FACTORS AFFECTING THE USE OF MANAGEMENT ACCOUNTING AT PUBLIC UNITS ON THE AREA OF HO CHI MINH CITY45453

FACTORS AFFECTING THE USE OF MANAGEMENT ACCOUNTING AT PUBLIC UNITS ON THE AREA OF HO CHI MINH CITY Pham Ngoc Toan 1* , Le Thi My Nuong 2 1 School of Accounting, University of Economics

FACTORS AFFECTING THE USE OF MANAGEMENT ACCOUNTING AT

PUBLIC UNITS ON THE AREA OF HO CHI MINH CITY

Pham Ngoc Toan 1* , Le Thi My Nuong 2

1 School of Accounting, University of Economics Ho Chi Minh city

2 School of Accounting and Finance, Ho Chi Minh city Industry and Trade College

ABSTRACT

In fact, for public units management accounting is still quite new, not yet used

in a way synchronous and scientific, besides, managers are still not aware of the importance of management accounting, have not invested the cost to organize and apply this system at the units While the management accounting system plays a very important role in providing quality information, suitable for management and decision making of managers

By using a mixed research method in which qualitative research methods combined with quantitative research methods, research results show the factors affecting the use of management accounting at the Public units of Ho Chi Minh City include: Leadership awareness; Organization size; Organizational structure; IT applications; Professional qualifications of accountants; The cost

of organizing a management accounting system Finally, the study proposes recommendations related to each factor to improve the effectiveness of applying management accounting at public units of the Ho Chi Minh City

Keywords: Factors affecting, Management accounting, Public units.

1 INTRODUCTION

Currently, the mechanism of operation, financial mechanism in public units facilities

in the whole country in general and Ho Chi Minh City in particular has gradually been reformed towards increasing autonomy and responsibility, thereby , creating many challenges in financial management In addition, current risks and potential risks arising from internal units or external factors also negatively affect the performance and management efficiency of this public unit Therefore, public units of the Ho Chi Minh City want to survive and develop, need to develop and apply more appropriate management tools, one of which is to apply management accounting, thereby

*Corresponding author.

Email address: toanch10@yahoo.com

helping the unit achieve its goals through planning, evaluating, managing and controlling management quality and quality of services at the public units and making management decisions suitable to ensure the best use of the unit's resources

This study was conducted to identify and measure the impact of factors on the use of management accounting at public units of the Ho Chi Minh City From the research results, 6 factors affecting the use of management accounting at public units in the Ho Chi Minh City, in which the organizational structure has the most impact and Accounting staff qualifications have the lowest impact on the dependent variable, the independent variables explain 55.2% of the variation of the dependent variable, show that these factors are suitable for research context is public units of the Ho Chi Minh City On that basis the author proposes recommendations related

to the factors contributing to improving the efficiency of management accounting at the units, while helping to improve management efficiency and operational efficiency

at these units

2 LITERATURE REVIEW, RESEARCH MODEL AND MATERIALS

2.1 Theoretical basis and proposed model

Contingency theory

Management accounting is an integral part of an organization, which is what backup theory wants to convey Based on contingency theory, management accounting is modified, and adjusted to suit organizational structure and environmental change This theory is presented to explain the application of information technology, size and organizational structure affecting the use of management accounting

Theory of cost-benefit relationship

The purpose of management accounting is to serve the management needs of the organization, so each different organization has requirements on different management accounting systems, applying other management accounting technical tools together Theory of cost-benefit relationship affects the application

of management accounting through two factors: the level of investment costs for the organization of management accounting and the benefits of management accounting information bring to the organization This theory is applied to research

to explain the cost factor to organize the management accounting system, the size

of the organization affecting the application of management accounting of the unit

Factors affecting the application of management accounting at public units in the

Ho Chi Minh City:

Leadership awareness

Senior managers are those involved in management activities within an organization Resource theory of Wernerfelt (1995) also acknowledges the role of administrators

in the unit's accounting information system The senior managers are the ones who understand best about the operation of the unit and understand the necessity of applying management accounting to the organization, connecting management

accounting with the strategy and operational objectives of Their units, moreover, apply management accounting that requires the unit to invest many different resources, thus needing approval and support from senior management, and the support of the manager high-level management is a factor that determines success

or failure when building and applying management accounting at the unit In addition, management's understanding of management accounting also plays an active role

in developing and implementing management accounting (Nguyen Vu Thanh Giang, 2017)

Hypothesis H1: Awareness of management positively affects the use of management accounting at public units in the Ho Chi Minh City (+).

Organization size

According to Salah A.Hammad et al (2010), large-size organizations will often have wide scope and areas of operation, requiring general accounting information and high management accounting information This information is an important basis for managers to make decisions On the contrary, for organizations with a small size, relatively narrow, the demand for information is not too high, and there is a limit on the level of human resources and the application of information technology often does not apply management accounting but only focus on financal accounting

Hypothesis H2: The size of the organization positively affects the use of management accounting at public units in the Ho Chi Minh City (+).

Organizational structure

A unit with good organizational structure, reasonable division among departments, among employees will contribute to ensuring data quality in the general information system of the unit and management accounting information in particular based on mutual control among departments and employees (Xu, 2003)

The strong relationship between management accounting and organizational structure is also shown in the research conducted by Salah A.Hammad et al (2010) According to Xu (2003), centralized organizational structure will help the unit to better control data quality

Hypothesis H3: The structure of the organization positively affects the use of management accounting at public units in the Ho Chi Minh City (+).

IT applications

The application of management accounting is influenced by factors related to information technology application in management accounting organizations Information technology applications related to organizational hardware, software, databases and processes (Salah A.Hammad et al, 2010) Therefore, the issue of equipping the infrastructure in accordance with the needs of the units is one of the important factors affecting efficiency in management accounting applications

Hypothesis H4: IT applications positively affects the use of management accounting

at public units in the Ho Chi Minh City (+).

Accounting staff qualifications

When accounting staff has a high level of expertise, it will help reduce errors in recording and processing information, as well as help the management accounting system operate more smoothly (Nguyen Vu Thanh Giang, 2017) Today, the role of accountant does not stop at recording and reporting, but also in the role of data analysis and monitoring, which will help increase the usefulness, relevance, quality of the information created to support unit managers, so that staff qualifications greatly affect the quality of the accounting management information they provide

Hypothesis H5: Accounting staff qualifications positively affects the use of management accounting at public units in the Ho Chi Minh City (+).

The cost of organizing a management accounting system

The research results of Nguyen Vu Thanh Giang (2017) explain that the organization

of a separate management accounting department will consume manpower, material resources of the organization The application of management accounting

in organizations must be balanced with the benefits that management accounting information brings

Although the units and organizations know that the benefits from the application of management accounting are huge, but due to the financial potential is limited, the investment costs for the use of management accounting are also will decide if the unit accepts to use management accounting

Hypothesis H6: The cost of organizing a management accounting system positively affects the use of management accounting at public units in the Ho Chi Minh City (+) 2.2 Research Method and materials

The study was conducted through two main stages:

(i) Qualitative research to build a formal research model and complete a survey questionnaire for formal research;

(ii) Quantitative research to collect, analyze survey data, and test model assumptions Sampling method: Samples are selected by a random method According to Tabachnick & Fidell (2007) when using MLR (multiple regression), the sample size should be calculated by the following formula: n ≥ 50 + 8p (p: number of independent variables) The number of samples selected in the study is 135 samples that are suitable (135> 50 + 8 * 6)

The author builds a regression model of factors affecting the use of management accounting at public health care units under the Ho Chi Minh City Department of Health as follows:

MAPs = β1LA+ β2 OS + β3 OSTR + β4ITs + β5QUAL + β6COST + ε

Where:

β0: Intercept coefficient;

β1, β2, β3, β4, β5, β6: Standardized regression coefficient for each of the independent variable;

ε: Random disturbance terms assumed to be normally distributed with mean); MAPs: the use of management accounting at public units in the Ho Chi Minh City; LA: Leadership awareness;

OS: Organization size;

OSTR: Organizational structure;

ITs: IT applications;

QUAL: Accounting staff qualifications;

COST: the cost of organizing a management accounting system

3 INTERPRETATION OF RESULTS

Result profile of sample respondents: Among those surveyed, in terms of gender characteristics, there are 57 person who is male, accounting for 42.22%; The percentage of females is 57.78% In terms of age, the majority of respondents belong

to the age group from 30 to 39, accounting for 39.26%, followed by people from

20 to 29 years old, accounting for 25.19% and from 40 to 49 years old, accounting for 18.52% and the rest are people over 50, accounting for 17.03% Of the total participants, most of them have a college or university degree (89.62%), followed by those with a master’s or above degree (accounting for 7.41%), the rest are people with other level, accounted for 2.97%

Table 1 Profile of sample respondents

Demographic

Gender

Age

Education level

Source: SPSS

After testing the reliability of the scales of independent and dependent variables The author evaluates the relevance of the linear regression model as follows:

Table 2 Model Summary

Source: SPSS

The results show that the R2 coefficient is adjusted = 55.2%> 50%, thereby showing the independent variables explain 55.2% of the variation of the dependent variable, the rest is explained by the weak Other factors are not considered in the model

Figure 1 The model Table 3 Coefficients

Model

Unstandardized Coefficients Standardized Coefficients T Sig. Collinearity Statistics

1

a Dependent Variable: MAPs

Source: SPSS

Based on the research results table, it can be seen that the use of management ac-counting at public units in the Ho Chi Minh City is influenced by 6 factors including: MAPs = 0,242 AL+ 0,178 OS + 0,295 OSTR + 0,273ITs + 0,091QUAL + 0,267COST

LA

OS

OSTR

ITs

QUAL

COST

MAPs

Adjusted R2 =.552

Conclusion: Through research, the author has identified 6 factors affecting the

use of management accounting at public units in the Ho Chi Minh City, in which the organizational structure (β = 0.295); IT applications (β = 0.273); the cost of organizing a management accounting system (β = 0.267); Leadership awareness (β

= 0.242); the size of the organization (β = 0.178); accounting staff qualifications have the lowest impact on the dependent variable with β = 0.091

4 RECOMMENDATIONS

The study proposes a number of recommendations related to each factor to improve the effectiveness of the use of management accounting at public units in the Ho Chi Minh City, such as considering the structure of organization, as well as implementing appropriate decentralization; improve the application of information technology to accounting and management accounting in particular; reasonable balance between costs and benefits that management accounting information brings to avoid resource waste, as well as inefficient investment; Unit leaders must raise awareness about the importance of management accounting, actively improve themselves with management accounting through training, or advice from accounting departments and related departments;The unit should recruit, arrange, organize training, guide accounting staff in general and management accounting in particular to meet the requirements of professional qualifications and knowledge of organization and process activities of public units, thereby contributing to good implementation of accounting work at the units

REFERENCES

[1] Nguyen Vu Thanh Giang (2017) Factors affecting the application of management accounting in enterprises in Ho Chi Minh City Master's thesis in economics, Ho Chi Minh City University of Economics.

[2] Hammad, S A., Jusoh, R., & Yen Nee Oon, E (2010) Management accounting system for hospitals: a research framework Industrial Management & Data Systems, 110(5), 762-784.

[3] Tabachnick, B G., & Fidell, L S (2007) Using Multivariate Statistics (5th ed.) New York: Allyn and Bacon.

[4] Wernerfelt, B (1995) The resource-based view of the firm: Ten years after Strategic management journal, 16(3), 171-174.

[5] Xu, H., Horn Nord, J., Daryl Nord, G., & Lin, B (2003) Key issues of accounting information quality management: Australian case studies Industrial Management & Data Systems, 103(7), 461-470.

APPENDIX

Table 4 Scale reliability analysis

Deleted

Scale Variance if Item Deleted

Corrected Item Total Correlation

if Item Deleted Cronbach's Alpha Leadership awareness

Reliability Statistics

Item-Total Statistics

LA1: Managers appreciate the

usefulness of management

LA2: Managers have knowledge

of management accounting

LA3: Managers have a

high demand for applying

LA4: The manager accepts a

high level of investment in the

Organization size Reliability Statistics

Item-Total Statistics

OS1: The higher the turnover,

the higher the demand

for applying management

accounting in the unit.

OS2: The larger the number

of employees, the higher the

need to apply management

accounting in the unit.

OS3: The more years of

operation, the higher the need to

apply management accounting

in the unit.

OS4: The bigger the business

capital, the higher the demand

for managing accounting in the

unit.

Organizational structure Reliability Statistics

Item-Total Statistics

OSTR1: There is an

organizational structure divided

into administrative units

according to the nature of the

operation.

OSTR2: There is clarity in the

division of work in administrative

OSTR3: There is coordination in

the relationship between the part

OSTR4: There is a professional

management for each part of the

IT applications Reliability Statistics

Item-Total Statistics

ITs1: Use the software to set up

the management accounting

ITs 2: Internal information

network allows connecting the

ITs 3: There is a separate

accounting software used for

Accounting staff qualifications Reliability Statistics

Item-Total Statistics QUAL

QUAL1: Accounting staff

has professional knowledge

in accounting and has an

understanding of the field of

management accounting.

QUAL2: Accountants are able

to use techniques and methods

to implement management

accounting.

QUAL3: Organizing the work

of fostering and improving the

qualifications and knowledge

of management accounting for

accountants.

QUAL4: Accountants are trained

according to prestigious and

The cost of organizing a management accounting system Reliability Statistics

Item-Total Statistics

COST1: Costs for management

accounting systems include

COST2: Cost for management

accounting system including

COST 3: Expenses for the

management accounting system

COST4: Costs for the

management accounting system

include the cost of inviting

experts to advise on the use of

management accounting

The use of management accounting at public health care units under the Ho Chi Minh City Department

of Health

Reliability Statistics

Item-Total Statistics

MAPs1: The ability of applying

MAPs2: The ability of applying

MAPs3: The ability of applying

MAPs4: The ability of applying

MAPs5: The ability of applying

strategic management

Source: SPSS