THE EFFECT OF CONTEXTUAL VARIABLES ON MANAGEMENT ACCOUNTING SYSTEM

THE EFFECT OF CONTEXTUAL VARIABLES ON MANAGEMENT ACCOUNTING SYSTEM

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19 SIMPOSIUM NASIONAL AKUNTANSI VI Surabaya, 16 – 17 Oktober 2003 THE EFFECT OF CONTEXTUAL VARIABLES ON MANAGEMENT ACCOUNTING SYSTEM CHARACTERISTICS AND MANAGERIAL PERFORMANCE MUSLICHAH STIE MalangKucecwara ABSTRACT A major strand of management accounting research has been the application of contingency theory to the study of management accounting systems design and performance. In particular, these studies have focused on the relationship between aspects of contextual variables on MAS characteristics and performance. This study examines (1) The impact of information technology on management accounting system characteristics and decentralization (2) the role of decentralization on the relationship between contextual variables (information technology, strategy, environmental uncertainty, organizational interdependence) and management accounting system characteristics (3) the role of management accounting system characteristics on the relationship between contextual variables (information technology, strategy, environmental uncertainty, organizational interdependence and decentralization) and managerial performace. Management accounting system characteristics was defined on the extent to which managers use broad scope, timeliness, aggregation and integration MAS information for managerial decision making. Hypotheses were generated for both direct and indirect effects of contextual variables. The responses of 110 managers, drawn from manufacturing companies in East Java, were analyzed by using a structural equation modelling (SEM). The results indicate that (1) The direct effect of information technology was associated with broad scope, timely, aggregated and integrated information; perceived environmental uncertainty with broad scope, timely and integrated information. But, environmental uncertainty and strategy do not have direct effet on MAS characteristics(2) decentralization acts as a mediator in the relationship between information technology, organizational interdependence and management accounting system characteristics . However, the results also indicate that strategy and environmental uncertainty do not act as a mediator in the relationship. (3) management accounting system characteristics act as a mediator in the relationship between information technology, environmental uncertainty, organizational interdependence and managerial performance. But, the results suggest that strategy does not act as a mediator in the relationship. Keywords: information technology, strategy, environmental uncertainty, interdependence, decentralization, management accounting system characteristics, scope, timeliness, aggregation, integration, managerial performance 1. Introduction The use of contingency theory to the analysis and design of management accounting systems (MAS) has generated a considerable amount of interest. The contingency approach is based on the premise that there is no universally appropriate MAS which apllies equally to all organisations to all
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THE EFFECT OF CONTEXTUAL VARIABLES ON MANAGEMENT ACCOUNTING SYSTEM

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