gathering suggestions and making the decision and helps him/her whether or not to allocate resources.

DOES THE USE OF STRATEGIC MANAGEMENT ACCOUNTING TECHNIQUES CREATES AND SUSTAINS COMPETITIVE ADVANTAGE? SOME EMPIRICAL EVIDENCE

This study examined the extent to which the usage of strategic management accounting (SMA) techniques such as customer accounting and competitor accounting can create and sustain competitive advantage, with a focus on the manufacturing sector in Nigeria. Data obtained from the annual reports of fifty-six (56) publicly-quoted companies covering a 10-year period (2008-2017) were analysed using descriptive statistics, cluster analysis, cross tabulation, Chi-square test of association, and discriminant analysis. Whereas the frequency of high-adopters of customer-based and competitor-focused techniques was less than those of low-adopters, the adoption rate of SMA was noted to be generally moderate. Further, the usage of SMA positively and significantly impact competitive advantage. The observation that intense users of SMA were able to consistently outperform competitors at both the industry- and sector- level in the long-term supports the conclusion that to a large extent, SMA usage can both create and sustain competitive advantage. Seeing that it is not the mere adoption of SMA that sustains competitive advantage but its intense usage, organisations seeking strategies to improve their competitiveness may consider the rigorous application of SMA.

What Auditors Talk About When They Talk About Public-Private Partnerships

This paper examines how a legislative auditor inserted the audit function into the accountability framework governing Public-Private Partnerships (PPP, 3P) in the education sector in New Brunswick, a small Canadian province. By examining two separate case studies of public-private partnerships separated by 13 years, this research offers a rare chance to track the evolution of the Auditor General’s audit practices, and, also, of the management accounting techniques employed inside the Government of New Brunswick. The findings of the Auditor General in both instances challenged the credibility of government’s Value-for-Money assertions for its public-private partnership arrangements. In doing so, the Auditor General cast serious doubt on the notion that all public-private partnerships are value-creating. This study also represents a somewhat rare academic study of the involvement of a Canadian legislative auditor in the analysis of a public-private partnership. Further, it outlines a number of areas for future study.

Changes in Business Processes and Management Accounting Techniques and strategies

The role of a management accountant in today’s business world is more of an information provider who almost acts as a strategic advisor. This paper analyses this statement in the context of major types of strategic, operational and ad-hoc decisions of managers that are influenced by management accounting principles. The management accounting techniques discussed in this paper is not exhaustive and is limited to the scope of this paper.

Management Accounting Practices in Srilanka: Investigation in Banking Sector

The purpose of this paper is to report the results of an investigation on the use of management accounting techniques among Sri Lankan banking sector. This research finding is based on questionnaire survey done among 30 banks in Sri Lanka. The analysis revealed that there is an enthusiasm among managers in implementing management accounting techniques in their organizations decision making process. According to the respondents response most of firms widely used net present value and internal rate of return techniques for decision making process. However, deeper analysis of data revealed that there is a lack of utilization of accounting rate of return, payback period and profitability index techniques among the managers. The findings of the paper will provide information to the practitioners to utilize management accounting techniques in their organizations and to academics to design courses for management accounting to enhance quality of management decision making process. It is important to implement the related techniques in full to realize the benefits of management accounting techniques. This paper reveals the level of use of these techniques by the banking sector managers in Sri Lanka.

Strategic Management Accounting Techniques Usage, Strategic Choices, and Performance of Financial Institutions in Nigeria

The paper examined the impact of strategic management accounting (SMA) techniques? usage and strategic choices on the performance of financial institutions in Nigeria. Based on the administration of questionnaire to 156 top management employees of 13 deposit money banks in Benin metropolis, Edo State the paper examined whether SMA dimensions (17 SMA techniques usage and the participation of accountants in strategic decision making) and strategic choices (strategic pattern, emergent strategy and market orientation) affect the performance of deposit money banks. The findings from the multiple regression analysis showed that whereas SMA techniques usage had a significantly negative impact on corporate financial performance, accountant participation in strategic decision making, strategy pattern, deliberate/ emergent strategy and market orientation had a significantly positive impact on the performance of the banks.Therefore, the paper recommended that management of financial organizations should improve their usage of SMA techniques which is presently low, involve accountants in the strategic decision making process and employ more emergent and market oriented strategies in order to improve their performance.

The Role of Accounting for the Innovation-oriented Organizations in Digital Economy

Purpose: The article aims to summarize the methodological approaches to the accounting and information segments selection, covering various groups of economic indicators, depending on external and internal factors affecting the business of innovation-oriented organizations. Design/Methodology/Approach: For management purposes, management accounting capabilities are of increasing interest. However, the subjective approach of various authors to the characterization of management accounting tools and their implementation in practice does not make it possible to evaluate the real contribution of accounting to business management. Findings: The authors proposed an accounting technique based on the accounting resource concentration in terms of significant for management information segments focused on the continuing innovative production feasibility decision-making in connection with the emergence of information about the business risk areas. Practical implications: Such an approach will make it possible to more accurately assess the management objects’ cost-effectiveness in relation to responsibility for incurring costs for each management segment, which corresponds to a similar object of management or accounting in management practice. Originality/value: The main contribution of this study is the standardization of management accounting techniques for innovative production indicators.

The Impact of Strategic Management Accounting Adoption on Organizational Effectiveness in Malaysian Manufacturing Companies

Strategic Management Accounting (SMA) technique plays a vital role in accounting management of an organization. This is because; SMA helps the accountants and other workers to manage their accounting systems efficiently and more orderly arranged. The aim of this study is to find out about technique of SMA that been applied in the organization specifically focused on manufacturing companies and the impact of the technique on organizational effectiveness. The result showed that all the 376 companies applied at least one SMA technique and specifically refers to the industry classification; the highest companies that applied SMA were electrical companies. The result also showed that SMA has impact on organizational effectiveness.

Halal Food Processing and the Relationship with Management Accounting Techniques: A Study from the Malaysian Practices

In Islam, there are two basic requirements on food for human consumption, which are halal and toyyib. Halal signifies the permitted food in Islam, whereas toyyib stresses about purity of food. In brief, halal food in Islam shall comprise only permitted ingredients (halal) and needs to be submitted through a good processing system. This to ensure that food is hygienic and safe for consumption. In order to secure a good processing, other Islamic values such as avoid wastage and effectively use of resources are incorporated as part of the halal food processing. In Malaysia, this process is governed by the MS 1500:2009. This process is expected to lead the food producers to a good food processing system. Therefore, this study is designed to investigate the practices of halal food processing and its relationship with management accounting technique. A questionnaire survey was used and distributed to the respondents involved in halal food industries. The results of the study confirmed that halal food processing is a good processing system. Moreover, this study revealed that there are elements of Management Accounting (MA) techniques being implemented in this processing. This study concluded that halal food is beyond the Muslim’s food issues. It is a universal concept on food processing that shall be applied to all food producers.

The Application of Management Accounting Techniques at Star Hotels in Denpasar City

This study aims to identify management accounting techniques applied in the hotel industry in Denpasar, Bali. Besides, this study also aims to find out how useful the information generated by the technique for management in the decision-making process. The survey results distributed offline and online are processed and analyzed by using descriptive techniques. The study results show that management accounting techniques have been applied in hotels within certain limits. The most common application of management accounting techniques employed by hotels is the preparation of flexible operating budgets and the financial performance assessment as a benchmark of budget conformity. Despite the less application of other management accounting techniques, the company realizes that the benefits resulting from this management accounting information are very important. The company's inability to provide information from other management accounting techniques is mostly caused by the inability of human resources in using such techniques.

Advanced Managerial Accounting Techniques and Decision Support System: An Empirical Analysis of Small And Medium Enterprises in Jordan

This study investigates the empirical analysis of advanced managerial accounting techniques on decision support system in small and medium enterprises in Jordan. The crucial role played by small and medium-sized companies have a major impact on the economies of countries. Therefore, working at maximum cost-effectiveness is vital to both survival and competitiveness because most SMEs in developing countries operate in crowded and competitive markets. To obtain the objectives of the study, the researcher conducted a questionnaire survey, a sample was of 100 managers and 200 employees’ respondents was purposefully sampled, in SMEs in Amman capital city of Jordan. The purpose of the sample is to see the effect of accounting management techniques and decision support system in small and medium enterprises and the researcher take the demographic variables; gender, management level, age, education, and use of technology and financial controlling systemare taken as moderating variables. The statistical tests were applied to analyze the data. The results of the study showed the significant impact of advanced managerial accounting techniques and decision support on SMEs. The study also found that financial controlling system and the use of technology has a positive impact on performance. In light of the results the researcher has made a number of recommendations that will help the Jordanian enterprises, in order to be able to interact and respond to economic, environmental and social variables and respond to economic, environmental and social variables.

Management accounting practices, governing boards and competitive advantage of Ugandan secondary schools

PurposeThe purpose of this paper is to report on the results of a study carried out to determine the use of Management Accounting Practices (MAPR) in Ugandan secondary schools. The study also sought to determine whether MAPR and governing boards (board size, gender diversity and frequency of board meetings) influence the perceived competitive advantage.Design/methodology/approachThis study is cross-sectional and correlational. Data were collected through a questionnaire survey of 200 secondary schools. The data were analysed through ordinary least squares regression using Statistical Package for Social Scientists.FindingsThere are wide variations in MAP in terms of the extent to which the schools employ management accounting techniques. Also, MAP and governing boards have a predictive force on the schools’ competitive advantage. However, governing board’s size has no effect on competitive advantage. In terms of the control variables, the results suggest that while government school ownership has a positive effect on competitive advantage, the school’s size has no effect. There are intertwining relationships of frequency of board meetings, board size and school size.Research limitations/implicationsThe present study was limited to the secondary schools in Uganda which limits generalisability. Still, the results offer important implications for secondary schools’ governing boards, owners and for similar African governments who are a major stakeholder in the secondary school education system. The exact mechanism by which intertwining relationships of frequency of board meetings, board size and school size impact competitive advantage is not been explored in this paper. Future researchers may direct research effort in this endeavour.Originality/valueTo the authors’ knowledge, this is the first study to investigate use of MAPR in secondary schools and to provide evidence of their efficacy.

Reliable estimation of suppliers’ total cost of ownership: An imprecise data envelopment analysis model with common weights

Total cost of ownership (TCO) is a management accounting technique that evaluates the total cost of a business partnership using a time-consuming activity-based costing procedure. Studies have suggested that TCO-based data envelopment analysis (DEA) can effectively estimate the results of TCO with substantially less effort and time; however, its adoption in practice is limited due to certain shortcomings. First, managers struggle to understand and accept the uncommon weighting schemes of existing TCO-based DEA models because traditional TCO analyses require a common set of weights. Second, both the traditional TCO approach and TCO-based DEA models are designed to handle precise data, whereas TCO analyses often involve imprecise data from conflicting data sources and estimations.To address the managerial and technical issues of handling weighting schemes and imprecise data, this paper proposes a novel TCO-based model: common set of weights imprecise DEA (CSW-IDEA). We validate the proposed methodology using real-life datasets from 175 suppliers that serve five key components to two multinational mechanical manufacturers. For both precise data and imprecise data, the proposed CSW-IDEA reliably approximates traditional TCO calculations significantly better than existing TCO-based DEA. The cost savings that can be theoretically generated by applying the CSW-IDEA approach are similar to the cost savings estimated by the traditional TCO approach.

“Oh This Learning, What a Thing It Is!”—Putting Sustainability First in Teaching Techniques and in Content

Although sustainability has become a strategic topic at many universities, working towards a learning approach in which sustainability is the fundament underlying and permeating the entire course is hardly straightforward. This paper is a case study on the development, the teaching, and the evaluation of one specific course that aims to achieve this. Based on (participant) observation, documents, and discussion with students and other stakeholders, we describe and analyze the results of the transformation of the course ‘advanced management accounting techniques’ for Masters students at the University of Groningen, in the academic year 2017–2018. We show how the course was transformed in a way to increase both a general, a business, and an accounting awareness of the importance of sustainability, while also applying a new teaching approach, namely lemniscate learning, to support this. Our course was the first in the faculty to make this transformation, and although the majority of the students were enthusiastic, the faculty staff was cautiously positive. In presenting our findings, we aim at supporting educators and other stakeholders at universities, by supplying a case study on the transformation of our course, and by scrutinizing the problems that we encountered, the feedback, both positive and negative, that we received, and the challenges that still face us, both on a course and a university level. Thus, we hope to be a source of inspiration and advice for others and to further advance our understanding of the dilemmas, practicalities, and challenges in working towards sustainability in teaching.