Mayada Abd El-Aziz Youssef, Esam E. Moustafa and Habib Mahama
This study aims to investigate the mediating role of management control system (MCS) characteristics in the relationship between state type, reflected through societal…
Abstract
Purpose
This study aims to investigate the mediating role of management control system (MCS) characteristics in the relationship between state type, reflected through societal institutions (SIs), and two sets of management accounting techniques (MATs), namely, performance measurement techniques (PMTs) and cost measurement techniques (CMTs).
Design/methodology/approach
Structural equation modeling was used to analyze data from a cross-sectional survey of 136 firms in the United Arab Emirates (UAE).
Findings
The findings show a direct positive impact of state-type construct on MCS characteristics, and that MCS characteristics partially mediate the reported significant relationships between state type and the use of PMTs. While the findings show a similar positive relationship between state type and CMTs, MCS characteristics do not mediate this relationship.
Research limitations/implications
Although these results are affected by limitations associated with the survey method used, they are useful in explaining the necessary conditions supporting the use of MATs in general and performance measurement techniques in particular.
Practical implications
The study uses a cross-section of companies in the UAE, an attractive global investment destination, as its sample. The results can help investors better understand the choice of MATs in the UAE and its relation to MCS characteristics.
Originality/value
This study contributes to management accounting literature by determining the mediating role of MCS characteristics on the relationship between state type and the choice of two sets of MATs, whereas existing literature assumes a direct relation between the two.
Details
Keywords
John Daniel Mclellan and Esam Moustafa
The aim of this research project is to examine the adoption rate of management accounting tools by businesses in the Gulf Co‐operative Council (GCC) countries and attempts to…
Abstract
Purpose
The aim of this research project is to examine the adoption rate of management accounting tools by businesses in the Gulf Co‐operative Council (GCC) countries and attempts to determine if significant variances in the use of management accounting tools by GCC businesses are contingent on a companies' ownership, legal structure, size or industry sector. The study covers a broad range of businesses, from many different business sectors in six different Arab countries.
Design/methodology/approach
An online survey on the adoption rate of 41 Management Accounting Tools was used to collect data. The Institute of Management Accountants invited 453 CMA's in the Gulf region to participate in the Survey of Management Accounting Practices in the GCC area. Factor analysis was employed to test the effects of company characteristics on the choice of management accounting tools.
Findings
The study finds that companies in the GCC rely on the more traditional management accounting practices such as budgeting rather than the more recently developed strategically focused tools such as activity based management and the use of the balanced scorecard. The research also shows that company characteristics play a significant role in the use of management accounting tools by businesses. Overall, international ownership and incorporation tend to increase the use of many management accounting practices.
Research limitations/implications
Results should be generalized cautiously due to the small number of responding companies. The use of individual tools may not be completely explained by the chosen independent variables; other factors such as management's preference and/or the cost and benefit of the tool may affect choice.
Originality/value
Management accounting practices of businesses in the GCC have never been studied before. This study updates the literature on the management accounting tools by businesses.