An Exploratory Study on Factors Influencing the Adoption of Management Accounting Practices in Developing Countries: Evidence from Jordan
22 Pages Posted: 20 Aug 2010 Last revised: 24 Aug 2010
Date Written: August 19, 2010
The research aims to provide a view of the present role of management accounting, to identify the extent of usage of management accounting practices (MAPs), to determine the sophistication level of MAPs by employing International Federation of Accountants model (IFAC) in the Jordanian financial sector, finally to investigate the effect of the contingent variables upon both the extent of usage and the sophistication level of MAPs.
To attain these objectives, the research used a questionnaire method; 64 valid questionnaires were returned, giving a 67.3% response rate. Several statistical analyses were used to analyse the responses, namely, descriptive analysis, bivariate correlation analysis (Kendall`s tau test and Kruskal-Wallis test), and multivariate statistical tests.
The research reveals that traditional practices are still widespread and highly used, rarely using the more sophisticated or advanced practices, and that there is a diversity of practices used in the financial sector context. In addition, the research reveals that the age of the company, net sale growth, number of employees, sophistication of operations, professional certificates, life cycle stages, and business type have a significant impact on the extent of usage of MAPs. Finally, it reveals that the age of the company, sophistication of operations, attendance of training courses, professional certificates, life cycle stages, and business type are the main contingency variables that influence the sophistication level of MAPs.
The research provides a broad overview of MAPs in the Jordanian financial sector, indicates is a lack of using MAPs in the developing countries. In addition, the research informs practitioners of the main variables that influence the usage and sophistication level of MAPs and of those variables that need to be taken into account when planning the adoption or development of management accounting systems.
Keywords: MAPs, IFAC model, contingency theory, Developing countries, Jordan
JEL Classification: M41
Suggested Citation: Suggested Citation