Today’s competitive environment shows a noticeable change in information needs. The integration of financial and non financial measures in management accounting systems seems to be in a state of flux. Some of the main changes concern establishing new models for measuring enterprise activities proposed by consultant firms. In our opinion it is difficult to say that these models are representative of a new way of developing novelty management accounting systems. The manner in which non financial measures can be combined with financial ones can be more varied than the number of known models. This variety provides an opportunity to identify the specific advantages and disadvantages related to the use of non financial measures in real - world management accounting systems. In particular, some changes are created from new non-financial information contained in different information systems, for instance, those coming from production, quality, safety and environmental areas. These measures can be combined in new ways with financial information produced by accounting systems in order to improve consciousness and knowledge. Furthermore, the limits of traditional financial performance indicators have been highlighted and analysed. These measures could be manipulated to give an apparent boost to financial performance. They also lack relevance for taking action as they do not explain the fundamental causes of problems or anticipate the fundamental changes in business. In other words they are too aggregated and synthetic for guiding managerial action and insufficiently oriented to measuring “intangible assets” (customer relationships, products and services innovation, high quality and responsive operating processes, employee capabilities, skills and motivation). This paper deals with non financial practices in management accounting systems and presents evidence of an empirical survey on a sample of large and medium size Italian firms. It is designed to give visibility to the changes described above. The survey was defined after the first analysis of the case study presented at 5th EIASM International Seminar on Manufacturing Accounting Research in Pisa, Italy. The paper presented at the aforementioned seminar illustrates the different experiences and developments obtained by each case study in using performance measurements, in particular it tries to focus on innovative results obtained or experiences still in progress in respect of the use of both financial and non financial indicators. The survey aims at identifying these aspects of practice on a broad scale. Thus the first purpose of the survey is to explore the “state of the art” in management accounting practices of large and medium size enterpris es selected in some traditional manufacturing sectors. In particular this research has been developed in order to identify the way of using non financial indicators at business unit level. Thus the research shows some relations between corporate management accounting systems and local projects. Some of the results, contrast with the Kaplan and Norton assumptions and, at the same time, show a significant preference for forms of integration with different sets of measures (reporting cards) that are still under development. It is important to underline that the use of non financial indicators can be very different and its application is in a state of flux. The paper is one of the results obtained through a national research project funded by the Ministry of Education, University and Research (MIUR). The main objective of this project is the definition of a conceptual framework for assessing the potential and level of integration of financial and non-financial information.
A survey on non financial measure practices in Italian management accounting systems
GIANNETTI, RICCARDO;
2002-01-01
Abstract
Today’s competitive environment shows a noticeable change in information needs. The integration of financial and non financial measures in management accounting systems seems to be in a state of flux. Some of the main changes concern establishing new models for measuring enterprise activities proposed by consultant firms. In our opinion it is difficult to say that these models are representative of a new way of developing novelty management accounting systems. The manner in which non financial measures can be combined with financial ones can be more varied than the number of known models. This variety provides an opportunity to identify the specific advantages and disadvantages related to the use of non financial measures in real - world management accounting systems. In particular, some changes are created from new non-financial information contained in different information systems, for instance, those coming from production, quality, safety and environmental areas. These measures can be combined in new ways with financial information produced by accounting systems in order to improve consciousness and knowledge. Furthermore, the limits of traditional financial performance indicators have been highlighted and analysed. These measures could be manipulated to give an apparent boost to financial performance. They also lack relevance for taking action as they do not explain the fundamental causes of problems or anticipate the fundamental changes in business. In other words they are too aggregated and synthetic for guiding managerial action and insufficiently oriented to measuring “intangible assets” (customer relationships, products and services innovation, high quality and responsive operating processes, employee capabilities, skills and motivation). This paper deals with non financial practices in management accounting systems and presents evidence of an empirical survey on a sample of large and medium size Italian firms. It is designed to give visibility to the changes described above. The survey was defined after the first analysis of the case study presented at 5th EIASM International Seminar on Manufacturing Accounting Research in Pisa, Italy. The paper presented at the aforementioned seminar illustrates the different experiences and developments obtained by each case study in using performance measurements, in particular it tries to focus on innovative results obtained or experiences still in progress in respect of the use of both financial and non financial indicators. The survey aims at identifying these aspects of practice on a broad scale. Thus the first purpose of the survey is to explore the “state of the art” in management accounting practices of large and medium size enterpris es selected in some traditional manufacturing sectors. In particular this research has been developed in order to identify the way of using non financial indicators at business unit level. Thus the research shows some relations between corporate management accounting systems and local projects. Some of the results, contrast with the Kaplan and Norton assumptions and, at the same time, show a significant preference for forms of integration with different sets of measures (reporting cards) that are still under development. It is important to underline that the use of non financial indicators can be very different and its application is in a state of flux. The paper is one of the results obtained through a national research project funded by the Ministry of Education, University and Research (MIUR). The main objective of this project is the definition of a conceptual framework for assessing the potential and level of integration of financial and non-financial information.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
