Predicting Change in Management Accounting and Control Systems: Additional Evidence from Australia

29 Pages Posted: 16 Jul 2008

Date Written: July 15, 2008

Abstract

This paper reports the results of a questionnaire survey investigating organizational and environmental determinants of the rate of changes in management accounting and control systems (MACS) within Australian manufacturing firms. The Australian findings are also compared with the findings of two related prior studies [Libby, T., and Waterhouse, J. H. 1996. Predicting change in management accounting system. Journal of Management Accounting Research, 8, 137-150; and Williams, J. J., and Seaman, A. E. 2001. Predicting change in management accounting systems: national culture and industry effects. Accounting, Organizations and Society, 26, 443-460]. The change rate for a list of 23 components of MACS and the extent to which this rate is associated with intensity of market competition, decentralization, organizational capacity to learn, and firm size are reported. The study uses survey responses of 34 managers, drawn from a cross-section of Australian manufacturing companies. In the current study, the average number of changes in MACS in the sample organizations was 5.29 times in the period 2003-2005; this was 15.7 percent more than the average of 4.46 changes reported by Libby and Waterhouse and 44.8 percent more than the average of 2.92 changes reported by Williams and Seaman in their sample manufacturing firms. Consistent with Libby and Waterhouse, the results provide strong support for a positive association between the rate for changes in MACS and intensely competitive environments. Also, consistent with Libby and Waterhouse and Williams and Seaman, organizational capacity to learn was found to be an important predictor of the rate for changes in MACS. However, contrary to expectation, the rate for changes in MACS is not significantly associated with decentralization. On the other hand, contrary to Libby and Waterhouse and Williams and Seaman, firm size appeared to be an important predictor of the rate for changes in MACS.

Keywords: Management accounting control system, management accounting change, contingent factors, environmental factors, contingency theory, international comparison

JEL Classification: M40, M46, M47, C93

Suggested Citation

Hoque, Zahirul, Predicting Change in Management Accounting and Control Systems: Additional Evidence from Australia (July 15, 2008). Available at SSRN: https://ssrn.com/abstract=1160125 or http://dx.doi.org/10.2139/ssrn.1160125

Zahirul Hoque (Contact Author)

La Trobe University ( email )

La Trobe Business School
Department of Accounting and Data Analytics
Bundoora, Victoria 3086
Australia
+61 3 9479 3433 (Phone)
+61 3 9479 2356 (Fax)

HOME PAGE: http://www.latrobe.edu.au/business/profiles/hoque.html

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