ARTICLE I COST
COST, PRODUCTIVITY, PROFIT AND EFFICIENCY: AN EMPIRICAL STUDY CONDUCTED THROUGH THE MANAGEMENT ACCOUNTING
BACKGROUND OF STUDY
This study is to test the connection that exist among cost, productivity, profit and efficiency through the management accounting (Bebe?elea, 2015). The researcher is attempting to confirm the connection as stated by using the method of calculation called Direct Costing method. The importance of ensuring the best possible growth of volumes and quality of production will lead to an intense economic growth that contribute to the people welfare materially and spiritually.
Due to the concern of competitive in related field such as marketing, management and others, the calculation of cost become vital and lead to the revolution in the methodology compare to traditional method. There are numerous costs involve in production which includes advanced manufacturing technologies such as automated advance technology, flexible manufacturing system etc. Considering the limitation of traditional approach in cost calculation, this study tries to analyze using Direct-Costing calculation.
In conducting the study, the researcher is trying to test the hypothesis upon the connection that exist among cost, productivity, profit and efficiency through the management accounting. The purpose of the research is to identify:
? the instrumental research conducted with the help of the indicators calculated according to the statistical and mathematical model;
? the descriptive research which aims to prove the description and evaluation of the cost, profit, productivity and efficiency indicators;
? the explanatory research which has as purpose the study of the causes that explain the evolution in time and space of the cost, productivity, profit, efficiency indicators;
? the conclusive or confirmation research (C?toiu, 2002) which aims to test the researcher’s hypothesis.
Based on the approach in getting the finding to test the hypothesis, the researcher is using qualitative research combine with quantitative elements which observance has been done of some rules and principles characteristic of mixed research methodology. The study is analyzing the term involved as to ascertain accurate finding to determine the correlation on the subjects which are cost, profit and efficiency. The researcher is using management accounting as a tool to evaluate the cost, profits and efficiency indicators and their evolution in time.
The correlation is expressed through Direct-Costing method such as break-even threshold or the point of equilibrium, the coverage factor or the margin contributory, the safety factor and the coefficient of the dynamic safety.
RESULTS OF THE STUDY
The study shows significant increase in coverage factor, coefficient of the dynamic safety, and profit when the controlled percentage growth of the selling price is put in place. Since direct-costing is considering the unit cost only as the variable cost, any growth of the volume in production or the reduction of the variable costs will lead to the maintenance or the loss of the balance of those factors that discuss in this study.
This study concludes that the applicable of Direct-Costing method can be a basis of making efficient decision-making, to determine the level of sales in getting targeted benefits and provide information on variable cost to know the effect on the profit or loss. Based on the finding, the researcher has proven the hypothesis is true that connection between cost-productivity-profit-efficiency exits through management accounting test.
THE EFFECT INFORMATION LITERACY ON MANGERIAL PERFORMANCE: THE MEDIATING ROLE OF STRATEGIC MANAGEMENT ACCOUNTING AND THE MODERATING ROLE OF SELF EFFICACY
BACKGROUND OF STUDY
In this study, the researcher is attempting to examine the mediating effect of Strategic Management Accounting (SMA) information usage on the relationship between information literacy and managerial performance, and the moderating effect of self-efficacy on the relationship between strategic management accounting and managerial performance (Zenita, Sari, Anugerah, ; Said, 2015). In this challenging world, managers are expected to make effective and efficient decision which improve managerial performance. In carrying out those function, the manager need information for decision-making in facing uncertainty in global market and economy, their competitor and their plan for the business sustainability. Strategic management accounting can provide those information that needed by the manager to develop and monitor business activities and strategy comprising of analysis of managerial and financial information of product market, cost structures and business performance evaluation.
A skill to utilize the information properly and making interpretation in making effective decision needs individual self-efficacy and how the task should be performed in achieve the goals. Taking this situation as important, the researcher aim is to examine the influence of information literacy and strategic management accounting on managerial performance. Other intention is to examine the mediating effect of strategic management accounting to the relation between information literacy and managerial performance. Lastly to examine the moderating effect of self-efficacy on the relation between strategic management accounting and managerial performance.
The hypothesis proposed for this study are as follows:
H1 : Information literacy affects the usage of strategic management accounting information.
H2 : Strategic management accounting affects managerial performance
H3 : Strategic management accounting mediates the relationship between information literacy and managerial performance
H4 : Self efficacy strengthen the relationship between strategic management accounting with managerial performance
This study is using questionnaires for its sample and data collections and collected from managerial rank officers in Pekan Baru, Indonesia. Indictor used to measure literacy skill are adapted from the model of Seven Pillars created by Sconull (2011) as for self-efficacy indicators used were made by Bandura (1986) that comprise of 8 set of questions. The instrument used for strategic management accounting indicators was adopted from Guilding et.al(2000) and Sari et.al(2006). Meanwhile for managerial performance is measured using eight performance measure taken from Mahoney, Jerdee and Carol (1956).
RESULTS OF THE STUDY
Results are derived from demographics details of respondents and statistics of variables, hypothesis testing and data analysis. It shows the managers have good education background where 67.3% hold undergraduate degree and 53.81% of respondents are experienced managers with more than five years working experience. From the descriptive analysis, the managers have managerial performance, but the result also shows level of strategic management accounting was medium. The analysis also shows the respondents possess high level of information literacy. All variables tested are valid and reliable. Those findings show the result of hypothesis testing for H1, H2 and H4.
Hypothesis is done by using regression analysis. H1 and H2 were tested by running simple linear regression model while H4 was tested by running regression analysis. H3 is tested using 4 outlined by Frazier, Barron, and Tix (2004). The findings show all hypothesis are accepted.
From the study, the researcher concluded that the managers that possess high level of information literacy, high level of self-efficacy and utilize strategic management accounting information in decision making process will have an enhanced managerial performance. Nevertheless, there are limitation to this study such as confine to specific profession, questionnaire that can be biased in measuring managerial performance. Th researcher was suggesting of having future research by enhance the scope of research such as adding more variables related psychological factors that may influence managerial performance.
IMPROVING EMPLOYEES ACCOUNTABILITY AND FIRM PERFORMANCE THROUGH MANAGEMENT ACCOUNTING PRACTICES
BACKGROUND OF STUDY
Business has evolved rapidly in term of its daily operation, technology, strategy and getting information that has significant impact on organization. Proactive action is being demand from the entrepreneur to ensure they run the business to becoming more cost-effective that lead to efficient of company performance. Performance has been measured to enable the corrective action been taken and certainly the manager must have more information to make effective decision-making. On that note, the aims of the study are to serve as a reference for all level of management to try and align their business to enhance their entrepreneur skills, improving the productivity of their employees and widen the knowledge in management accounting practice which may resulted in enhancement of the company performance. (AbRahman, Omar, Rashid, ; Ramli, 2016)
The research question for this study is to determine the relationship between budgetary participations, commitment and performance measures through the tools and techniques of management accounting practice in firm performance.
The researcher was using qualitative method as it has been widely accepted to get information in form of research design especially in marketing and management and prolong to accounting, finance and economics. It aims to get more an in-depth and better understanding of the responses of why they do what they do through interviews. Unfortunately, it cannot be extended to population at large, limited to theoretical and analytical including statistical and constructive. To analyze and interpreted the interviewing data, the tape interview was listened to clarify and collect key issues into summary notes. To ensure the validity of data the researcher also analyzed the data using a qualitative analysis software program called NViVO 10 where the data are compiled, reviewed and coded.
RESULTS OF THE STUDY
Based on employee’s accountability findings, it is associated with improvement on growth of firm performances process. Although the financial ranked at second position but it does influence the employee’s accountability. This is because the financial manager does not only operate financial but extended to organizing daily work, conduct market research, collect financial and non-financial data and even conduct training to employees. They are familiar with internal process and have control that been carries out in the study. Firm performance finds show that the firm has strong financial success over the past few years after adopting management accounting practice in their daily operation. The firm also adopt good practice by integrate the administrative with financial and non-financial company operation to boost firm performance. Based on interviews conducted, the finding shows numbers of management accounting practices has been adopting to meet company objectives namely decision-making process. Apart from that the company also enrich the techniques in management accounting practice with balance scorecard and total quality management as part of its cost management and managerial operation.
In this study, it can conclude that the examination findings of budgetary participation and commitment affect the management accounting practices benefit that improve employee’s accountability and firm performances.
A MANAGEMENT ACCOUNTING PERSPECTIVE ON SAFETY
BACKGROUND OF STUDY
In safety management, the information is mainly to decide where the focus actions such as safety interventions and their nature, monitor the level of safety and motivate those in a position to take necessary action. However, all management involve cost such as project cost, bidding process and related decision-making to safe management. The needs of cost-benefit evaluation of safety investment is one of the example that need information from management accounting while for non-financial information involves project evaluation, strategic planning and other company interest. The aim of the study is to chart current management accounting practices related to safety issues based on findings from relevant literature. (Tappura, Sievänen, Heikkilä, Jussila, & Nenonen, 2015)
Question research imposed on this study are:
? methods suitable for evaluating the safety investments and interventions and defining the value of safety
? the applicability of management accounting methods for safety-related decision-making and how they can be used to improve current practices further
This study is based on literature review compile through a Finnish multidisciplinary research project, Safety Value which aim to promote economic measure and indicators of safety. The literatures search was carried out through multidisciplinary databases as portals such as Elsevier Science and Compendex. The author also refers to review article, conference papers and books chosen by the researchers. Theories selected for this research are as follows:
? Performance measurement and the Balanced Scorecard approach
? Management accounting practices for measuring cost and benefits on:
• Occupational health and safety costs
• Capital budgeting techniques
• Valuation of safety
RESULTS OF THE STUDY
The result from this study shows that the literature review was not systematic but based on profound analysis of relevant Occupational Health & Safety (OHS) studies, the management accounting can be applied for safety-related decision-making. However, it was not being discuss in management accounting literature on OHS perspective. Nevertheless, the study shows the relevant perspective on the performance measurement using balance scorecard approach in measuring health and safety costs and benefits and the valuation of human life.
From this study it can concluded that the application of management accounting on perspective of safety would considering non-rational management accounting such as sensitive issue that concerning human life. Nevertheless, this study serves as an opportunity to apply management accounting that can contribute in calculating the cost and benefit of safety.
AN EXPLORATORY ANALYSIS OF MANAGEMNT ACCOUNTING PRACTICES IN THE ARAB GULF COOPERATIVE COUNTRIES
BACKGROUND OF STUDY
The Gulf Co-operation Council (GCC) countries comprise of six trading bloc countries namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The revenues are mainly from oil and natural gas. Due to the differences in company sizes, industry sectors, ownership types and legal structures, the researcher has an aim to examine on the management accounting tools application and adoption by the businesses in GCC. Apart from that this study attempt to determine the significant variances taking into the account all the differences can gathers in this study. (Mclellan & Moustafa, 2013)
The research questions are as follows:
? Which of the various management accounting practices are being used more extensively than others by businesses in the Gulf Co-operative Council area?
? Are there signi?cant differences in the use of management accounting tools among companies based on ownership type, legal structure, industry sector, and size?
Questionnaire through online survey is used in this research methodology which comprise of 49 questions concerning on demographic and the degree to which management accounting tools used by the company to collect data. It also stressed on the effect of the choice the company made in choosing management accounting tools through factor analysis.
RESULTS OF THE STUDY
From the study finds that the traditional approach still play an important role in the GCC companies such as budget planning and control rather than developing the strategic tools including the balanced scorecard and activity-based management.
From this research, it can be concluded that the application on management accounting does give positive response by the companies although it may give opposite impact on factors related to size and sector. International companies have an interest to adopt management accounting especially in budget planning and control and other tools as short-term decision making. The choice of using management accounting tools also depend on other factors that been discuss in this paper such as accountant’s knowledge, cost and benefits of the tools and technique and the management preference as well.
VIEWS ON ARTICLES
The five articles that have been summarize is concerning on the adoption of management accounting and tools related advantages in different scenarios and aspects.
The significant advantage of using direct-costing has been examined by the researcher in article one. Direct costing which refer to variable costs in producing a product enable the company to know the actual cost related to the production. Furthermore, the variable cost can be control and eventually can increase company profit. Tools in management accounting such as breakeven and margin of safety can give early awareness to the company to avoid losses in the operation. Budgeted manufacturing cost can be prepared by the company and take remedial actions for any inefficacy in the production. If the company can estimate the manufacturing cost using direct costing on a new product or process, it is a good indication of the project’s economic viability. (Anderson, 2009)
For article two and three that addressing on the improving employee accountability, self-efficacy and managerial performance through management accounting prove that it true because the manager can refer to financial and non-financial information to make decision. Apart from that the evaluation on manager performance can be made on fact and figures that derive from the management accounting information. For instance research has been done on application on activity based-costing on manufacturing company which resulted in positive impact of firm performance. (A Salem & Mazhar, 2014)
Study made in article four on a management accounting perspective on safety finds that managerial can be apply in all type of business and not limited to businesses that produce product. Even business that offering service can calculate the cost incurred in operating a business. For safety aspect, it is an opportunity by the company that have similar transaction explore the cost of health and safety that along in determining the cost benefit ratio to prepare for cost estimation.
Finally, article five does show various commitment from different aspect of companies in GCC which other countries in the world may gave adopt management accounting according to their needs and nature of the businesses. Having a high income for GCC countries, management accounting can provide the companies with more financial and non-financial information for efficient decision making and future for target profit.