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The rapid advancement of enormously expanding information technologies and vigorous global competition have caused the irrelevance of conventional management accounting systems (MAS) in providing useful information to assist management’s decision making, planning and control in both service and manufacturing organizations. The shortcomings of traditional MAS, in terms of validity, accuracy, completeness, consistency, understanding and relevance, increase the need for modern MAS, like activity‐based costing (ABC). In growing inadequacies of traditional MAS, ABC can be used as a tool for planning, control and decision making in service management. ABC traces costs to activities rather than products, which provides a more accurate and correct picture of the cost consumption. Furthermore, ABC uses a larger number of cost drivers instead of one or two volume‐based cost drivers in a traditional cost management. However, activity based management (ABM) helps management to make decisions and formulate plans to provide new services, improve existing services and measure performances in order to achieve overall competitive strategies advantages of organizations. Thus, this study attempts to demonstrate the shortcomings of traditional MAS, and the usefulness of ABC and ABM in making decisions on product profitability and performance measurement in services with a particular reference to the financial industry.

The philosophy of Grameen (rural) banking system was invented by a maverick economist (Dr Yunus) in a tiny village of Bangladesh in 1976, with the aim to eliminate poverty and improve the socio‐economic condition of the rural poor. The bank provides loans to poor people who are unable to provide collateral and indoctrinated in Grameen social values, known as the “sixteen decisions”. Grameen borrowers also vow to observe the bank’s “four basic principles”, and they are the owners (92 per cent) of the bank. Grameen bank began its operations by giving a small amount of money ($30) to 40 people. Today, it employs 14,000 staff and has disbursed more than $1 billion dollars of loan among two million rural people in Bangladesh of which 95 per cent are women, and the rate of its loan repayment is 98 per cent. The Grameen is functioning not only in Bangladesh but also in 50 countries across Asia, Europe, Africa, Oceania, and in the USA. Moving onto the implementation of Grameen‐type micro‐credit systems in Europe, or elsewhere, the differences in socio‐culture, economics and politics (between Bangladesh and the region concerned) should be considered. Thus, this paper is an attempt to investigate the prospects of the implementation of Grameen/micro‐credit banking system in European socio‐economic and cultural contexts.

The importance of the role of management accounting (MA) in measuring emerging non‐financial performance (NFP) is increasing, especially in the service sector. However, there are a number of studies concerning NFP measures, but comparatively little is known about non‐financial MA measures in services and almost nothing in banks/financial institutions (BFI). Taking into consideration the need for studying MA practices in measuring emerging NFP in the service industry, an attempt has been made in this paper to investigate the practice of MA in NFP measurement in Finnish BFI. Several factors have been identified, in the context of “New Institutional Sociology” theory that influence NFP measures, of which economic impact is the most influential, followed, subsequently by coercive, normative and mimetic pressures. Accordingly, the empirical findings of this research are evaluated, and consequently, it has been used to modify the theory for further research that fits with the dynamic nature of NFP in the financial industry.

This article has been withdrawn as it was published elsewhere and accidentally duplicated. The original article can be seen here: 10.1108/03074350310768337. When citing the article, please cite: Md. Mostaque Hussain, (2003), “The impact of economic condition on management accounting performance measures: experience with banks”, Managerial Finance, Vol. 29 Iss: 7, pp. 43 - 61.

Management Accounting (MA) practice is one strand in the complex weave that makes up the social fabric. Social patterns of interaction and societal presuppositions that impel people to act in certain ways are all factors that potentially impinge on the role and nature of MA. Some researchers recognise that normative pressures, as they are associated with social obligations and appropriate social conduct in human behaviours, are significant as far as MA practices are concerned. Thus, MA practices should be understood along with the effects of organisational, vis‐à‐vis management’s, strategic orientation (as a part of normative pressures) in organisations. This empirical study investigates the effect of organisational strategic orientation on performance, especially Non‐financial Performance (NFP) measurement in different types and kinds of financial institutions in Finland, Sweden and Japan. The study reveals that organisational strategic orientation highly influences NFP measurement in financial institutions, though the effects of this factor are different in different financial institutions. After providing the empirical result, some research directions are given for further research.

Much has been written about the need and importance of Non‐financial Performance/s (NFP) measures in modern technologically advanced competitive business organizations. But there is not an acceptable definition available on NFP, though recent corporate accounting scandals have been created greater need of ethical, moral viz a viz NFP measurement. However, all non‐monetary qualitative pieces of information are not same in considering an organization's strategy, objective, and even for the differences of organizational characteristics/particularities. Thus, this study attempts to identify the nature of NFP with references to financial institutions in Finland and Japan. According to the empirical evidence, this study classifies three different natures of NFP. The first type of NFP is the profit driven one, and the second one is for long‐term competitive advantage of business. The third type of NFP is independent in nature, i.e. they are not linked with the profitability of organization. This study also demonstrates the relative link of NFP with financial performances, and the weight and importance that management is giving to improve and measure NFP in the studied organizations. At the end some directions for further research are given in light of the recent corporate accounting scandals in the USA.

The impetus for the development of audit committees in 1970's was the unexpected corporate failures that resulted from corporate misconduct. The situation seems to have hardly changed almost 30 years on. As corporate failures become more spectacular due to big‐names failures and the ever‐developing means of communications that brought such failures to the forefront of the news and almost into every household, more attention is drawn nowadays to the role of audit committees in preventing such failures. With audit committees now the norm in developed countries and increasing number of emerging economies, the role of audit committees has developed from being seen as means of strengthening the external financial reporting process to being seen as means of detecting and preventing corporate misconduct and failures. Thus this study investigates the international developments of audit committees and their role in the issues concerned. It also evaluates the advantages and disadvantages of audit committees, as well as providing possible suggestion to the crucial role that audit committees could play in preventing and detecting corporate misconduct and failures.

Traditional management accounting (MA) has certain limitations, and this highlights the need to examine the nature of cost‐management practices. The implications of non‐financial success factors are emerging in highly competitive financial industries. These receive more emphasis in service organisations that achieve the benefits of performance measurement. Although much is written on the need for accurate performance measures, comparatively little is known about the role of MA in measuring non‐financial performance (NFP). With a view to the implications of MA systems and the measurement of the performance of critical success factors in financial industries, this paper studies the role of MA in NFP in Japanese financial institutions.

A number of Management Accounting (MA) researches have demonstrated the shortcomings of traditional accounting‐based performance measures for today’s uncertain Economic Conditions (EC) in technologically advancement competitive environments. The MA literature suggests the impact of economic pressures on MA practices, though there are different notions regarding the impact of EC on Non‐financial Performance Measurement (NFPM). Some researchers argue that management needs an interactive information system in more volatile and uncertain EC, and accordingly, the mode of the use of financial performance measures is greater in uncertain EC. However, some welldocumented predictions about the relationship of the external environmental, viz a viz uncertain economic environments, with the need of managers’ financial and nonfinancial information. Taking these aspects into account, it is important to consider the effect of EC on MA performance measures and their degree of responsiveness and adaptability to particular circumstances. Thus, this research made an attempt to study the impinge of EC on NFPM in Banks/Financial Institutions (BFI). The multiple case study approach, especially the study of different kinds of BFI in different macro environments, provides an opportunity to examine the effect of NFPM in different environments. The cross‐country studies help to demonstrate the rationale for the impact of EC on NFPM in three countries (Finland, Sweden and Japan). Results of this study anticipate that the uncertainty of EC increase pressures on management to improve and measure financial performance in order to survive in the hostile EC. To the contrary, managers would improve as well as measure non‐financial performance in the organizations.

In recent years, there has been a growing tendency to establish closer ties among the Gulf Cooperation Council (GCC) countries (Bahrain, Saudi Arabia, Oman, Qatar, and United Arab Emirates) in economies and financial institutions. As a result, there is an increasing need for the harmonization of accounting regulations in order to improve cooperation and enhance the efficiency of the financial institutions among GCC countries. This study is an investigation of the accounting standards followed by the financial institutions in five GCC countries with some policy prescriptions for harmonization of the accounting regulations in GCC countries. This paper deals with accounting policies and practices, including loans and provisions, assets, investments, taxation, liabilities, foreign exchange, revenue recognization, and consolidation of GCC countries’ banking and other financial institutions.