Governance at source through management accounting benchmarking: A way forward for the public sector
DOI:
https://doi.org/10.61841/5aaxtn21Keywords:
Management accounting, Benchmarking, Governance at source, Public sector, MalaysiaAbstract
Benchmarking of management accounting involves the search for best practices amongst players in the industry and is considered critically important for organisational survival as it promotes the application of best management tools and techniques to achieve superior value creation and business performance. Despite the allegations that management accounting has lost its relevance for not providing adequate support to business managers within the competitive global economy, tools and techniques such as balanced scorecard, key performance indicators and economic value added have been applied rigorously. In view of this, the National Award for Management Accounting (NAfMA) was pioneered in Malaysia which aimed towards “regaining management accounting prominence” where the award’s focuses were on the management accounting excellence, management accounting best practices and management accounting best practice solutions. In essence, management accounting can be considered as “governance at source” where management accountants provide relevant financial and non-financial information to the management teams to facilitate them to make the best decisions for their respective organisations. Moving forward, we posit that a special management accounting award for the public sector should be developed and promoted in which new elements such as leadership, management accounting information, resource management, community and customer focus, stakeholder partnership management, performance management and service delivery outcomes are embedded in the new suggested framework. This paper proposes the award criteria that propagate accountability, transparency, efficiency and effectiveness for sustainable value creation amongst the Malaysian public sector entities.
Downloads
References
Abdul Rahman, I. K., Morshidi, I., & Omar, N. (2002). A study on product cost measurement and the role of product cost information in pricing decision among small and medium industries in Malaysia. Proceedings of the 3rd Annual Conference of the Asian Academic Accounting Association, Nagoya University, Japan,, 71-107.
Abdul Rahman, I. K., Omar, N., & Abidin, Z. Z. (2003), The Application of Management Accounting Techniques in Malaysian Companies: An Industrial Survey, National Accounting Research Journal 1(1).
Abu-Jarad, Ismael Younis, Nor’Aini Yusof, Davoud Nikbin (2010), “A Review
Paper on Organizational Culture and Organizational Performance”, International Journal of Business and Social Science, 1(3), pp. 26-46
Angelakis, G., Theriou, N., & Floropoulos, I. (2010). Adoption and bene fits of management accounting practices: Evidence from Greece and Finland. Advances in Accounting, incorporating Advances in International Accounting(26), 87 –96.
Anh, D. N. P., Nguyen, D. T., & Mia, L. (2011). Western management accounting practices in Vietnamese enterprises: Adoption and perceived benefits. Pacific Accounting Review, 23(2), 142-164.
Arthur, W.B., 1994. Increasing Returns and Path-Dependence in the Economy. University of Michigan Press, Ann Arbor.
Azhar, Z., & Rahman, I. K. (2008). Enhancing Management Accounting Practices in Malaysian Service Organisations: What the Present Demands of the Future? Accountants Today, 30-33.
Bahaman, M. N. H. & Abdul Rahman, I. K., (2014), Role of Management Accounting Practice in Creating Values: A Case Study of Asia Highway. Asia-Pacific Management Accounting Journal, 9(1).
Bakar, N. B., Saleh, Z., & Mohamad, M. H. (2011). Enhancing Malaysian Public Sector Transparency and Accountability: Lessons and Issues. European Journal of Economics, Finance and Administrative Sciences, 133-145.
Bank Negara Malaysia. (2018). A Critical Assessment of Direct Investments Abroad (DIA) and the Changing Nature of Foreign Direct Investments (FDI). Kuala Lumpur: Bank Negara Malaysia.
Bonnafous-Boucher, M., & Porcher, S. (2010). Towards a stakeholder society: Stakeholder theory vs therory of civil society. European Management Review (7), 13.
Brewer, P. C. (2008). Redefining management accounting. Strategic Finance-Montvale-, 89(9), 26.
Chanegrih, T. Applying a typology of management accounting change: A research note.
Management Accounting Research, 19(3), 278-285.
Chenhall, R. H., & Langfield-Smith, K. (1998). Adoption and benefits of management accounting practices: an Australian study. Management Accounting Research, 9(1), 1- 19.
Clarke, P. (1997). Management accounting practices in large Irish manufacturing firms. IBAR Irish Business Administration Research, 18.
Clarke, P. (2004). Footprints in the sand: Exploring the evolution of management accounting practices in Ireland. Irish Accounting Review, 11(1), 1-18.
Chee W. Chow, Kamal M. Haddad & Gangaram Singh (2007), An Articles in "Top" management Journals necessarily of higher quality?, Journal of Management Inquiry, 16(4) pp. 319-331.
Daft, R.L. (2000), Organization Theory and Design, 7th ed., South‐Western College Publishing, Thomson Learning, Cincinnati, OH.
Davies, A.J. and Kochhar, A.K. (2002), “Manufacturing best practice and performance
studies: a critique”, International Journal of Operations & Production Management, 22(3), pp. 289‐305.
Deal, T.E. and Kennedy, A.A. (1982), Corporate Cultures. The Rites and Rituals of Corporate Life,Addison‐Wesley, Reading, MA.
Deou, S.S. (1998), Success Factors for Managing Benchmarking Process, University Sains Malaysia, Penang.
El‐Ebaishi, M., Karbhari, Y. and Naser, K. (2003), “Empirical evidence on the use of
management accounting techniques in a sample of Saudi manufacturing companies”, International Journal of Commerce & Management, Vol. 13 No. 2, pp. 74‐101
Elmuti, D., & Kathawala, Y. (1997). An overview of benchmarking process: a tool for continuous improvement and competitive advantage. Benchmarking for Quality Management & Technology, 229-243.
Fisher, J. G. (1998). Contingency theory, management control systems and firm outcomes: past results and future directions. Behavioral Research in Accounting, 10, 47-64.
Freytag, P.V. and Hollensen, S. (2001),"The process of benchmarking, benchlearning and bench‐action", The TQM Magazine, 13(1), pp. 25‐33.
Gonchanruk and Monat, (2009), "A synergistic performance management model conjoining benchmarking and motivation", Benchmarking: An International Journal, Vol. 16 No. 6pp. 767-784
Han. J.C. & Wild, J. J. (1991), Stock price behavior associated with managers' earnings and revenue forecasts. Journal of Accounting Research, 79-95.
Hariman, J. (1990). Influencing rather than informing: Japanese management accounting.
Management Accounting, 44-6.
Harung and Harung, (1995), "Enhancing and Organizational Performance by Strengthening diversity and unity", The Learning Organization, Vol. 2 No. 3 pp. 9-21
van Helden, G. J. v., Aardema, H., ter Bogt, H. J., & Groot, T. L. C. M. (2010). Knowledge creation for practice in public sector management accounting by consultants and academics: Preliminary findings and directions for future research. Management Accounting Research, 12.
Hilton, A. S. & O'brien, P. C. (2009). Inco Ltd.: Market Value, fair value and management discretion. Journal of Accounting Research, 47(1), 179-211.
Hiromoto, T. (1988), “Another hidden edge: Japanese management accounting”, Harvard Business Review, July‐August, pp. 22‐6.Hong, H. K. (1991). Management Accounting in Public Sector. International Journal of Public Sector Management, 4(3), 13.
Hyvonen, J. (2005). Adoption and benefits of management accounting systems: evidence from Finland and Australia. Advances in International Accounting, 18, 97.
International Federation of Accountants (IFAC), (1998), International Management Accounting Practice Statement: Management Accounting Concepts, New York, USA.
Isa, Saleh and Sapiei, (2007), "Financial and Management Accounting Practices Among Small and Medium Enterprises in Malaysia", International Management Accounting Conference IV, 15-17 August 2007
Prime Minister’s Department (2019). National Anti-Corruption Plan: 2019-2023. National Centre for Governance, Integrity and Anti-Corruption (GIACC), Putrajaya, Malaysia.
Radin, J. T. (1999). Stakeholder Theory and The Law. University of Virginia.
Jayamaha, N. P., Grigg, N. P., & Mann, R. S. (2011). Empirical Analysis of the Baldrige Criteria as both an organisational performance measure and a theoretical model. Measuring Business Excellence, 15(1), 14.
Johnson,C.T. and Kaplan, R.S. (1987), "Relevance Lost: The Rise and Fall of Management Accounting, Harvard Business School Press (Boston, Mass).
Joshi, P. L. (2001). The international diffusion of new management accounting practices: the case of India. Journal of International Accounting, Auditing and Taxation, 10(1), 85- 109.
Jusoh and Parnell, (2008), "Competitive Strategy and Performance Measurement in the Malaysian Context", Management Decision, Vol. 46 No. 1 pp. 5-31
Jusoh et. al. (2008), "The Performance Consequence of Multiple Performance Measures Usage: Evidence from the Malaysian Manufacturers", International Journal of Productivity and Performance Management, Vol. 57 No. 2 pp. 119-136
Kaplan, R. S., and A. A. Atkinson. 1998. Advanced Management Accounting. Third edition.
Upper Saddle River, NJ: Prentice Hall
Karlof, B., & Ostblom, S. (1993). Benchmarking: A signpost excellence in quality and productivity, West Sussex, UK: Wiley.
Kellet, B.M. & Sweeting, R.C.. Accounting innovations and adaptations: A U.K. case Management Accounting Research, 2 (1991), pp. 15–26.
Kurunmaki, Lapsley, I., & Miller, P. B. (2011). Guest editorial:Accounting within and beyond the state Management Accounting Research, 22, 5.
Kyro (2003),"Revising the Concepts and Forms of Benchmarking", Benchmarking: An International Journal, Vol. 10 No. 3 pp. 210-225
Lim, B. (1995)," Examining the Organizational Culture and Organizational Performance Link", Leadership and Organization Development Journal, Vol. 16 No. 5 pp. 16-21
Md Deros et. al. (2009)," A Survey on Benchmarking Understanding and Knowledge among Malaysian Automotive Components Manufacturing SMEs", European Journal of Scientific Research, Vol. 33 No. 3 pp.385-397
McLellan, J., & Moustafa, E. (2011). Management Accounting Practices in the Gulf Cooperative Countries. International Journal of Business, Accounting, and Finance, 5(1), 129-142.
MIA. (2011). MIA-PAIB-Management Accounting Award. Retrieved 4 April 2011 Morgan, M. J., and Werakoon, P. S. (1989). Japanese management accounting: its
contribution to the Japanese economic miracle. Management Accounting, 67(6), 40-3.
National Award for Management Accounting (NAfMA). (2004) Case Studies of Winners, NAfMA Organising Committee 2005, Kuala Lumpur.
National Award for Management Accounting (NAfMA). (2005) Case Studies of Winners, NAfMA Organising Committee 13 December 2007, Kuala Lumpur.
National Award for Management Accounting (NAfMA). (2006) Case Studies of Winners, NAfMA Organising Committee, 13 December 2007, Kuala Lumpur.
National Award for Management Accounting (NAfMA). (2007) Case Studies of Winners, NAfMA Organising Committee, 3 December 2008, Kuala Lumpur.
National Award for Management Accounting (NAfMA). (2008) Case Studies of Winners, NAfMA Organising Committee 8 December 2009, Kuala Lumpur.
Nishimura, A. (2002). Management accounting practices of Japanese affiliates in Singapore, Thailand and Malaysia. Paper presented at the The Asian Management Accounting Forum, Fukuoka.
Nishimura,A. (2002), Asian Economic Growth and Management Accounting, Malaysian Accounting Review, Vol. 1 No. 1, September, pp. 87-101.
Nishimura, A. (2005) The Development of Management Accounting and the Asian Position. Nishimura,A. and Willett,R. (2005) "Management Accounting in Asia" Thomson, Malaysia.
Nor-Aziah, A. K., & Scapens, R. W. (2007). Corporatisation and accounting change: The role of accounting and accountants in a Malaysian public utility. Management Accounting Research, 39.
Norhayati and Siti Nabila, (2009),"A Case Study of the Performance Management System in a Malaysian Government Linked Company", Journal of Accounting and Organizational Change, Vol. 5 No. 2 pp. 243-276
O'Connor, N. G., Chow, C. W., & Wu, A. (2004). The adoption of “Western” management accounting/controls in China's state-owned enterprises during economic transition. Accounting, organizations and society, 29(3), 349-375.
Omar, N., Abd Rahman, I. K., & Sulaiman, S. (2004). Management accounting in Malaysia– has relevance been lost? Accountants Today, November, 26-28.
Omar, N., Abdul Rahman, I. K., Sulaiman, S., (….)," Current Management Accounting Practices in Malaysian's Manufacturing Companies".
Parker, S. K. 2000,"From passive to proactive motivation: The importance of flexible role orientations and role breadth self-efficacy", Applied Psychology: An International Review, 49, pp. 447– 469.
PEMANDU. (2011). PEMANDU - Government Transformation Programme(GTP).
Retrieved 23rd March 2011
Perker,L (2002), "Advance abd Be Recognized, Financial Management", April, pp 32-33.
Peters, T.J. and Waterman, R.H. (1982), In Search of Excellence, Harper & Row, New York, NY.
Prado, J. C. P. (2001). Benchmarking for the development of quality assurance systems.
Benchmarking: An international Journal, 8(1), 62-69.
Qi, G. & Yingbing, J. (2002). Accounting Information Complexity and Financial Valuation Adjustment (J). Accounting Research, 6, 003.
R.Cooper, D., & S.Schindler, P. (2011). Business Research Methods (Eleventh Edition ed.).
New York: McGraw-Hill.
Rasuah, ketirisan jejas pendapatan, ekonomi negara- Najib. (2011). Utusan Malaysia.
Rosenberg, D., Tomkins, C., & Day, P. (1982). A work role perspective of accountants in local government service departments. Accounting, Organizations and Society, 7(2), 15.
Salaheldin, S. I. (2005). JIT implementation in Egyptian manufacturing firms: some empirical evidence. International Journal of Operations & Production Management, 3(25), 17.
Saman, A.L. (2000), “Benchmarking experiences in Malaysia”, Report on the APO Symposium on Productivity Measurement in the Service Sector, Kuala Lumpur.
Sharma, R. (2004). From relevance lost to relevance regained: Management practice in the New Millennium.
Schneier, C. E., Shaw, D. G., & Beatty, R. W. (1991). Performance measurement and management: A tool for strategy execution . Human Resource Management, 279-301.
Siegel's, G. (2000), WSkills Needed for Entry-Level Management Accounting Positions What do management accountants look for in recruits for entry-leve; positions?. Strategic Finance
Smith, M., Abdullah, Z., & Razak, R. A. (2008). The diffusion of technological and management accounting innovation: Malaysian evidence. Asian Review of Accounting, 16(3), 197-218.
Sulaiman, S., Omar, N., & Rahman, I. K. A. (2005). Management Accounting Award as a value creation tool: Malaysian scenario. Malaysian Accounting Review, 4(1), 14.
Sulaiman, S., Normah O., & Ibrahim Kamal, I. K., (2005). Management Accounting Award as a value creation tool: Malaysian Scenario. Malaysian Accounting Review, Vol 4 No. 1 pp. 1-19
Sohail and Teo, (2003),"TQM Practices and Organizational Performances of SMEs in Malaysia", Benchmarking: An International Journal, Vol. 10 No. 1 pp.37-53
Spendolini, M. J. (1992). The Benchmarking Book. New York: American Management Association.
Talha, M., Raja, J. B., & A.Seetharaman. (2010). A new look at management accounting. Journal of Applied Business Research, 26(4), 14.
Tuanmat, T. Z., & Smith, M. (2011). Changes in management accounting practices in Malaysia. Asian Review of Accounting, 19(3), 221-242
Uyar, A. (2010). Cost and Management Accounting Practices: A survey of manufacturing companies. Eurasian Journal of Business and Economics, 3(6), 113-125.
W.Hilton, R. (2009). Managerial Accounting: Creating Value in a Dynamic Business Environment. New York: McGraw-Hill.
Waal (2010), "Performance-driven Behavior as the key to Improved Organizational Performance", Measuring Business Excellence, Vol. 14 No. 1 pp.79-95
Wal, Z. v. d. (2009). Public value privatised? The need for a continuous emphasis on how to actualize the public interest. Public Administration Review, 69(1), 2.
Watson, G. H. (1993). Strategic benchmarking: How to rate your company’s performance against the world’s best. Canada: Wiley.
Wijewardena, H., & De Zoysa, A. (1999). A comparative analysis of management accounting practices in Australia and Japan: an empirical investigation. The International Journal of Accounting, 34(1), 49-70.
Wright, Geroy and MacPhee (2000)," A Human Resources model for excellence in global organization performance", Management Decision, Vol. 38/1 pp. 36-42
Yean et. al.,(2006)," Understanding factors for benchmarking adoption: New evidence from Malaysia", Benchmarking: An International Journal, Vol. 13 No. 5 pp. 548-565
Yu, XY (2006) Theoretical themes in management and management accounting in China. Asia-Pacific Management Accounting Journal, 19(1), 1
Zain, Z. M., Ishak, R., & Ghani, E. K. (2009). The Influence of Corporate Culture on Organisational Commitment: A Study on a Malaysian Listed Company. European Journal of Economics, Finance and Administrative Sciences, 16-26.
Zainuldin, M. H. (2010). Management Accounting Practices In An Islamic Bank: A Case of Bank Muamalat Malaysia Berhad (BMMB). Universiti Teknologi Mara, Shah Alam
Zainuldin, M. H., Abdul Rahman, I. K. & Haniff, M. N. (2013), Enhancing Management Acoounting Practice through Islamic Values: A Case Study of a Malaysian Islamic Bank. Asia-Pacific Management Journal, 8(2).
Zbaracki, M. J. (1998). The rhetoric and reality of total quality management.
Administrative Science Quarterly, 43(3), 35
Zhonggao, L. & Lijuan, W. (2003). Accounting Standards' Formulation Model: Principles- based or Rules-based (J). The Theory and Practice of Finance and Economics, 5, 013.
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution 4.0 International License.
You are free to:
- Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
- Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Notices:
You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .
No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.
