The Role of Management Control and Accounting Systems in Increasing the Efficiency of Activities of Manufacturing Companies

Abstract

The study aimed at finding out the role of management control and accounting systems in increasing the efficiency of activities of Syrian private manufacturing companies. Two variables were stated: the degree of reliability on the internal control and auditing system (ICAS), and the extent of using the ISO system in setting procedures that help in increasing the efficiency of activities for these companies. The extent of adopting control procedures by top management were also studied and analyzed in two different fiscal years-2009-2010 and how these issues reflected on reducing manufacturing overhead and period expenses for companies under study. A sample consisted of  fifteen executive managers and ten members of the board of directors, owners and general managers was selected. Questionnaire forms on the research variables were distributed to the research participants, and statistical tests were applied. Findings of this study were also relied on participants' interviews and observations to achieve the objectives of this research.

The main results of the study are:

1- There are different perceptions and attitudes towards the degree of reliability on the internal control and auditing system in increasing the efficiency of activities for Syrian private manufacturing companies, despite of the ability of manufacturing companies to adapt quickly to contingent internal factors, such as different nature of operating conditions for these companies, the issuance of many internal administrative orders and management written instructions, the issuance of financial and control procedures; and external factors, such as levels of competition and the use IT facing these companies.

2- There are no agreement between different management levels, their top management, and board of directors on the feasibility of the ISO system in supporting the internal control and auditing system and adopting administrative and financial policies and procedures that help in reducing unfavorable informal practices resulted from dysfunctional behaviors within these companies.

3- There are general agreement between different participants for the need to modernize management control and accounting systems through:

(i) a complete awareness of professionals and users of economic decisions outputs; (ii) more effective and continuous training for different administrative levels; and (iii) improving and simplifying legal and contractual regulation, and other modern management control and accounting procedures that suit management and financial control systems. Actually, the lack of coordination between executive management has led to the need to formulate many management control and accounting procedures within the middle management levels to achieve corporate objectives of Syrian private manufacturing companies.

Keywords: Management Control, Accounting Control Systems, Efficiency of Activities, Syrian Manufacturing Companies.