Asian Review of AccountingStyle of information usage and use of accounting information: a Malaysian studyNor Azrina bt Mohd Yusof @ Ghani Wee Shu Hui Ibrahim Kamal Abdul Rahman Normah Omar Shah AlamMichael S.C. Tse

Article information:To cite this document:Nor Azrina bt Mohd Yusof @ Ghani Wee Shu Hui Ibrahim Kamal Abdul Rahman Normah Omar Shah AlamMichael S.C. Tse, (2012),"Style of information usage and use of accounting information: a Malaysian study",Asian Review of Accounting, Vol. 20 Iss 1 pp. 20 - 33Permanent link to this document:http://dx.doi.org/10.1108/13217341211224709

Downloaded on: 19 August 2015, At: 02:08 (PT)References: this document contains references to 29 other documents.To copy this document: permissions@emeraldinsight.comThe fulltext of this document has been downloaded 1152 times since 2012*

Users who downloaded this article also downloaded:Vinal Mistry, Umesh Sharma, Mary Low, (2014),"Management accountants' perception of their role inaccounting for sustainable development: An exploratory study", Pacific Accounting Review, Vol. 26 Iss 1/2pp. 112-133 http://dx.doi.org/10.1108/PAR-06-2013-0052Hsueh-Ju Chen, Shaio Yan Huang, An-An Chiu, Fu-Chuan Pai, (2012),"The ERP system impact onthe role of accountants", Industrial Management & Data Systems, Vol. 112 Iss 1 pp. 83-101 http://dx.doi.org/10.1108/02635571211193653Ram S. Sriram, (1995),"Accounting information system issues of FMS", Integrated Manufacturing Systems,Vol. 6 Iss 1 pp. 35-40 http://dx.doi.org/10.1108/09576069510076153

Access to this document was granted through an Emerald subscription provided by emerald-srm:376953 []

For AuthorsIf you would like to write for this, or any other Emerald publication, then please use our Emerald forAuthors service information about how to choose which publication to write for and submission guidelinesare available for all. Please visit www.emeraldinsight.com/authors for more information.

About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The companymanages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well asproviding an extensive range of online products and additional customer resources and services.

Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committeeon Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archivepreservation.

*Related content and download information correct at time of download.

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

Style of information usage anduse of accounting information:

a Malaysian studyNor Azrina bt Mohd Yusof @ Ghani

Faculty of Accountancy, Universiti Teknologi MARA, Shah Alam, Malaysia

Wee Shu Hui, Ibrahim Kamal Abdul Rahman andNormah Omar Shah Alam

Accounting Research Institute and Faculty of Accountancy,Universiti Teknologi MARA, Shah Alam, Malaysia, and

Michael S.C. TseSchool of Accounting, Economics and Finance, Deakin University,

Burwood, Australia

Abstract

Purpose – Since the 1990s, there has been a growing interest in style of information usage. However,most studies on style of information usage are conducted in developed countries. There is limitedresearch on style of information usage in developing countries. The purpose of this paper is to fill thegap in the existing literature by examining relationships between style of information usage and use offinancial and non-financial information in Malaysia.Design/methodology/approach – The authors adopted a survey method, for which a writtenquestionnaire was prepared and mailed out to companies in Kuala Lumpur, Selangor, Terengganu andPulau Pinang.Findings – Findings of the study show that diagnostic style of information usage is positivelyassociated with use of financial information, while interactive style of information usage is positivelyassociated with use of non-financial information. Further analysis on types of non-financialinformation used by managers who adopt interactive style of information usage reveals that customer-related non-financial information such as quality, customer satisfaction and flexibility play a moreimportant role in their decision-making processes.Originality/value – The paper provides insights into relationships between style of informationusage on and use of accounting information in developing countries. Findings of the study can beapplied to assist management accountants in meeting managers’ information requirements.

Keywords Malaysia, Developing countries, Decision making, Information, Usage, Managers,Accountants, Financial information, Non-financial information

Paper type Research paper

1. IntroductionEffective use of accounting information in decision making is essential to the survivalof business organizations in a highly competitive environment (Henri, 2006). Theimportance of accounting information for managers is extensively documented in priorstudies (Bruns and McKinnon, 1998; Pierce and O’Dea, 2003; Choe, 2004; Williams,2004; Anwar and Tuqan, 2006; Gaidiene and Skyrius, 2006). Prior studies identify twodistinctive styles of information usage, namely, diagnostic and interactive (Simons,1990; Abernethy and Brownell, 1999; Naranjo-Gil and Hartmann, 2007). Since the1990s, there has been a growing interest in styles of information usage (Tuomela, 2005;Henri, 2006). However, most studies on styles of information usage have been

The current issue and full text archive of this journal is available atwww.emeraldinsight.com/1321-7348.htm

Asian Review of AccountingVol. 20 No. 1, 2012pp. 20-33r Emerald Group Publishing Limited1321-7348DOI 10.1108/13217341211224709

20

ARA20,1

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

conducted in developed countries like USA and Australia. To date, there has beenlimited research on styles of information usage in developing countries.

This paper presents a study on the relationships between the style of informationusage and the use of financial and non-financial information in Malaysia. Due toinstitutional and cultural factors, the adoption and use of management accountingtechniques in developing countries often differ from those in developed countries( Joshi, 2001; Sulaiman et al., 2004). Therefore, research on management accountingpractices in developing countries can potentially provide new insights into issues thathave already been studied in the context of developed countries. The objective of thestudy is to fill the gap in the existing literature by examining the effects of the style ofinformation usage on Malaysian managers. Findings of the study show that adiagnostic style of information usage is positively associated with the use of financialinformation, while an interactive style of information usage is positively associatedwith use of non-financial information.

The remainder of this paper is organized as follows. The hypotheses of the study aredeveloped in Section two. Section three outlines the research methodology of thestudy. The findings of the study are presented in Section four, and concluding remarksare made in Section five.

2. Theoretical development2.1 Use of accounting informationManagers use accounting information to assist them in planning, control andevaluation of operating performance (Choe, 2004). Accounting information can bebroadly classified into two categories, namely, financial information and non-financialinformation. All financial information is quantitative in nature whereas non-financialinformation includes both quantitative and qualitative information (Bruns andMcKinnon, 1998; Kaplan and Norton, 1996; Azleen and Mohd Zulkeflee, 2007).Different types of accounting information are used in decision-making processes(Mia and Patiar, 2001; Naranjo-Gil and Hartmann, 2007; Tse and Gong, 2009),depending on the managers’ backgrounds and the nature of the decisions andproblems they are facing. Managers may also use financial and non-financialinformation concurrently (Kaplan and Norton, 1996).

2.2 Style of information usageAccording to their different needs, and the available resources and competencies,managers use accounting information in different ways ( Jais, 2007). Simons (1990,1995) suggests that accounting information can be used in two distinctive ways. First,accounting information can be used as the basis of diagnostic controls (diagnosticstyle). Managers regularly compare information on actual financial and/ornon-financial performance with preset standards to identify deviations fromorganizational plans (Henri, 2006; Naranjo-Gil and Hartmann, 2007). Alternatively,accounting information can be used to facilitate interactions between members oforganizations (interactive style). Managers also use accounting information tostimulate learning and identify new opportunities (Simons, 1995).

Different styles of information usage have direct implications on managers’behaviour. The adoption of a diagnostic style of information usage directs seniormanagers’ attention towards the achievement of planned outcomes. They pay lessattention to the means adopted by lower-level managers for achieving the outcomes(Simons, 1995). Most discussions on organizational outcomes are in the form of formal

21

Style ofinformation

usage

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

reviews and are conducted at the end of set operating periods. Exchanges ofaccounting information within operating periods are limited (Naranjo-Gil andHartmann, 2007). When an interactive style of information usage is adopted bymanagers, continuous exchanges of information occur between organizationalmembers (Abernethy and Brownell, 1999). Discussions on organizational outcomescan be held at any time and tend to be less formal (Simons, 1995; Naranjo-Gil andHartmann, 2007).

2.3 Style of information usage and use of accounting informationThe adoption of a particular style of information usage has direct implications onmanagers’ preferences over different types of accounting information. Findings ofNaranjo-Gil and Hartmann (2007) show that managers who adopt an interactive styleof information usage prefer to use non-financial information in their decision-makingprocesses, while managers who adopt a diagnostic style of information usage have astronger preference for the use of financial information in decision making.

Styles of information usage also influence managers’ use of different types ofaccounting information indirectly through their mutual relationships with decisionproblems. The relative importance of each type of accounting information to managersvaries when they face different types of decision problems (Bhimani and Langfield-Smith, 2007; Maksoud et al., 2010; Tse, 2011). Financial information traditionallyplays a key role in structural decision problems such as the evaluation oforganizational performance (Tuomela, 2005). For unstructured decision problems likethe identification of new business opportunities, non-financial information isconsidered more useful, as it enables managers to discover tacit knowledge andmakes it explicit (Vaivio, 2004). Meanwhile, the suitability of different styles ofinformation usage to managers varies according to the types of decision problems theyface. A diagnostic style of information usage is suitable for addressing routine,structural decision problems like the evaluation of organizational performance and thedetermination of subordinates’ rewards (Bhimani and Langfield-Smith, 2007; Ferreiraand Otley, 2009). In comparison, an interactive style of information usage is moresuitable for addressing unstructured decision problems (Simons, 1995). Thus, theadoption of a diagnostic style of information usage is associated with the use offinancial information through linkages to the structured decision problems. Similarly,adoption of an interactive style of information usage is associated with the use of non-financial information through linkages to unstructured decision problems.

Based on the above arguments, the following hypotheses are developed:

H1. Diagnostic style of information usage is positively associated with use offinancial information.

H2. Interactive style of information usage is positively associated with use ofnon-financial information.

3. Research methodology3.1 Data collectionThis study adopted a survey method in which a written questionnaire was preparedand mailed out to potential respondents. After official approval was obtained forthe study, the questionnaire was first sent to accounting academics in Malaysia to testthe validity of the questions. The questionnaire was then mailed out to the sample

22

ARA20,1

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

companies. A cover letter stating the purpose of the study, written instructions for thecompletion of the questionnaire, and a self-addressed envelope were sent together withthe questionnaire. The potential respondents were given a period of four weeks tocomplete the questionnaire. After two weeks, follow-up calls were made to all potentialrespondents, either to encourage their participation or to thank them for theirparticipation.

The selection of the sample in this study was based on purposive sampling. Toimprove the response rate, distribution of the questionnaire was limited to companiesthat were more likely to respond. The questionnaire was sent to 45 companies in KualaLumpur, Selangor, Terengganu and Pulau Pinang where the researchers had personalcontacts. Responses were received from 40 companies, constituting a response rateof 89 per cent. As shown in Table I, half of the responding companies were in trading/service industry (n¼ 20), 70 per cent of the responding companies were largecompanies (n¼ 28), and 25 per cent of them were listed at Bursa Malaysia (n¼ 7).

Individual respondents were asked to indicate their positions and work experiencesin the questionnaire. A total of 62.5 per cent of respondents identified themselves asmanagers (n¼ 25), while the others identified themselves as accountants (n¼ 15).A total of 84 per cent of the respondents who identified themselves as managers hadheld their positions for less than ten years (n¼ 21), whereas all respondents whoidentified themselves as accountants had held their positions for less than ten years.

3.2 Measurement of variablesThe measurement of the dependent variable, use of accounting information, was basedon the reported use of 30 items of accounting information in decision making. Therewere five items of financial information and 25 items of non-financial information inthe questionnaire. A five-point Likert scale was adopted and the scale ranged from “1”(not at all) to “5” (to a great extent). The same five-point Likert scale was also adoptedfor the measurement of the independent variable, style of information usage. The styleof information usage was measured by 12 items on ways that accounting informationwas used. A total of 11 out of the 12 items were adapted from Henri (2006).

Before performing the data analysis, multicollinearity and the normality of the datawere tested. As shown in Table II, the two styles of information usage had only amoderate positive correlation (r¼ 0.547, po0.01) to each other. In addition, toleranceand VIF for the two styles of information usage were 0.701 and 1.426, respectively.The normality of the data was tested with the Kolmogorov-Smirnov statistic withLilliefors significance level and the Shapiro-Wilk statistic. All data were found to benormally distributed at a significance level of 5 per cent. Findings of the tests showed

Size of companiesIndustry Large (%) SME (%) Total

Consumer products 5 17.9 1 8.3 6Industrial products 2 7.1 0 0.0 2Trading/services 13 46.4 7 58.3 20Finance 2 7.1 1 8.3 3Technology 3 10.7 1 8.3 4Property 0 0.0 1 8.3 1Others 3 10.7 1 8.3 4

Table I.Information on

responding companies

23

Style ofinformation

usage

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

that the data satisfied the assumptions of a standard regression model with nomulticollinearity.

4. Findings4.1 Test of hypothesesThe hypotheses of this study were tested with standard multiple regression analysis.In this study, H1 hypothesizes that a diagnostic style of information usage is positivelyassociated with use of financial information. The following regression equation is usedto test the hypothesis:

Uf ¼ b0 þ b1�DSþ b2�ISþ e

where, Uf represents use of financial information; DS represents diagnostic style ofinformation usage; IS represents interactive style of information usage; e represents anerror term.

Table III shows the result of a regression analysis with the use of financialinformation as a dependent variable. The two independent variables (diagnostic styleand interactive style) explain 36.7 per cent of the variance (R2) in financial informationuse. The F-value of the function is 10.375, po0.05. An examination of the t-valuesindicates that the relationship between diagnostic style and use of financialinformation is positive and significant (b¼ 0.648, t¼ 4.15, po0.05). This indicates thatmanagers who adopt a diagnostic style tend to use more financial information. Assuch, H1 is supported. This finding is consistent with prior literature (Tuomela, 2005;Naranjo-Gil and Hartmann, 2007; Mohamed et al., 2009, 2010a, b).

To test the relationship between an interactive style of information usage andthe use of non-financial information, another regression analysis is performed.The following regression equation is used to test the hypothesis:

Un ¼ b0 þ b1�DSþ b2�ISþ e

VariableDiagnostic

styleInteractive

styleFinancial

informationNon-financialinformation

Diagnostic style 1.00Interactive style 0.547** 1.00Financial information 0.602** �0.270* 1.00Non-financialinformation �0.218 0.532** �0.519** 1.00

Note: *Significant at 0.05 level (one-tailed); **significant at 0.01 level (one-tailed)

Table II.Pearson correlation matrixfor styles of informationusage and use ofaccounting information

B SE b t p-value

b0 0.003 0.163 0.017 0.986DS 0.631 0.152 0.648 4.150 0.000IS 0.020 0.038 0.085 0.591 0.723

Note: R¼ 0.606, R2¼ 0.367, F¼ 10.735, po0.05

Table III.Results of multipleregression analysis withuse of financialinformation as thedependent variable

24

ARA20,1

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

where, Un represents use of non-financial information; DS represents diagnostic styleof information usage; IS represents interactive style of information usage; e representsan error term.

The result of a regression analysis with the use of non-financial information as adependent variable is presented in Table IV. The result of the regression analysisshows that the two styles of information usage as independent variables explain29 per cent of the variance (R2) in non-financial information use. The F-value of thefunction is 7.568, po0.05. An examination of the t-values indicates that managers whoadopt an interactive style tend to use non-financial information (b¼ 0.588, t¼ 3.557,po0.05). This finding provides support to H2 and the results of Naranjo-Gil andHartmann (2007) and Mohamed et al. (2009, 2010a, b). Managers who adopt aninteractive style of information usage prefer to involve directly with subordinatesthrough discussions and dialogue.

4.2 Use of non-financial information by adopters of an interactive styleGiven the large variety of available non-financial information, it would be interesting toidentify the types of non-financial information that managers who adopt an interactivestyle prefer to use. To identify the types of non-financial information preferred bymanagers who adopt the interactive style, a multiple (stepwise) regression isconducted. The 25 items of non-financial information in the questionnaire are groupedinto five categories, namely, quality, flexibility, resource utilization, customersatisfaction, and innovation and learning. Table V shows the result for this stepwiseregression. Two types of non-financial information, resource utilization and innovationand learning, fail to meet the selection criteria as their p-values are greater than 0.05.

B SE b t p-value

b0 1.188 0.724 1.544 0.131DS 0.424 0.677 0.104 0.626 0.535IS 0.585 0.167 0.588 3.557 0.001

Note: R¼ 0.539, R2¼ 0.29, F¼ 7.568, po0.05

Table IV.Results of multiple

regression analysis withnon-financial informationas the dependent variable

Model B SE b t p-value

1 (Constant) 2.156 0.361 5.970 0.000Quality 0.447 0.106 0.566 4.228 0.000

2 (Constant) 1.534 0.442 3.469 0.000Quality 0.288 0.123 0.364 2.331 0.025Customer satisfaction 0.318 0.142 0.348 2.232 0.032

3 (Constant) 1.725 0.432 3.990 0.000Quality 0.400 0.129 0.505 3.090 0.004Customer satisfaction 0.501 0.161 0.549 3.105 0.004Flexibility �0.336 0.159 �0.399 �2.115 0.041

Notes: Model 1: R¼ 0.566, R2¼ 0.320, F¼ 17.874, po0.05; Model 2: R¼ 0.633, R2¼ 0.401, F¼ 12.265,po0.05; Model 3: R¼ 0.683, R2¼ 0.467, F¼ 10.508, po0.05

Table V.Results of stepwise

multiple regressions forpredicting the use of

non-financial informationby managers who adopt

an interactive style

25

Style ofinformation

usage

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

The results suggest that a model including the other three types of non-financialinformation is the best predictors of the interactive style of the use of non-financialinformation. The F-value of the model is 10.508 (po0.05). The three types ofnon-financial information explain 46.7 per cent of the variance (R2) in an interactivestyle of information usage and the t-value of the model is highly significant (po0.05).This finding shows that managers who adopt an interactive style prefer to usecustomer-related non-financial information (quality, customer satisfaction, flexibility)in decision making. This finding is consistent with the view that managers shouldfocus on limited sets of key success factors that are critical to their organizations’ long-term competitive success (Ferreira and Otley, 2009).

The findings of this study should be examined in conjunction with its limitations.The key limitation of this study is the selection of sample companies. The use of apurposive sampling method enables the researchers to achieve a high response rate.However, it may constitute a threat to the external validity of findings as othernon-sampling companies may have different views on the use of accountinginformation in decision making. This potential threat to external validity is partlymitigated by a high response rate from respondents and the normality of the data.

Notwithstanding its limitations, this study provides valuable insights intorelationships between the style of information usage and the use of accountinginformation in developing countries. The findings of the study show that the style ofinformation usage is relevant in developing countries. The relationships between thetwo styles of information usage and managers’ use of financial and non-financialinformation are similar in developing and developed countries.

5. ConclusionThis paper presents a study on the relationships between the two styles of informationusage and the use of financial and non-financial information in Malaysia. The findingsof the study provide positive support for the two conjectured hypotheses, and areconsistent with the findings of prior studies that are based on data from developedcountries. As suggested in Naranjo-Gil and Hartmann (2007), managers who adopt adiagnostic style behave like an “answer machine”. Given their conservative mind andstyle, they tend to rely on financial information produced by their subordinates formaking decisions. In contrast, managers who adopt an interactive style behave like a“learning machine”. They believe that information gathered via the voices of people ismore relevant to the creation and maintenance of competitive advantage. Furtheranalysis on the types of non-financial information used by managers who adoptan interactive style of information usage reveals that managers pay more attention tocertain non-financial information. Customer-related non-financial information such asquality, customer satisfaction and flexibility play a more important role in thosemanagers’ decision-making processes.

The findings of the study can be applied to assist organizations in meetingmanagers’ information requirements. Due to human cognitive capacity constraints,managers’ abilities to use information in decision making decrease when they receiveexcessive information (Birnberg et al., 2007). Therefore, it is preferable to presentselected information to managers rather than simply provide them with all theavailable information. As discussed above, managers prefer to use different types ofaccounting information when they adopt different styles of information usage. Thus,presenting different sets of accounting information to managers who adopt differentstyles of information usage enables managers to use the information more effectively.

26

ARA20,1

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

The adoption of integrated information systems such as enterprise resource planning(ERP) systems, facilitate the presentation of different sets of information to differentmanagers by improving flexibility in information provision (Spathis and Ananiadis,2005). When organizations elect to present different sets of accounting information todifferent managers, the management accountants will be responsible for the selectionof the information presented to managers. In such cases, knowledge of the managers’styles of information usage and their relationships to the managers’ use of accountinginformation can help the management accountants to select the appropriateinformation for presentation to the managers.

References

Abernethy, M.A. and Brownell, P. (1999), “The role of budgets in organizations facing strategicchange: an exploratory study”, Accounting, Organizations and Society, Vol. 24 No. 3,pp. 189-204.

Anwar, M.A. and Tuqan, A. (2006), “Information needs and use in the construction materialssector in Kuwait”, The Electronic Library, Vol. 24 No. 3, pp. 335-46.

Azleen, I. and Mohd Zulkeflee, A.R. (2007), “Reviewing managing through performancemeasurement”, Labuan E-Journal of Muamalat and Society, Vol. 1, pp. 56-72.

Bhimani, A. and Langfield-Smith, K. (2007), “Structure, formality and the importance of financialand non-financial information in strategy development and implementation”,Management Accounting Research, Vol. 18 No. 1, pp. 3-31.

Birnberg, J.G., Luft, J. and Shield, M.D. (2007), “Psychology theory in management accountingresearch”, in Chapman, C.S., Hopwood, A.G. and Shield, M.D. (Eds), Handbook ofManagement Accounting Research, Vol. 1, Elsevier, Oxford, pp. 113-36.

Bruns, W.J. and McKinnon, S.M. (1998), “Information and managers: a field study”, Journal ofManagement Accounting Research, Vol. 5, pp. 84-108.

Choe, J.M. (2004), “The relationships among management accounting information, organizationallearning and production performance”, Journal of Strategic Information System, Vol. 13No. 1, pp. 61-85.

Ferreira, A. and Otley, D. (2009), “The design and use of management control systems: anextended framework for analysis”, Management Accounting Research, Vol. 20 No. 4,pp. 263-82.

Gaidiene, Z. and Skyrius, R. (2006), “The usefulness of management accounting information:user’ attitudes”, Ekonomika, Vol. 74, pp. 21-37.

Henri, J.F. (2006), “Management control systems and strategy: a resource-based perspective”,Accounting, Organizations and Society, Vol. 31 No. 6, pp. 529-58.

Jais, S. (2007), The Successful Use of Information in Multinational Companies: An ExploratoryStudy of Individual Outcomes and the Influence of National Culture, Gabler EditionWissenschaft, Wiesbaden.

Joshi, P.L. (2001), “The international diffusion of new management accounting practices: thecase of India”, Journal of International Accounting, Auditing and Taxation, Vol. 10 No. 1,pp. 85-109.

Kaplan, R.S. and Norton, D.P. (1996), “Using the balance scorecard as a strategic managementsystem”, Harvard Business Review, Vol. 74 No. 1, pp. 1-13.

Maksoud, A.A., Cerbioni, F., Ricceri, F. and Velayutham, S. (2010), “Employee morale, non-financial performance measures, deployment of innovative managerial practices andshop-floor involvement in Italian manufacturing firms”, The British Accounting Review,Vol. 42 No. 1, pp. 36-55.

27

Style ofinformation

usage

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

Mia, L. and Patiar, A. (2001), “The use of management accounting systems in hotels: anexploratory study”, International Journal of Hospitality Management, Vol. 20 No. 2,pp. 111-28.

Mohamed, R., Wee, S.H., Abdul Rahman, I.K. and Abdul Aziz, R. (2009), “Strategic performancemeasurement system design and organisational capabilities: using levers of controlframework”, Asia-Pacific Management Accounting Journal, Vol. 4 No. 1, pp. 35-64.

Mohamed, R., Wee, S.H., Abdul Rahman, I.K. and Abdul Aziz, R. (2010a), “Strategic performancemeasurement system, organisation capabilities and competitive advantage”, Asian Journalof Accounting and Governance, Vol. 1, pp. 27-50.

Mohamed, R., Wee, S.H., Abdul Rahman, I.K. and Abdul Aziz, R. (2010b), “The relationshipbetween strategic performance measurement systems and organisational competitiveadvantage”, Asia-Pacific Management Accounting Journal, Vol. 5 No. 1, pp. 1-20.

Naranjo-Gil, D. and Hartmann, F. (2007), “How CEOs use management accounting systems forstrategy implementation in hospitals”, Health Policy, Vol. 81 No. 1, pp. 29-41.

Pierce, B. and O’Dea, T. (2003), “Management accounting information and the needs of managers:perceptions of managers and accountants compared”, The British Accounting Review,Vol. 35 No. 3, pp. 257-90.

Simons, R. (1990), “The role of management control systems in creating competitiveadvantage: new perspectives”, Accounting, Organization and Society, Vol. 15 Nos 1-2,pp. 127-43.

Simons, R. (1995), Levers of Control: How Managers Use Innovative Control Systems to DriveStrategic Renewal, Harvard Business School Press, Boston.

Spathis, C. and Ananiadis, J. (2005), “Assessing the benefits of using an enterprise systemin accounting information and management”, Journal of Enterprise InformationManagement, Vol. 18 No. 2, pp. 195-210.

Sulaiman, M., Ahmad, N. and Alwi, N. (2004), “Management accounting practices in selectedAsian countries: a review of the literature”, Managerial Auditing Journal, Vol. 19 No. 4,pp. 493-508.

Tse, M. (2011), “Antecedents and consequences of cost information usage in decision making”,Advances in Management Accounting, Vol. 19, pp. 205-23.

Tse, M. and Gong, M. (2009), “Recognition of idle resources in time-driven activity-based costingand resource consumption accounting models”, Journal of Applied ManagementAccounting Research, Vol. 7 No. 2, pp. 41-54.

Tuomela, T. (2005), “The interplay of different levers of control: a case study of introducing anew performance measurement system”, Management Accounting Research, Vol. 16 No. 3,pp. 293-320.

Vaivio, J. (2004), “Mobilizing local knowledge ‘provocative’ non-financial measures”, EuropeanAccounting Review, Vol. 13 No. 1, pp. 39-71.

Williams, S. (2004), “Delivering strategic business value: business intelligence can helpmanagement accounting reclaim its relevance and rightful role”, Strategic Finance, Vol. 86No. 2, pp. 41-8.

28

ARA20,1

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

Appendix. Survey questions

Section A: General information

1. What is your position within the organization? _________________________ (e.g. management accountants, senior group financial director, accountant, etc.)

2. How many years have you been in the position? _________________________

3. How many years have you been working for the organization? _______________

4. What is the total number of employees in your organization? ________________

5. What is your average annual sales revenue (million) in the past three years? (a) Less than RM50m(b) Between RM51 – RM150m(c) Between RM151 – RM250m(d) Between RM251 – RM350m(e) Between RM351 – RM450m

6. What is your average annual profit before tax (million) in the past three years? (a) Less than RM5m(b) Between RM5 – RM25(c) Between RM26 – RM45m(d) Between RM46 – RM65m(e) Between RM66 – RM85m

7. Which industry best describes your organization? Please tick your answer (√).(a) Consumer products (b) Industrial products(c) Trading/services(d) Finance

8. What is your organization major activity?

Manufacturing [ ] Services [ ]

9. My company is: Listed in Bursa Malaysia [ ] Not listed [ ]

(f) Between RM451– RM550m(g) Between RM551– RM650m(h) Between RM651– RM750m(i) Between RM651– RM750m(j) Above RM850m

(f) Between RM86 – RM105m(g) Between RM106 – RM125m(h) Between RM126 – RM145m(i) Between RM146 – RM165m(j) Above RM165m

(e) Technology(f) Properties(g) Construction(h) Other(specify)______________

[ ][ ][ ][ ][ ]

[ ][ ]

[ ][ ][ ]

[ ][ ][ ][ ][ ]

[ ][ ][ ][ ][ ]

[ ][ ][ ][ ] [ ]

[ ][ ][ ]

.

29

Style ofinformation

usage

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

Section B: Management Accounting use

The following questions ask for your opinion on why manager uses MA information. Pleaseindicate the extent to which your manager currently uses MA information.

Not atall

To a little extent

Tosomeextent

To a considerable extent

To a great extent

1 Track progress towards goals 1 2 3 4 52 Monitor result 1 2 3 4 53 Compare outcomes to

expectations1 2 3 4 5

4 Review key measures 1 2 3 4 55 Enable discussion in meetings of

superiors, subordinates and peers 1 2 3 4 5

6 Enable continual challenge and debate underlying data, assumptions and action plans

1 2 3 4 5

7 Provide a common view of the organization

1 2 3 4 5

8 Tie the organization together 1 2 3 4 59 Enable the organization to focus

on common issues 1 2 3 4 5

10 Enable the organization to focus on critical success

1 2 3 4 5

11 Develop a common vocabulary in the organization

1 2 3 4 5

12 Make sense of the goals and strategy through dialogue/ discussions

1 2 3 4 5

Please comment on items that may not be in the list above. ________________________________________________________________________________________________________________________________________

.

30

ARA20,1

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

Section C: Financial and Non-financial use

The following questions refer to the use of management accounting information. Please indicatethe extent to which your company currently uses the following information in decision-makingand performance evaluation:

Not atall

To a little extent

Tosomeextent

To a considerable extent

To a great extent

1 Operating income 1 2 3 4 52 Sales growth 1 2 3 4 53 Return on investment 1 2 3 4 54 Account receivable turnover 1 2 3 4 55 Total net cashflow 1 2 3 4 56 Cost of quality 1 2 3 4 57 Supplier certification 1 2 3 4 58 Hours of employee training 1 2 3 4 59 Hours of preventive maintenance 1 2 3 4 5

10 Cost reduction resulting from quality products

1 2 3 4 5

11 Reduction in cycle time of producing 1 2 3 4 512 Number of customers lost due to failure

to meet demand 1 2 3 4 5

13 Customer satisfaction 1 2 3 4 514 Average time taken to respond to

customers 1 2 3 4 5

15 Number of different products/services delivered

1 2 3 4 5

16 Total costs per customer services delivered

1 2 3 4 5

17 Revenue per employee 1 2 3 4 518 Value-added person 1 2 3 4 519 Absentee rates 1 2 3 4 520 Training hours per employee 1 2 3 4 521 Market share of main products/

services 1 2 3 4 5

.22 Number of new customers 1 2 3 4 523 On-time delivery percentage 1 2 3 4 524 Number of customers’ complaints 1 2 3 4 525 Survey of customer satisfaction 1 2 3 4 526 Number of new services/products

launched 1 2 3 4 5

27 Time to market for new products/ 1 2 3 4 5services

28 Per cent of sales from new products 1 2 3 4 529 Employees satisfaction rating 1 2 3 4 530 Employee turnover percentage 1 2 3 4 5

31

Style ofinformation

usage

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

About the authors

Nor Azrina bt Mohd Yusof @ Ghani obtained her first degree in Accountancy fromUniversiti Teknologi Mara. She then pursued her Master’s in Accountancy from UniversitiTeknologi Mara. Her working experience includes time as an account executive, a part-timelecturer at Universiti Teknologi Mara and as a tutor at the Open University of Malaysia (OUM).Currently, she is a Doctoral candidate in the Faculty of Accountancy, Universiti TeknologiMara Shah Alam.

Associate Professor Dr Wee Shu Hui is currently a Research Fellow with the AccountingResearch Institute, and is also a teaching staff of the Faculty of Accountancy, UniversityTeknologi MARA, Malaysia. She has been an academician for over 20 years and her main area ofresearch interests covers management accounting, strategic performance measurement systemsand cost effectiveness. She enjoys researching, is an active researcher, has led numerous researchand consultancy projects and is currently spearheading an international research project.She has written several books on management accounting and published her research findingsin refereed and indexed journals. Shu Hui is Asia-Pacific Management Accounting Journal

(APMAJ) administrator, and is the secretary of Asia-Pacific Management AccountingAssociation (APMAA). Also, she is an assessor with the National Award for ManagementAccounting (NAfMA).

Ibrahim Kamal Abdul Rahman was the Dean of the Faculty of Accountancy forabout 11 years. His career with UiTM started in 1982 as Course Tutor. He obtained hisPhD from the University of Hull, UK and he also holds an MBA from Western IllinoisUniversity, USA. He is a full member of CPA (Australia) and a Chartered Accountant,Malaysia Institute of Accountants (MIA). Among his academic activities is involvement in variousresearch activities at national and international levels, publications of articles in nationaland international refereed journals. He is also a founding member of the National Award forManagement Accounting Best Practice (NAFMA), a UiTM collaboration with MIA, CIMA, NPC,Public Bank and Akauntan Negara Malaysia. He is also Council Member of MIA (2006-2009),Professional Accountants in Business Committee, Accreditation Committee and DisciplinaryCommittee.

Normah Omar Shah Alam is a Professor in Management Accounting and CorporateGovernance. Currently she is the Director of the Accounting Research Institute (ARI), which isone of Malaysia’s six centres of excellence recognized and funded by the Ministry ofHigher Education, Malaysia. Basically she focuses her research interest in three areas, namely,management accounting, forensic accounting and financial criminology. As a proponentof applied research, she has completed a lot of collaborative works with governmentagencies, professional bodies, regulators, non-government organizations and the corporatesectors. To mention a few, she has successfully completed research projects such as DevelopingFraud Risk Indicators in the Audit of Financial Statement, Bank Frauds throughthe Use of Cheques and Credit Cards, Anti Money Laundering and Anti TerrorismFinancing in Financial Institutions, Management Accounting Practices Asia (CIMA Malaysia& Japanese Society of Management Accounting), Japanese Management Accounting in theAutomobile Industry (Japanese Society for the Promotion of Science JSPS), CorporateGovernance Reporting (with MICG & RAM) and National Award for ManagementAccounting – NAfMA (CIMA and Malaysian Institute of Accountants). Currently she isheading one of IIM’s collaborative research projects on Corporate Integrity Framework.To date, she is editor of seven international refereed journals and is also the VicePresident and founding committee member of the Asia-Pacific Management AccountingAssociation (APMAA) which is based in Japan.

32

ARA20,1

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)

Michael S.C. Tse is a Lecturer in Accounting at Deakin University, Australia. His researchinterests include management accounting, information systems and higher education. He is aformer co-editor of the Journal of Internet Business and serves as an ad hoc reviewer for severalinternational journals. He is also the vice president of the Institute of Certified ManagementAccountants, Australia. Michael S.C. Tse is the corresponding author and can be contacted at:michael.tse@deakin.edu.au

To purchase reprints of this article please e-mail: reprints@emeraldinsight.comOr visit our web site for further details: www.emeraldinsight.com/reprints

33

Style ofinformation

usage

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

AL

AY

A A

t 02:

08 1

9 A

ugus

t 201

5 (P

T)