Competitive Situations and Significance of Management Accounting System in Business Firms of Nepal

Abstract

The purpose of this study is to examine the significant factors of the management accounting system (MAS) in Nepalese business firms and to examine whether these factors differ in three competitive situations, such as the low, moderate, and high level of competition. It presents the results based on a survey of business firms including sole trading, partnership, and private limited manufacturing firms of industrial estates of Nepal. The structured questionnaires were distributed to the financial managers, production managers, and operations managers of the sampled firms. For the purposes of the study, 83.33 percent of the questionnaire was collected and used. This study shows that the management accounting system has been used by most businesses as a compilation of information to determine from the perspective of its significance, and the management accounting system used is very effective and has led to the success of business firms. Mainly, this study has explored three major significant factors of MAS such as decision-making and performance analysis, proper allocation of resources and cost reduction, and planning and budgeting tool. The findings of this research provide a useful guideline to business firms, especially their managers, to make decisions in light of the current changing management accounting system and competitive situations.

Keywords: Business firms, Competitive situation, Factors, Management accounting system, Significance

DOI: 10.7176/RJFA/11-24-01

Publication date: December 31^st 2020