The Integration of Financial Accounting, Management Accounting and Cash Flow Accounting: The User's Opinion

Posted: 26 Dec 1999

See all articles by Philippe Touron

Philippe Touron

Université Paris Panthéon-Sorbonne

Hervé Stolowy

HEC Paris - Accounting and Management Control Department


Integrating financial accounting and management accounting is already a well-established practice in large businesses, which in France took up this type of approach in the mid-1980s. In small and medium-sized companies, however, separation is generally the rule. Priority is given to financial accounting, which is considered the "official" accounting system; management accounting is kept at the same time, integrated to a greater or lesser extent with financial accounting; and finally, a cash flow analysis is obtained by adjustment of the trial balances, or from changes in balance sheets. It takes the form of a statement of cash flows, and is often disconnected from the accounting system.

This separation of management tools is harmful to the life of the company, having several possible undesirable effects: for example, lack of interest in the reports generated by the financial accounting system, establishment by the management of reports based on non-accounting data, or the conviction that financial accounting lacks flexibility and is more relevant to the past than the present.

However, with the recent development of "off the shelf" software packages, companies which formerly had only a traditional accounting system, for reasons of cost or lack of resources, have now decided to install software which integrates financial accounting, management accounting and cash flow accounting. This paper concerns only integrated accounting which is a specific form of accounting system integration being based on triple entry accounting.

The theoretical benefit of such an approach for small and medium-sized companies has been thoroughly described in French accounting literature but, to the best of our knowledge, no empirical validation of its actual usefulness has been carried out. The purpose of this paper is to present the results of a survey of companies using the integrated accounting system. The users' opinion, as collected in the results of our survey, shows that integrated accounting has a dual impact: in terms of information (which becomes more reliable, because of unity of the data source and availability of this source, timely and relevant) and in terms of changes in the accounting business process.

JEL Classification: M41, M46

Suggested Citation

Touron, Philippe and Stolowy, Hervé, The Integration of Financial Accounting, Management Accounting and Cash Flow Accounting: The User's Opinion. Available at SSRN:

Philippe Touron

Université Paris Panthéon-Sorbonne ( email )

17 rue de la Sorbonne
Paris, 75005

Hervé Stolowy (Contact Author)

HEC Paris - Accounting and Management Control Department ( email )

Jouy-en-Josas Cedex
+33 1 39 67 94 42 (Phone)
+33 1 39 67 70 86 (Fax)


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