Environmental Factors Giving Rise to Variations in National Management Accounting Practice

Abstract

Comparative national management accounting is the least developed aspect in the field of international accounting. Only during the second half of the 1990’s some comparisons of national management accounting practice have appeared published but only at the regional level. In this paper a range of factors that give rise to variations in national management accounting practice are postulated. We support this list with examples from a range of analyses of national management accounting practices, drawing particularly on the work of Lizcano (1996) and Bhimani (1996). Finally, twelve key factors are identified as influencing an individual country’s approach to management accounting.

Introduction

Comparative national management accounting is, we believe, the least developed aspect in the field of international accounting. Only during the second half of the 1990’s have we seen the emergence of published comparisons of national management accounting practice at the regional level; we still await such comparisons on a comprehensive international basis. In this paper we postulate a range of factors that give rise to variations in national management accounting practice. We support this list with examples from a range of analyses of national management accounting practices, drawing particularly on the work of Lizcano (1996) and Bhimani (1996).

The international accounting discipline

International accounting has a strong claim to be a mature academic discipline, as evidenced by:

a) A growing number of journals devoted to the domain including International Journal of Accounting, European Accounting Review, Advances in International Accounting, Journal of International Accounting, Auditing and Taxation, International Journal of Auditing, and Research in Accounting in Emerging Economies.

b) A range of activities in the academic community including both postgraduate and undergraduate courses in the discipline, the establishment of chairs in international accounting, and formation of special interest groups on the field by bodies such as the American Accounting Association.(AAA), the British Accounting Association(BAA), and the Accounting Association of Australia and New Zealand (AAANZ).

Table 1 offers a breakdown of international accounting into four elements:

a) Transnational financial reporting, with a focus on the financial reporting needs of the multi national enterprise (MNE)

b) Comparative national financial accounting practice.

c) Management accounting issues in the multinational enterprise. For each of the above several examples of areas of the discipline are shown. In each case it would be easy to add to the list, and to find on extensive related literature.

d) Finally we identify a fourth element, comparative national management accounting. Here we find individual country descriptions as the only example of work in this area. It is striking that, in stark contrast to the field of comparative financial accounting practice, we find no theories developed as to the nature of, of reasons for, differences in national management accounting styles.

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