The effectiveness of management accounting systems

Abstract

PurposeThis study aims to examine the availability and effectiveness of management accounting systems (MAS) for functional managers located in an African developing country (Mauritius).Design/methodology/approachBased on the MAS dimensions defined by Chenhall and Morris, a contingency‐based “intervening” model is proposed whereby available MAS play a significant intervening role between task uncertainty (TU) and decentralization (DEC) on managerial performance. Using survey data from production and marketing managers in manufacturing companies and regression‐path analysis, the MAS dimensions (scope, aggregation, integration, and timeliness) are collectively analyzed in relation to the situational variables and managerial performance.FindingsA significant positive relationship was observed between all MAS characteristics and managerial performance. However, only DEC proved to be a contextual variable of interest, in that DEC policies appear effective only via the availability of broader scope, timely, highly aggregated and highly integrated MAS. The absence of findings for TU is suggestive of an “uncertainty paradox,” previously referred to in the literature, and is indicative of the need to re‐consider TU as an element of “technology” rather than “uncertainty.”Research limitations/implicationsThis study focused only on manufacturing companies and its findings may not be applicable to other organizational contexts, e.g. service enterprises.Originality/valueThis study focuses on actual availability of MAS as perceived by users in manufacturing companies rather than on studies which rely on accountants' perceptions, on hypothetical “usefulness” perceptions of MAS or on the sole use of the scope dimension.