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Traditional Vs. Contemporary Management Accounting Practices and its Role and Usage across Business Life Cycle Stages: Evidence from Pakistani Financial Sector

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  • Khurram Ashfaq
  • Sohail Younas
  • Muhammad Usman
  • Zahid Hanif

Abstract

The research examines the management accounting practices and its level of usage in services sector of Pakistan. For this purpose, banking companies, Insurance companies, Telecommunication companies and Computer Service companies were selected. The data was collected through adapted questionnaire regarding management accounting practices and its level of usage. There were 90 target listed services companies from service industry where data has been collected. The unit of analysis was company and the responses were analyzed through descriptive statistics. Findings with regard life cycle stages, there are 69% respondents companies belong from growth stage and 24.4% are located in maturity stage. The results indicate that management accounting practices for instance costing practices; budgeting practices & decision making practices are widely used especially traditional management accounting practices in service sector of Pakistan. While in terms of performance evaluation practices, all the non financial measures related to employees, customers and operation or innovation have lower level of usage in service sector of Pakistan irrespective of the business life cycle stage. Moreover, the results reveal that financial companies which are sub sector of service sector are more sophisticated by utilizing management accounting practices but other services companies do not much utilize management accounting practices from financial sector of Pakistan. These results imply that management accounting practices are more complicated as the companies move from growth to maturity stage. In addition, traditional management accounting practices still have the highest level in financial sector of Pakistan based on its importance & usage.

Suggested Citation

  • Khurram Ashfaq & Sohail Younas & Muhammad Usman & Zahid Hanif, 2014. "Traditional Vs. Contemporary Management Accounting Practices and its Role and Usage across Business Life Cycle Stages: Evidence from Pakistani Financial Sector," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(4), pages 104-125, October.
    • Handle: RePEc:hur:ijaraf:v:4:y:2014:i:4:p:104-125
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    References listed on IDEAS

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    1. Ayaz Ahmed & Henna Ahsan, 2011. "Contribution of Services Sector in the Economy of Pakistan," Working Papers id:4673, eSocialSciences.
    2. Abdel-Kader, Magdy & Luther, Robert, 2008. "The impact of firm characteristics on management accounting practices: A UK-based empirical analysis," The British Accounting Review, Elsevier, vol. 40(1), pages 2-27.
    3. Moores, Ken & Yuen, Susana, 2001. "Management accounting systems and organizational configuration: a life-cycle perspective," Accounting, Organizations and Society, Elsevier, vol. 26(4-5), pages 351-389.
    4. Tariq H. Ismail, 2007. "Performance evaluation measures in the private sector: Egyptian practice," Managerial Auditing Journal, Emerald Group Publishing, vol. 22(5), pages 503-513, May.
    5. Lamminmaki, Dawne & Drury, Colin, 2001. "A comparison of New Zealand and British product-costing practices," The International Journal of Accounting, Elsevier, vol. 36(3), pages 329-347, September.
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    2. Ercument Okutmus, 2015. "Resource Consumption Accounting with Cost Dimension and an Application in a Glass Factory," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(1), pages 46-57, January.
    3. Oyewo, Babajide & Ajibolade, Solabomi & Omolehinwa, Eddy, 2020. "The Usage Of Customer Accounting As A Source Of Sustainable Competitive Advantage: Some Evidence From Quoted Manufacturing Companies In Nigeria," International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), The Institute of Chartered Accountants of Nigeria (ICAN), vol. 9(1), pages 18-46, March.
    4. Jihene Ghorbel, 2016. "The Relationship between the Profile of Manager and Management Accounting Practices in Tunisian SMIs," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(1), pages 61-72, January.

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