What Factors Drive Change in

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MALAYSIAN ACCOUNTING REVIEW
Volume 7 No. 1 July 2008

Sponsored by:

Accounting Research Institute & Faculty of Accountancy Universiti Teknologi MARA Malaysia & Malaysian Accountancy Research and Education Foundation (A Trust Body Sponsored by the Malaysian Institute of Accountants)

WHAT FACTORS DRIVE CHANGE IN MANAGEMENT ACCOUNTING IN MALAYSIAN ORGANISATIONS? Suzana Sulaiman Aliza Ramli Accounting Research Institute & Faculty of Accountancy Universiti Teknologi MARA, Malaysia Falconer Mitchell University of Edinburgh, UK Abstract Without knowledge of how the management accounting (MA) discipline changes, its development cannot be properly understood. Prior research indicates that MA has been changing and that many factors are implicated in its change. This study explores the factors which cause management accounting change in Malaysia. MA change is taken to encompass not only MA per se but also its composition as represented by the techniques, skills and roles of the management accountant. These are investigated by surveying experienced, professionally qualified management accountants working in Malaysian organisations. A range of factors were identified as significant change drivers and these differ across the three components of MA. Keywords: Management Accounting change; change drivers; Management Accounting techniques; Management Accountant roles; Management Accountant skills.

Introduction
If the discipline of Management Accounting (MA) is to be explained and understood then research focusing on its change will play an important role. It is in the study of the dynamics of the discipline that the forces and influences underlying its development will be most visible. Their identification can illuminate our comprehension of how MA has attained its existing forms. Without such knowledge those involved in the design of MA systems, those involved in the management of the profession and those involved in the education of new generations of management accountants will operate with an inadequate comprehension of the focus of their activities. MA system designers need to be sensitive to the factors which merit change if they are to maintain an important organizational role by supplying relevant information to management and

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MALAYSIAN ACCOUNTING REVIEW, VOLUME 7 NO. 1, 2008

operating in a role appropriate to contemporary circumstances. Consequently, this study aims to investigate the factors which have caused MA change. This involves identifying these factors and ascertaining the strength of their association with MA change. In contrast with much of the prior research on management accounting change this is done within the setting of a developing country, Malaysia. MA is an activity involving the provision of information to management within an organisation. It thus comprises not only the application of practical techniques (whose application generates the information) but also the skills (locus of competencies) and the role (from that of pure information provider through information interpreter to business decision-making partner) of the management accountant. All three of these aspects of management accounting can change independently and consequently they are all incorporated separately into the empirical study conducted. Relevant evidence for the investigation was gathered by obtaining the views of professionally qualified, experienced Malaysian management accountants, using the survey method. The remainder of the paper is structured as follows: A review of the literature relating to various aspects of MA change is undertaken. This is followed by an explanation of the research methods and the presentation of findings. Finally, some conclusions are drawn.

Literature Review
The literature review is designed with three purposes in mind. The first is to demonstrate that MA change is an important characteristic of the discipline as it is a common aspect of real world MA. The second is to identify...
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