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The research objectives of the thesis are to assess the status of applying accounting management techniques in enterprises; The influence of factors on the application of management accounting techniques in Northern Vietnam enterprises.
1 INTRODUCTION Rationales In the opening and integrating trend, Vietnamese businesses are facing fierce competition within domestic enterprises as well as with foreign companies Vietnamese enterprises need to prepare in different aspects including capital, technology, equipment and effective enterprise administration to stand firm and prevail in this competition In order to improve management efficiency and help these companies to have their high positions in the competition, administrators need to be equipped with modern management knowledge supported efficiently by information of management accounting It is significantly neccessary to conduct research studying the actual situation of management accounting application as well as factors’ impact on this application in enterprises so that appropriate recommendations to promote management accounting’s development in enterprises could be suggested As a result, the author selected the thesis topic named "The factors’ impacts on the application of management accounting techniques within enterprises in northern Vietnam " Research objectives The main research objectives of the topic are the actual status of management accounting application in enterpries in northern Vietnam and the impact of a few factors on this situation To be specific, the topic was conducted with the aim of achieving following objectives: - Assessing the status of implementing management accounting techniques in enterprises in northern Vietnam - Studying factors affecting the application of management accounting techniques in enterprises in northern Vietnam Research questions How are techniques related to management accounting applied by companies in northern Vietnam? How selected factors influence the application of management accounting techniques in enterprises in northern Vietnam? Research subject and scope * Research subject - Actual situation of applying some management accounting techniques in enterprises in Northern Vietnam - The relationship between a number of factors with the application of management accounting techniques in enterprises in Northern Vietnam * Scope of the research The research selected a few companies to study the status of management accounting application The selected enterprises should be divided differently according to sectors, fields, types of ownership, scale and headquarters located in northern Vietnam’s provinces Research Methods The author used both qualitative research methods and quantitative research methods to conduct the research Qualitative research was carried out through in-depth interviews and discussions with experts for better understanding of research issues, which would identify the scope of research, select independent variables and dependent variables in order to build up research model, design questionnaires, research procedure as well as analyse data Quantitative research consisted of parts: preliminary quantitative research and core quantitative research The purpose of preliminary quantitative research was to find out inappropriate points in survey questions and evaluate the reliability of the scale before conducting core research Official research was conducted to collect data for the purpose of quantitative analysis The revised questionnaire will be sent to enterprises listed in the survey sample to synthesize data Collected data will be cleaned for factor analysis, correlation analysis, model verification and research hypotheses by software SPSS 22 Contributions of the research - In terms of academic, theoretical aspect: The thesis synthesized important researches about the relationship of some factors with the implementation of management accounting in companies In addition to using contingency theory to explain and select independent variables in the research model, the thesis also applied institutional theory to explain the low level of using management accounting in enterprises in northern Vietnam - In terms of practice: The thesis researched and pointed out the status of implementing management accounting in enterprises in northern Vietnam Research results illustrated that most enterprises apply techniques in management accounting at a low level compared to other countries in the region and the world The thesis established research model and studied the factors’ influence on the application of management accounting techniques in northern Vietnam’s enterprises These factors in the thesis model included: competitive pressure, administrative decentralization in enterprises, the frequency of using IT, the rate of managers’interest in management accounting as well as accountant’s professional qualifications Research results indicated that all of the factors listed in the model affected the management accounting in enterprises in northern Vietnam 3 - New recommendations suggested from research results: Based on the results, the author suggested recommendations to enhance the application of management accounting in enterprises and thereby improve business management efficiency Research structure: In addition to the introduction, the thesis consists of chapters: Chapter 1: Research background of the thesis Chapter 2: Theoretical framework of management accounting Chapter 3: Research methods Chapter 4: Research results and discussion Chapter 5: Conclusion and recommendations factors Research objectives of above thesises were management accounting techniques including traditional techniques and modern techniques However, the quantity and names of those techniques in each study were also very different.Studies were carried out in various businesses, in different geographical areas and in different economies in developed and developing countries So far, there have been research projects about management accounting in Vietnam Nevertheless, the research of Nishimura (2005) and Nguyen Thi Phuong Dung (2014) only focused on identifying the actual stage of management accounting in Vietnamese enterprises in the process of developing management accounting Similarly, Doan Ngoc Phi Anh (2012) only studied the possibility of using western management accounting for Vietnamese businesses Although the purposes and methods of those researches may be similar, the research objectives and the time conducting studies were different; consequently, the results were quite different Moreover, there have not been any projects in Vietnam working fully on the status of management accounting application as well as factors’ influency regarding companies working in several business aspects, which is the gap for research CHAPTER RESEARCH BACKGROUNDS RELATED TO THE THESIS 1.1 Researches on the status of application of Management Accounting in enterprises The thesis reviewed domestic and foreign studies about actual situation of Management Accounting application From this, the author synthesized results from identical research projects in and outside Vietnam regarding the status of management accounting application in enterprises 1.2 Researches in terms of factors affecting the application of management accounting techniques The thesis reviewed domestic and foreign studies about actual situation of Management Accounting application From this, the author synthesized results from identical research projects in and outside Vietnam regarding the status of management accounting application in enterprises 1.3 Conclusion about previous studies and research gaps Studies related to the topic were divided into two main groups The first group included studies focusing on the status of management accounting application in enterprises without studying the effects of factors on this application The second group consisted of researches studying both the status of the application and the factors’ impact on it In terms of theoretical framework, those researches was mainly based on the contingency theory of Otley (1980) and the diffusion of innovations Regarding researches’ purposes, they all worked with the aim of studying the status of management accounting application in enterprises as well as factors impacts on this application Regarding research methods, in addition to some researches using qualitative research methods such as authors (Armitage & Webb, 2013), the remaining researches applied quantitative research methods using the Likert 5-point scale to determine the application’s situation and influencial CHAPTER THEORETICAL FRAMEWORK OF MANAGEMENT ACCOUNTING 2.1 The process of developing Management Accounting The management accounting development was divided into main periods by IFAC (1998, p.84): Period I was from earlier until 1950, management accounting was called as cost accounting (Wilson and Chua, 1988) Characteristics of techniques developed during this period focused on identifying costs and financial control such as standard costs, cost estimation, department reports, breakeven analysis techniques, systems assessing the departments’ productivity, transfer pricing method, financial performance indicators such as ROI, ROE, ROA, etc (Kaplan, 1984) The second period was ranging from 1950 to before 1965, the major points of this period switched to techniques for planning and control (AbdelKader, 2006) Techniques developing in this period included information analysis techniques for decision-making progress and activity accounting Period III was from 1965 to before 1985 in which the change of production technology and the use of computers in automation processes changing the cost structure made the traditional cost allocation methods no longer available, as a result, the activity-base costing method was proposed by Kaplan and Norton Regarding the forth period from 1985 until now, management accounting concentrated on providing information to use resources efficiently and support the strategies implementation Management accounting techniques aimed to create added value for customers, shareholders and enterprises innovation 5 2.2 Content and techniques of Management accounting 2.2.1 Definition of Management Accounting: There have been different definitions of Management accounting (Drury, 2012) According to the American Accounting Association, Management Accounting was the process of identifying, measuring and communicating information which allowed information’s users to evaluate and make decisions According to Nishimura (2005), Management Accounting played the role of providing information for managers to make decisions, set plans, control and measure operation efficiency 2.2.2 Management Accounting techniques Based on the list of techniques which were used by Chenhall & Langfield-Smith (1998), Luther & Longden (2001), El-Ebaishi et al (2003), Wu et al (2007), Doan Ngoc Phi Anh (2012) together with Management Accounting techniques taught popularly in Vietnamese universities, there were some techniques chosen for this research, which included: - Decision support techniques - Cost accounting techniques - Performance measurement system - Types of estimates - Strategic management accounting techniques 2.3 Theories applied in the research of Management accounting 2.3.1 Institutional Theory Institutions are formal and informal rules, monitoring and enforcement mechanisms, and value systems defined in the context in which the organizations operate and interact with each other Applying institutional theory to explain the enterprises’ application of management accounting techniques, Scapens (1993) considered management accounting as a set of rules and habits, along with other organizational rules and habits, which allows copying and is associated with organizational life (Scapens, 1993) In the increasingly competitive environment and scarce resources, enterprises must find ways to improve business efficiency through effective decisions based on appropriate information The need for information which was suitable for making decisions had motivated businesses to build and apply management accounting techniques According to the mimetic processes, the efficiency in the decision-making process based on management accounting information of companies also spread to other enterprises, which made them imitate the same way (normative pressures) Imitating large enterprises with strong influence would increase the ability to be accepted and thus increase the viability (Nguyen Van Thang, 2015, p.42) After acknowledging the effects and necessity of management accounting techniques in improving business performance, the normative pressures would help companies approach and apply management accounting techniques with models which were conducted successfully by previous enterprises Institutional theory also refers to the matter of power under two perspectives: the power of employees in proposing and introducing new management accounting techniques based on the need to implement the plan, long-term goals as well as companies resources On the other hand, the introduction of new management accounting techniques would encounter resistance of forces that hindered the adoption of new technologies, which was in the form of "the power of system", with the aim of maintaining inherent stability and counteracting the change which was challenging them (Burns, Ezzamel, & Scapens, 1999) 2.3.2 Contingency Theory Contingency theory was developed and mentioned in organization’s documents around the early 1960s During the mid-1970s, this theory was used by many studies to select and explain the effects of a number of uncertain indicators on the management accounting application of enterprises (Selto et al, 1995; Chenhall & Langfield-Smith, 1998; Chenhall, 2003) The basic argument in contingency theory recommended by Otley (1980) in the research on management accounting was "there was no theoretical model which could fit for all kind of organizations." Each organization had its own characteristics of operation objectives and operating environment; therefore, it was necessary to establish an organizational model suitable for their activities (Otley, 1980) CHAPTER RESEARCH METHODS 3.1 Hypothesis and research model Hypothesis H1: Competitive pressure had a positive impact on the application of management accounting techniques Hypothesis H2: Decentralization in enterprises had a positive influence on the application of management accounting techniques.in enterprises Hypothesis H3: The actual status of using information technology had a positive effect on the application of management accounting techniques in enterprises Hypothesis H4: The level of administrator’s interest in management accounting has positively impacted the application of management accounting techniques in enterprises The theory of H5: Accountant’s professional qualifications had a positive influence on the application of management accounting techniques in enterprises The hypotheses were linked according to the research model as diagram 3.1 Diagram 3.1 Research model In the above model, there are independent variables and dependent variables Independent variables include the following factors namely Competitive pressure, Decentralization’s level, The status of information technology application, The level of administrator’s interest in management accounting, Accountants’ professional qualifications Dependent variable is the status of applying management accounting techniques in enterprises 3.2 Research Methods The thesis used both qualitative research methods and quantitative research methods 3.3 Variables selection in the research model 3.3.1 Independent variables selection From the original research model based on Contingency theory and with reference to previous studies, the author discussed with experts about the relevance, possibility and meanings of independent variables in the research model Selected independent variables in the model were Competitive pressure, Decentralization’s level, The status of information technology application, The level of administrator’s interest in management accounting, and Accountants’ professional qualifications 3.3.2 Dependent variables selection Management accounting techniques is a term which refers to techniques and tools used to collect and analyze information with the aim of serving management functions and management decision-making process in enterprises In order to make a method or technique popular, user must understand fully its usage as well as its benefits Therefore, based on research materials, especially the study by Doan Ngoc Phi Anh (2012) as well as the discussion with experts about management accounting methods, which were taught in universities, colleges and were applied widely in Vietnamese businesses, the thesis selected Management accounting techniques for the research model as followings: Table 3.1 Selected methods / techniques Classified by Classified by Methods / techniques function function Price from variable cost C Cost accounting Target cost C Cost accounting ABC C Cost accounting Production cost estimation B Planning Sales cost estimation B Planning Profit estimation B Planning Budget estimation B Planning Financial report estimation B Planning Product profit analysis D Deciding 10 CVP analysis D Deciding 11 Analysis estimations’ gaps D Deciding 12 Standard cost and gaps analysis P Evaluating 13 Department profit P Evaluating 14 Non-Financial Measures P Evaluating 15 Long-term forcast S Strategy Capital cost estimation (Payback, Strategy 16 ROI) S 17 Capital cost estimation (NPV, IRR) S Strategy 18 Value chain analysis S Strategy 19 Balance sheet S Strategy 20 Life cycle costing S Strategy Notes: B (Budgeting); C (Costing); D (Decision); P (Performance); S (Strategy) 3.3.3 Scale The author used scales of previous studies to measure independent variables and dependent variables: Chenhall & Langfield-Smith (1998), Halma and Laats (2002), Abdel-Kader and Luther (2008), Karanja et al (2013), Sulaiman et al (2015), etc 3.4 Questionnaire establishment The questionnaire was designed based on the questions which were used by previous authors such as Chenhall and Langfield-Smith, 1998; Wijewardena, 1999; Joshi, 2001; Hyvonen, 2005; Ahmad, 2012; Yalcin, 2012 This form was used by many research (Yalcin, 2012; Ahmad, 2012) The questionnaire consisted of three parts including Part General information of the companies and respondents; Part 2: Survey of Competitivenes H1 Decentralization H2 Information technology H3 Administrator interest H4 Accountant qualificationss Management Accounting H5 10 the application of Management Accounting in companies; Part 3: Factors affecting the application of Management Accounting in companies 3.5 Selection of the sample and sample size According to Nguyen Van Thang, if the population size is large and it is impossible to identify the accurate value, the size can be calculated via this formula: z2( p*(1- p) n= e2 In which: n = sample size z = the distribution value corresponding to the selected confidence rate (if the confidence rate is 95%, the value of z will be 1,96…) p = the estimate of the population’s percentage (which usually is 50% - the population’s highest probability of occurring) e = tolerance (+-3%, +-4%,+-5% ) If the confidence rate is 95%, the research sample scale is calculated according to the above formula with 384 observations divided by a population of more than 10 millions (Thang, 2015b) According to that formula, the research will be required to use 384 observations 483 questionnaire forms were polled and after the clearning (eliminating forms with duplicated answers, inappropriate replies,conflicted responds…), 437 eligible forms were encoded and analyzed with the statistical system named SPSS 22 Table 4.1 Characteristics of surveyed companies CHAPTER FINDINGS AND DISCUSSION 4.2 Status of the application of Management Accounting in Northern Vietnam enterprises Findings demonstrate the status of the application of Management Accounting in Northern Vietnam companies which is presented as below: 4.2.1 Status of the application of some cost accounting methods In the three surveyed cost accounting methods, variable costing has the highest application rate being 26.1% It is followed by target costing with 19.5% application rate and activity-based cosing has the lowest rate of being applied (6.2%) Compared to other countries provided by research of Chenhall and Langfield-Smith (1998), Joshi (2001), Abdel-Kader (2006), the application rate of these cost accounting methods in Vietnam Northern companies is relatively low Taken business type into account, multi-industry and service companies possess the highest frequency rate of applying variable cost with 40% and 42,3% respectively Manufacturing firms rank third with 3,2% while construction companies have the lowest rate being 21,3% The application rate of remaining companies is lower than all companies’ average rate Construction and service companies’ application rate of target costing is higher than the average rate being 24,7% and 26,9% respectively Remaining firms in other sectors have the rate being lower than the average 4.1 Characteristics of Vietnamese companies and description of the research sample 4.1.1 Some characteristics of Vietnamese firms and Northern Vietnam companies Majority of Vietnamese firms and Northern Vietnam companies are small-tomedium sized (with the number of employees being less than 200) Companies with more than 200 employees only take up roughly 2% Most of the surveyed firms are in the commerce and service sector (29,53%) Companies in the manuafacturing and processing sector account for 27.85% and the remaining are active in different industries with their share standing at approximately 3% Million billion, statistical yearbook Out of all active firms in Vietnam, the total quantity of active Northern Vietnam companies is 236.580 making up 46.7% of the market share These firms employ million people which constitute 49,3% of the total of 14 million employees working in companies nationwide The total amount of capital of Northern Vietnam firms is more than 10 million billion VND accounting for 39,6% of all companies’ capital in the country (which is more than 26 million billion VND) In addition, Northern Vietnam companies achieve the net revenue being more than 17 million billion VND (Statistical Yearbook, 2017) 4.1.2 Description of the research sample Business Number of employees Characteristics Service Multi-industry Manufacturing Commerce Construction Total Below 100 From 100 to 300 From 301 to 500 From 501 to 1000 More than 1000 Total Quantity 26 60 76 97 178 437 252 90 39 28 28 437 Percentage 5,9 13,7 17,4 22,2 40,7 100,0 57,7 20,6 8,9 6,4 6,4 100,0 11 12 Companies infrequently apply the activity-based costing Except for service firms with the application rate being 15,4%, companies in the remaining sectors allo have the rate below 10% Notably, there was no record of commerce companies applying this method Overall, the frequency of surveyed firms using variable costing is comparatively low Only service companies achieve the average point of 3,4 while companies in other industries were recorded the average point of below 4.2.2 Status of the application of estimates Findings showed that estimate rate reached more than 46.1% in construction firms with production cost estimate having the highest rate (100,0%) and financial statement estimate possessing the lowest rate (46,1%) The rates for consumption estimate, material cost estimate and capital estimate were 52,8%; 65,2% amd 57,3% respectively Manufaturing companies ranked the second regarding the application rate of estimate Material cost estimate had the highest rate of being used with 52,6% while financial statement estimate places last with 43,4% Production cost estimate, consumption estimate and capital estimate had the application rate being 51,3%; 44,7% and 51,3% respectively Multi-industry firms finished the third in terms of the rate using estimate In these companies, material cost estimate was applied most frequently with the rate achieving 58,3% while financial statement estimate had the lowest rate of 31.7% Consumption rate reached 53.3% Both production cost estimate and capital estimate possessed the rate of 41,7% Service companies used capital estimate most frequently with the rate being 65.4% while production cost estimate has the lowest application rate of 15.4% Other estimate all possessed the rate below 40% (38,5% for consumption estimate, 46,2% for purchase estimate and 42,3% for financial statement estimate) The application rate of estimates was relatively low in commerce firms Production cost estimate was used with the lowest rate of 6,2% Other estimates including financial statement estimate, capital estimate, for consumption estimate and purchase estimate had the application rate being 38,1%; 48.5%, 45,4% and 46,4% respectively The average point regarding the frequency using estimates among survey companies ranged from 3,12 to 3,44 Purchase estimate was applied most frequently with the average of 3,44 while financial statement estimate ranked the last with the average of 3,12 In terms of business types, construction firms had the highest application rate of estomates The average point for companies in this sector ranged from 3,35 to 4,37 Commerce firms had the average point below the average value In addition to the production cost estimate rarely being use, other estimates’ mean ranged around the pint value (2,78 to 3,09) 4.2.3 The application of indicators for activities’ evaluation In addition to net profit indicator used by most companies, sale growth rate indicator had the application rate being more than 50% The revenue per employee indicator had lowest rate of being used (7,2% for commerce companies and 25% for manufacturing firms) Other indicators had the application rate below 40% In addition to using net profit indicator frequently, surveyed companies applyed financial indicators to assess activities at a average rate (above 3,0) The revenue per employee indicator had the lowest applicaton rate of 2,6% The rate of using indicators in commerce companies was lower than the average rate of surveyed firms in general Surveyed companies infrequently used non-financial indicators to evaluate activities Customer satisfaction indicator was applied with the highest rate of 46,2% in service firms Delivery-on-time indicator and time length for construction/production indicator were used with the rate of 45,0% and 41% in multiindustry companies and construction firms respectively The remaining indicators has the application rate below 40% The frequency rate of using non-financial indicators was also relatively low with their mean being roughly 3,0 4.2.4 The application of information analysis techniques for decision-making Regarding the usage of information analysis techniques to make short-term decisions, CVP analysis and profit analysis had the highest application rate of more than 53% while other techniques had the application rate ranging from 20 to 50% Corresponding to the application rate, the degree of using CVP analysis and profit analysis reached above the mean (3,4) while other techniques were around 3,0 In terms of the usage of information analysis techniques to make long-term decisions, internal rate of return (IRR) was the most popular technique in commerce companies (88,7%) and it was payback period for construction firms (51,7%) Other techniques had the application rate being lower than 50% 4.2.5 The application of Strategic Management Accounting (SMC) Target costing was applied most frequently with the rate of 24,7% in construction firms Balanced scorecard was not used by any of surveyed companies Other techniques had the application rate being below 20% The low application rate led to the low mean of using strategic management accounting in surveyed firms In addition to target costing reaching a mean of 3,2, other techniques had a mean of below 3,0 4.3 Factors affecting the application of management accounting There are five factors influencing the application of management accounting consisting of (1) Competition, (2) Decentralization in the company, (3) the application of information technology, (4) Managers’ concerns with management accounting and (5) accountants’ qualifications Results of hypotheses approved and disproved via Spearman coefficient testing and linear regression are demonstrated in Table 5.1 as below: 13 No Table 5.1 Approved and disproved positive hypotheses Dependent Independent Hypotheses Variables Variables Group Competition Hypothesis H1-1: Positive correlation between Market Competition and the application rate of techniques to support the decision-making process exists Hypothesis H1-2: Positive The degree of correlation between the degree of decentralization decentralization in the company and the application rate of techniques to support the decisionmaking process exists Positive Techniques Status quo of Hypothesis H1-3: correlation between the application to support the application of information technology and the the of information application rate of techniques to decisiontechnology support the decision-making making process exists process Positive Managers’ Hypothesis H1-4: correlation between managers’ concerns concerns with management accounting and the application rate of techniques to support the decision-making process exists Hypothesis H1-5: Positive Accountants’ correlation between accountants’ qualifications qualifications and the application rate of techniques to support the decision-making process exists Group Hypothesis H1-6: Positive Competition correlation between Market Competition and the application rate of indicators to assess activities exists Indicators to Hypothesis H1-7: Positive Decentralizatio assess correlation between the degree of n activities decentralization in the company and the application rate of indicators to assess activities exists Hypothesis H1-8: Positive Status quo of correlation between the application information 14 No Results Approved Approved 10 Approved 11 Disproved 12 Approved 13 14 Approved 15 Approved Approved 16 Hypotheses of information technology and the application rate of indicators to assess activities exists Hypothesis H1-9: Positive correlation between managers’ concerns with management accounting and the application rate of indicators to assess activities exists Hypothesis H1-10: Positive correlation between accountants’ qualifications and the application rate of indicators to assess activities exists Group 3: Hypothesis H1-11: Positive correlation between Market competition and the application rate of estimates exists Hypothesis H1-12: Positive correlation between decentralization in the company and the application rate of estimates exists Positive Hypothesis H1-13: correlation between the application of information technology and the application rate of estimates exists Hypothesis H1-14: Positive correlation between managers’ concerns with management accounting and the application rate of estimates exists Hypothesis H1-15: Positive correlation between managers’ concerns with accountants’ qualifications and the application rate of estimates exists Group Positive Hypothesis H1-16: correlation between Market competition and the application rate of SMC techniques exists Dependent Variables Independent Variables technology Results Managers’ concerns Approved Accountants’ qualifications Approved Competition Approved The degree of Approved decentralization in the company Estimates The application Approved of information technology Managers’ concerns Disproved Accountants’ qualifications Approved Strategic Competition Managemen t Acoounting Approved 15 No 17 18 19 20 21 22 23 24 25 Dependent Independent Variables Variables Hypothesis H1-17: Positive (SMC) The degree of correlation between the degree of techniques decentralization in the company decentralization in the company and the application rate of SMC techniques exists Hypothesis H1-18: Positive The application correlation between the application of information technology of information technology and the application rate of SMC techniques exists Positive Managers’ Hypothesis H1-19: correlation between managers’ concerns concerns with management accounting and the application rate of SMC techniques exists Positive Accountants’ Hypothesis H1-20: correlation between accountants’ qualifications qualifications and the application rate of SMC techniques exists Group Hypothesis H1-21: Positive Competition correlation between Market competition and the application rate of techniques to support the production exists Positive The degree of Hypothesis H1-22: correlation between the degree of decentralization decentralization in the company in the company and the application rate of techniques to support the Techniques production exists to support Hypothesis H1-23: Positive Status quo of the correlation between the application the application production of information of information technology and the technology application rate of techniques to support the production exists Positive Managers’ Hypothesis H1-24: correlation between managers’ concerns concerns with management accounting and the application rate of techniques to support the production exists Hypothesis H1-25: Positive Accountants’ Hypotheses 16 Results No Chấp nhận Approved Hypotheses correlation between accountants’ qualifications and the application rate of techniques to support the production exists Dependent Variables Independent Variables qualifications Results Source: Author’s own findings and analysis Approved Approved Corresponding to positive disproved hypotheses, these following negative hypothese are approved: No Approved Approved Approved Approved Disproved Disproved Table 5.2 Negative hypotheses being approved: Dependent Independent Results Hypotheses variables variables Hypothesis H0-4: Positive correlation between managers’ concerns with Techniques management accounting and the to support Managers’ Disproved the concerns application rate of techniques to support the decision-making process production does not exist Hypothesis H0-24: Positive correlation between managers’ Managers’ Disproved concerns with management Estimates concerns accounting and the application rate of estimates does not exist Hypothesis H0-24: Positive correlation between managers’ Managers’ concerns with management Disproved concerns accounting and the techniques used Techniques in production does not exist used in Hypothesis H0-25: Positive production correlation between managers’ Accountants’ Disproved concerns with management qualifications accounting and accountants’ qualifications does not exist Source: Author’s own findings and analysis Via negative hypotheses being approved, there are conclusions regarding the correlation betwwn independent variables and dependent variables presented as below: Conclusion 1: There was no evidence for the existence of positive correlation between managers’ concerns with management accounting and the application of information analysis techniques to support the decision-making process (Break-even analysis, payback period, net present value, CVP analysis, internal rate of return, products’ profit analysis, customers’ profit analysis, providers’ cost analysis) 17 18 Conclusion 2: There was no evidence of a positive relationship between the interest of the administrators in the management accounting with the level of using some types of estimates in enterprises (consumption estimates, purchase estimates, money estimates and financial statements estimates Conclusion 3: There was no evidence of a positive relationship between administrator's interest in the management accounting and the qualifications of accountants to the status of applying the techniques and targets to support production (production estimates, production time, and product failure rate) Results of hypothesis testing, independent variables: Competitive pressure, degree of decentralization, status of IT application, managers' interest in management accounting and professional qualifications of accountants all affected the application of management accounting techniques in enterprises in North of Vietnam on statistically significant basis Acceptable hypotheses are as follows: No Table 5.3: Hypotheses about the impact of factors on the application of management accounting techniques in North Vietnamese enterprises No Hypotheses Result H1-1: There exists a positive correlation between competitive Accepted pressure in the market and the level of using decision-making support techniques H1-2: There exists a positive correlation between the degree of Accepted decentralization in enterprises and the level of using decisionmaking support techniques H1-3: There exists a positive correlation between the status of Accepted applying IT in enterprises and the level of using decision-making support techniques H1-5: There exists a positive correlation between the Accepted qualifications of accountants and the level of using decisionmaking support techniques H1-6: There exists a positive correlation between competitive Accepted pressure in the market and the level of using performance evaluations indicators H1-7: There exists a positive correlation between the degree of Accepted decentralization in enterprises with the level of using the performance evaluation indicators H1-8: There exists a positive correlation between the status of Accepted applying IT in enterprises with the level of using the performance evaluation indicators H1-9: There exists a positive correlation between administrators' Accepted interest to management accounting with the level of using performance evaluation indicators H1-10: There exists a positive correlation between the professional Accepted qualifications of accountants and the level of using the 14 10 11 12 13 15 16 17 18 19 20 Hypotheses performance evaluation indicators H1-11: There exists a positive correlation between competitive pressure in the market and the level of use of estimation types H1-12: There exists a positive correlation between the degree of decentralization in enterprises with the level of using estimation types H1-13: There exists a positive correlation between the status of applying IT in enterprises with the level of using estimation types H1-15: There exists a positive correlation between the professional qualifications of accountants and the level of using of estimation types H1-16: There exists a positive correlation between competitive pressure in the market and the level of using strategic management accounting techniques H1-17: There exists a positive correlation between the degree of decentralization in enterprises and strategic management accounting techniques H1-18: There exists a positive correlation between the status of applying IT in enterprises and strategic management accounting techniques H1-19: There exists a positive correlation between the interest of administrators in management accounting with strategic management accounting techniques H1-20: There exists a positive correlation between the professional qualifications of accountants and strategic management accounting techniques H1-21: There exists a positive correlation between competitive pressure in the market and the level of using some production support techniques H1-22: There exists a positive correlation between the degree of decentralization in enterprises and the techniques to support production H1-23: There exists a positive correlation between the status of applying IT in enterprises and the techniques to support production Result Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted Accepted Conclusion 4: The effect of independent variables on dependent variables is shown in Table 5.4 as follows: No 19 20 Table 5.4 Summary of the effects of independent variables on dependent variables Competitive pressure had the strongest impact on the use of performance indicators Competitive pressure requires businesses to effectively use resources and assess the performance of managers and departments Therefore, it was reasonable to increase the use of performance estimate indicators to provide administrators with information on the performance of departments and managers The degree of decentralization in the business was associated with giving decisions to inferior managers and evaluating them through performance evaluation criteria Analysis results described that the impact of increased decentralization level on the application of decision-making support techniques was the strongest The level of decentralization increased by point, making the application of decision support techniques increase by 0.864 points This is the strongest impact of the independent variables on the dependent variables The application of IT had a compelling impact on the application of some types of estimates Because estimation requires a lot of calculations, the application of IT has supported a lot of accountants in the calculation and estimation work The interest of manager in management accounting had an influence on the application of management accounting techniques but still uncountable In addition to an insignificant impact on the application of strategic management accounting strategies and operational evaluates indicators, this dependent variation did not affect the application of other management accounting techniques Finally, the professional qualifications of accountants had the strongest impact on the application of strategic management accounting Management accounting techniques has been developed in recent years Currently, there is still no agreement on the definitions and names of these techniques Accordingly, the application of these techniques requires understanding knowledge, application conditions as well as costs and general benefits Therefore, in order to apply strategic management accounting techniques, it is required that accountants must be mastery in these techniques Independent variables Dependent variables Decision support techniques Performance evaluation indicators Competitve Some types of estimates pressure Strategic Management Accounting Techniques to support production Decision support techniques Performance evaluation indicators The degree of Some types of estimates decentralization Strategic Management Accounting Techniques to support production Decision support techniques Performance evaluation indicators IT application Some types of estimates status Strategic Management Accounting Techniques to support production Decision support techniques The interest of Performance evaluation indicators the administrator to Some types of estimates management Strategic Management accounting Accounting Techniques to support production Decision support techniques Performance evaluation indicators Professional qualifications Some types of estimates of accountants Strategic Management Accounting Techniques to support production Standardized Order of beta influence coefficient 0,303 0,824 0,270 0,190 0,263 0,864 0,370 0,234 0,359 0,224 0,220 0,274 0,860 0,351 0,231 0,045 0,084 0,189 0,105 0,183 0,734 - Source: Summary of the author's analysis results Research results in Table 5.4 indicated that: CHAPTER CONCLUSION AND RECOMMENDATIONS 5.1 Conclusion about research findings 5.1.1 Current situation of applying management accounting techniques in enterprises in Northern Vietnam Based on the results of empirical research, the thesis made conclusions about the current situation of low-level applying management accounting in enterprises in the North It also pointed out the causes of the short of techniques and management accounting methods application in enterprises, specifically: Firstly, managers in enterprises in Northern Vietnam are not aware of the significant role of applying management accounting techniques in improving asset efficiency and creating a competitive position for businesses Therefore, the 21 22 mechanism of diffusion and simulation has not been effective Enterprises which are not interested in applying management accounting, have not paid attention to research and learn to apply management accounting techniques in businesses in order to improve the efficiency of economic resource usage and business efficiency Secondly, when the mechanism of diffusion and simulation does not work, it is necessary to push an impact to enforce it However, in Vietnam, enterprises are not required to apply management accounting techniques In addition, due to limited awareness and knowledge of management accounting techniques as well as their effects, some people are not only afraid to change but also intend to prevent this application to protect the stabilization of the system This phenomenon is explained by an institutional theory called “system power" Thirdly, managers in enterprises in Northern Vietnam often use less information provided by accountants to make decisions on business management The executive and decision-making activities of the managers are mainly based on experience The administrators not expertise in management accounting, so they not know that management accounting also has roles and effects in the decision-making process Fourthly, the degree of decentralization in enterprises in Northern Vietnam is also limited, affecting the application of management accounting techniques This happens to companies which have not been decentralized, such as assigned responsibility to the department managers or evaluated the operational efficiency through the operational evaluations indicators They not have any demand for this information to be planned, controlled and evaluated for the effectiveness The activities of enterprises still mainly focus on the overall profit target Fifthly, IT support makes the application of management accounting techniques more convenient Therefore, if the IT provision for management and accounting is still limited, it may affect the application of management accounting techniques in enterprises Sixthly, complete understanding and proficient usage of management accounting techniques of accountants also affects the application status in an enterprise An insufficent understanding of management accounting techniques leading to a situation that the information provided by accountants does not meet the information needs for managers in the decision-making process This restriction has once again affected the role of management accounting in enterprises Finally, cost is also one of the reasons that affect the application of management accounting techniques in enterprises Management accounting techniques are only applied by enterprises if the benefits from these techniques greater than the cost of applying them Some complex management accounting techniques require changing operating habits, changing the organizational structure as long as their expensive price This leads to the problem that these techniques will be less popular and poorly applied in enterprises 5.1.2 Influence of factors on the application of Management Accounting in enterprises in Northern Vietnam Through correlation and regression analysis, the thesis makes conclusions about the impact of some random factors on the application of management accounting techniques in enterprises in Northern Vietnam Management decentralization in enterprises is the most influential factor as well as the most extensive to the application of management accounting techniques in enterprises Professional qualifications of accountants are also factors that strongly influence the application of management accounting techniques The highest IT factors and interest of managers, although not as powerful as the other two factors mentioned above, are also important conditions and premises for the development of management accounting in enterprises 5.2 Some recommendations and solutions 5.2.1 Recommendations According to the research results and analysis of the reasons for the low application of management accounting techniques in enterprises in Northern Vietnam, the author proposes the following recommendations: First, businesses need to strengthen decentralization in enterprises for managers Decentralization is often tied to the responsibilities of managers so it raises the need for information to effectively use resources as well as use assessment factors to encourage employees to operate effectively Secondly, enterprises need to enhance the application of IT to automate the stages in the process of data collection and processing, facilitating the application of advanced management accounting techniques Thirdly, the highest managers in enterprises need to care, support and facilitate more for the management accounting techniques to be deployed and applied in enterprises Fourthly, accounting qualifications must be improved Modern management accounting knowledge updating is a necessary condition which can be applied in businesses for management accounting techniques in general and modern management accounting techniques in particular Fifthly, enterprises need to be aware of increasing competition pressure to strengthen decentralization as well as enhance interest in management accounting Increasing investment in IT, improving professional qualifications for accountants and raising committment to support accountants to apply management accounting techniques and methods would help businesses meet the required information to enhance the competitive position themselves 5.2.2 Solutions to enhance the application of management accounting techniques in Vietnamese enterprises Firstly, organizations supporting enterprises (Development support funds for businesses, Vietnam Chamber of Commerce and Industry, Business clubs ), and accounting professional associations need to reinforce training courses in order to 23 24 foster knowledge for business administrators and accountants in enterprises Accordingly, they should recognize the benefits of applying management accounting techniques and be ready to research and apply them in the process of planning, controlling and evaluating efficiency and decision making Secondly, the government and organizations should support enterprises in organizing training courses, propagating the advantages of management accounting techniques to improve decision-making efficiency, business efficiency and competitiveness capacity Thirdly, the government and organizations should support enterprises to build up and implement projects helping them to apply advanced management methods and management accounting techniques Fourthly, accounting training institutions and professional accounting organizations need to actively propagate the management accounting techniques and guide learners to apply these techniques to real situations of enterprises Instead of teaching how to write accounting books, training programs need to focus on converting knowledge and skills so that learners can successfully apply the management accounting techniques They will be informed about how to collect, process and provide information for decision making progress, and how to design short-term and long-term evaluation indicators in the enterprises, etc Fifthly, instead of focusing on making financial statements and dealing with taxrelated issues, accountants need to actively study and improve management accounting to be able to understand and apply successfully They should adopt the techniques in collecting, processing and providing information to managers in the decision-making process, participating in governance processes and contributing to creating added value for enterprises 5.3 Restrictions and recommendations for follow-up research 5.3.1 Limitations of the study Data collected was in a convenient method; the date could not be gathered according to the stratified random method The collected data mainly concentrated in Hanoi, not yet dispersed evenly in the southern regions of Vietnam Respondents might not understand all the questions or answer them incorrectly There were difficulties in data collection as well as access to previous research works; therefore, incomplete documents collection also, by some means, limited the research results 5.3.2 Suggestions for further studies The effect of factors on the management accounting system in enterprises need further, and more sufficient study in order to provide managers and enterprises with the status of management accounting application as well as the evidence of impact level of these factors Further studies should: - Expand the number of independent variables to fully evaluate the impact of factors on the application of management accounting status - Use a combination of qualitative and quantitative research methods to fully and deeply access the status of factor’s impact on the application of management accounting - Apply the stratified random sampling method to ensure data reliability CONCLUSION In the current competitive and integration environment, management accounting is increasingly becoming an important tool to support businesses to operate effectively Management accounting is a specialized area of accounting to grasp the current situation, especially the financial situation of enterprises Thereby, it helps the enterprise managers to make the best administration decisions Information of Management accounting is particularly important in business operation while control and evaluate that company Therefore, the management accounting application will help Vietnamese enterprises to improve their operational effectiveness The purpose of conducting this research is to appraise the application status of management accounting in enterprises in Northern Vietnam today and assess the impact of these factors on management accounting the application Based on the survey results and quantitative research results, this study demonstrated that the situation of management accounting application in Northern Vietnam enterprises was still relatively underrated; many enterprises were not interested in management accounting development Traditional management accounting techniques were mainly applied while modern ones were still rarely adopted Research results also showed that decentralization, application of IT and professional qualifications of accountants were factors that affected the application of management accounting techniques in enterprises Based on the research results, the author made some recommendations for enterprises to enhance the application of management accounting At the same time, due to the limitations of research, there were some directions for further research ... the application of management accounting There are five factors influencing the application of management accounting consisting of (1) Competition, (2) Decentralization in the company, (3) the application. .. Characteristics of surveyed companies CHAPTER FINDINGS AND DISCUSSION 4.2 Status of the application of Management Accounting in Northern Vietnam enterprises Findings demonstrate the status of the application. .. impact on the application of management accounting techniques Hypothesis H2: Decentralization in enterprises had a positive influence on the application of management accounting techniques .in enterprises