12612-44727-1-PB.pdf - http/afr.sciedupress.com Accounting and Finance Research Vol 7 No 1 2018 Adoption Importance and Barriers to the Implementation

12612-44727-1-PB.pdf - http/afr.sciedupress.com Accounting...

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Accounting and Finance Research Vol. 7, No. 1; 2018 Published by Sciedu Press 192 ISSN 1927-5986 E-ISSN 1927-5994 Adoption, Importance and Barriers to the Implementation of Contemporary Management Accounting Practices: Evidence from Egypt Amani Hussein 1 1 Business Department, The British University in Egypt, Cairo, Egypt Correspondence: Amani Hussein, Business Department, The British University in Egypt, Cairo, Egypt Received: November 27, 2017 Accepted: December 15, 2017 Online Published: December 19, 2017 doi:10.5430/afr.v7n1p192 URL: Abstract In present times, complexity in the business environment, and advanced technology has intensified the challenges for more management accounting information to meet global competition. Therefore, contemporary management accounting practices (CMAPs), which focus on financial and non-financial information, have emerged to support managers’ decision -making processes. This research is aimed at examining the adoption, importance and barriers to the implementation of contemporary management accounting practices. To achieve its objectives, the research conducted a survey and collected data on forty MAPs. The methodology of the study relied on factor analysis to identify and group different variables into the main factors that contribute to MAPs. In terms of MAPs adoption, the results indicated 9 factors: fundamental traditional management accounting practices (TMAPs); control; world class manufacture (WCM); performance evaluation non-financial; budgeting for planning cash flows; contemporary decision support; traditional decision support; planning and capital budget practice. In terms of importance there are 10 factors; benchmarking practices; costing and decision support; fundamental TMAPs; traditional performance evaluation; control; contemporary performance evaluation; budget for planning day to day; WCM MRP practice; product life cycle practice and performance evaluation customer satisfaction. The main conclusion was that the relative adoption of TMAPs is higher than CMAPs. However, Egyptian companies are realizing the importance of large number of CMAPs. Moreover, the research revealed that the key barriers limiting the implementation of CMAPs were the length of time it took to change the societal values and practices, the high degree of uncertainty avoidance and the high cost implementing these advanced practices. Keywords: Contemporary management accounting practices, Performance evaluation non-financial, Benchmarking practices, World - class manufacture 1. Introduction In the contemporary world, global competition, scarce resources, change and complexity in the business environment, and advanced technology have intensified the challenges for more objective and detailed management accounting information. Horngren, Datar, and Foster (2006: page 2) refer to management accounting as the process that measures, analyses and reports financial and non-financial information which helps managers make decisions to fulfill the goals of an organization.
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