IMPLEMENTATION OF MANAGEMENT ACCOUNTING CHANGES IN AUSTRALIA 633

IMPLEMENTATION OF MANAGEMENT ACCOUNTING CHANGES IN AUSTRALIA 633

measure achieved an alpha value of 0.6406 (Cronbach, 1951), and a standardized item alpha of 0.6407. This figure is marginally below the value of 0.70 recommended by Nunnally (1978, p. 245), but can be regarded as moderate (Brownell & Dunk, 1991, p. 697) and acceptable (Daft & Macintosh, 1981, p. 214). Table 3 further shows the total-item correlations for each of the scale composites, with ranges from 0.3280 to 0.4184. According to De Vaus (1991, p. 239), values above 0.30 generally indicate acceptable scale unidimensionality.

Table 3 Analysis of Scale Reliability and Unidimensionality: Management Accounting Innovations

Management accounting Alpha if item techniques

Correlated item- total correlation

deleted ABC

Cases

Mean

Std. Dev.

The above innovations were tested for univariate normality using the Kolmogorov-Smirnov test and the tests of the indices of skewness and kurtosis. In all cases, the assumption that the sample represents a normal population could not be rejected. The findings of current study suggest that the frequency of adopters of recently developed cost and management accounting innovations (addressed in this study) in Australia are still less than those of non-adopters. This is despite the expectation that the adoption of recent management accounting changes are growing due to their contribution to overall performance of organizations (Adam & Fred, 2008; Banker & Mashruwala, 2007; Dikolli, Kinney, & Sedatole, 2007; Kelly, 2007; Vera-Munoz, Shackell, & Buehner, 2007).

Besides above six techniques, we asked our targeted respondents (in an open question) to list any other management accounting changes/innovations which were either discussed or used by them. According to the findings, there were a number of other managerial tools listed by respondents (which were either discussed or at least used by one or more organizations) as follows:

DCF, TQM, CUSUM charts (cumulative sum control chart) and optimum transfer pricing, computer technology, opportunity cost budgeting, ZBB, decision trees, critical path scheduling, and management by objectives, information economics and agency theory, JIT scheduling, strategic business units, experience curves, portfolio management, materials resource planning, diversification, matrix organization and product repositioning, LCC, value-added management, theory of constraints, vertical integration, private labels throughput accounting, business process reengineering, quality functional deployment, outsourcing, gain-sharing, core competencies, time-based competition and learning organization, lean accounting, KPIs, RAB, ZBB, functional analysis, resource management, and time-driven activity-based costing.

Not all above techniques are pure management accountings changes/innovations. Furthermore, the development and introduction of some of above techniques dates back to more than 50 years ago (as explained in the following paragraph). However, the implementation of many of these techniques are not very prevalent in the literature. So, these findings could help future researchers in this area to expand their views and address various issues/questions regarding the implementation of above techniques in practice. The following paragraph provides some information regarding the history and introduction of above techniques in the

634 IMPLEMENTATION OF MANAGEMENT ACCOUNTING CHANGES IN AUSTRALIA literature. According to Hagerty (1997) and Smith (1999), we can categorize the development and introduction

of above techniques into different decades as follows: (1) 1950s: Discounted cash flow (DCF), total quality management (TQM), CUSUM charts, and optimum transfer pricing. (2) 1960s: Computer technology, opportunity cost budgeting, zero-base budgeting (ZBB), decision trees, critical path scheduling, and management by objectives. (3) 1970s: Information economics and agency theory, JIT scheduling, strategic business units, experience curves, portfolio management, materials resource planning, diversification, matrix organization, and product repositioning.

(4) 1980s: Activity-based costing (ABC), activity-based management (ABM), strategic management accounting (SMA), activity management (AM), life cycle costing (LCC), target costing (TC), value-added management, theory of constraints, vertical integration, private labels, and benchmarking.

(5) 1990s: Business process reengineering, quality functional deployment, balanced scorecard (BSC), outsourcing, gain sharing, core competencies, time-based competition, and learning organization. According to Dugdale and Colwyn (1998), the application of TOC which is one of the developments of 1980s is usually labeled as “throughput accounting”. Completing the above list, we can also include “lean accounting” as one of the developments of 1990s (Maskell & Baggaley, 2006). The main purpose of lean accounting is to reduce steps in transaction processing, eliminate standard costs in favor of actual costs and discontinue cost allocations (Kennedy & Widener, 2008). In describing lean accounting, Kennedy and Widener (2008) considered this technique as continuous improvement and reducing time by eliminating waste and reduction of costs which are the main principles of lean accounting.

Updating the above techniques, we can expand the above list including the Second Generation BSC and the Third Generation BSC as further developments of management accounting innovations in 1990s (Lawrie & Cobbold, 2004). Expanding the above management accounting innovations, we may also add time-driven activity-based costing as another management accounting development in 2000s (Kaplan & Anderson, 2007).

The study further explored the level of organizational satisfactions with their implemented management accounting techniques (as a proxy for organizational performance) to see if the adoption of management accounting changes has contributed to organizational performance. It was expected that increasing organization satisfaction as a consequence of implementation of management accounting changes can be considered as an encouraging factor promoting the implementation of management accounting changes in organizations. Table 4 reveals the level of satisfaction of Australian firms with their implemented cost and management accounting systems as follows.

Table 4 The Level of Organizational Satisfaction With Implemented Management Accounting System

Level of satisfaction

Cumulative percentage (%) Very dissatisfied

Needs improvement

Moderately satisfied

Very satisfied

Total