Factors Affecting the Application of Management Accounting in Enterprises

behavior

Subjective standard

Behavior

Behavior control

Figure 2.1: TPB theoretical model of planned behavior

(Source I. Ajzen, 1991, p.182)

According to the theory of planned behavior, three factors that influence the intention to perform individual behavior are attitude, subjective norm and perceived behavioral control. Accordingly, behavioral theory contributes to explaining the influence of cognitive variables of unit leaders on the application of KTQT in enterprises.

2.3.2 Contingency theory

Contingency theory is the theory that there is no one best way or model for all organizations, only good management ways or models.

for each organization. According to Scott (1987), it was previously thought that an organization is a closed system, separate from the environment and only includes stable components that are easily identified. However, according to the author, an organization is an open system and is not clearly identified.

Researchers following this approach argue that there are three factors that will differentiate one organization from another:

Environmental Dependence and Uncertainty: Environmental factors are constantly changing and this uncertainty arises from the inability of humans to fully understand and control environmental factors.

Technology and techniques: Organizations themselves often produce a variety of products/services with different technologies. Sometimes they produce the same product line but use different technologies because of the management style suitable for different technologies and techniques.

Size and organizational structure of the unit: Is a very important factor that creates different management methods in organizations of different sizes.

Contingency theory was developed and used by researchers in the field of management accounting between the 1970s and 1980s. Contingency theory studies the management accounting of enterprises in the interaction with the operating environment of enterprises. In other words, an appropriate management accounting system for an enterprise depends on the characteristics and specific business environment. This means that the construction of an effective management accounting system must be appropriate for each enterprise, with the internal and external environment in which the enterprise is operating.

Therefore, the contingency theory will contribute to explaining the influence of variables such as methods and techniques of applying international accounting; organizational structure of the unit; level of market competition; accounting human resources; application of IT on the application of international accounting in enterprises.

2.3.3 Delegation theory

The need to apply management accounting in an organization is clearly shown in the agency theory. According to Jensen and Meckling (1976), the agency relationship (or agency relationship) is defined as a contractual relationship in which the owners

The owner will appoint and designate a unit manager (representative) to carry out the management of the unit for them, including granting the authority to make decisions on the disposal of the unit's assets. The delegation relationship is also reflected in the relationship between senior managers and managers at lower levels in the hierarchy, between managers and those who directly use the organization's resources. Both owners and managers have different interests, even conflicts. According to the agency theory, both parties (the principal and the agent) want to maximize their own benefits, so there is a possibility that the manager will not always act in the best interests of the owner, that is, the shareholders. This problem is minimized by using appropriate mechanisms to limit the differentiation of interests between the owners and managers of the company, one of the solutions is to use the management accounting system as an effective monitoring mechanism, a tool to evaluate the responsibility of managers. Moreover, conflicts will arise when there is incomplete and asymmetric information between the subject and the representative in an organization. The management accounting system provides information to ensure the benefits of investors and owners. Agency theory contributes to explaining why the application of management accounting in an organization must be influenced by the perception of the unit's leaders; the need to use management accounting information from the unit's leaders as well as the organizational structure of that unit.

The following is a summary table of the use of background theories to confirm the independent variables affecting the author's research problem as follows:

Table 2.2: Summary of background theory used in research

STT

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2.4 Factors affecting the application of management accounting in enterprises

From the results of the general research on the works on factors affecting the application of the KTQT system in units in general and for units in the public sector in general, the author can draw and synthesize some models of factors affecting the application of KTQT work at Binh Duong Water - Environment Joint Stock Company as follows:

2.4.1. Need for KTQT information from unit leaders

According to authors Scarbrough et al. (1991) in the study “Japanese management accounting practices and the effects of assembly and process automation”, the awareness of management accounting of organizational managers is one of the factors that need to be considered when conducting research on the application of management accounting in organizations. Next, according to Dao Khanh Tri (2015), the higher the awareness of the importance and usefulness of management accounting of a unit manager, the higher the need for the application of management accounting.

Whether the information system of the management accounting system in the units is established and exists or not depends on the need for information of the management accounting cost from the side of the enterprise administrator because every system in general and the information system in particular has a goal. The goal of the entire construction of the management accounting information system is shown through determining the information needs of the manager to perform management functions.

value. This highlights the role of information as a management tool, an aid to decision making. In short-term and long-term strategies, the construction and implementation of information sources provided by the accounting system, especially cost information, plays a very important role. Therefore, the greater the demand for information on management accounting from the unit's leaders, the more improved the application of management accounting in the unit will be. From there, the author proposes the following research hypothesis:

Hypothesis H1: The need for information on international economic relations from the unit's leaders has a positive (+) influence on the application of international economic relations at Binh Duong Water - Environment Joint Stock Company.

2.4.2 Awareness of unit leaders

In developed countries, the content of management accounting in organizations is always important and very interested. Through foreign studies, it is shown that the important factor influencing the application of management accounting is the human factor, especially the awareness of the unit's leaders. Correct awareness helps the application of management accounting to be increasingly put into practice in the management of enterprises and then they will successfully organize the management accounting system for their units. As Ahmed Belkaoui (1981) emphasized, the human factor, the personal factor plays an important role in the success of applying the accounting system in general and the management accounting system in particular because managers must take responsibility for the effectiveness of their units.

Some countries in Asia, including Vietnam, have not really paid attention to the management of the international accounting system, and the international accounting system is still very vague. Therefore, the international accounting system has not been effectively promoted in management work in Vietnam, especially in state-owned economic organizations. According to Nguyen Phong Nguyen and colleagues (2016), evidence has shown the impact of the factor of leadership support. Leadership support is the extent to which leaders recognize the importance of the international accounting system and the extent to which they participate in implementing that international accounting system. The most difficult problem in implementing and operating a system is to deal with major changes in working procedures. These changes may encounter crisis, conflict and opposition from different stakeholder groups in an uncertain environment unless there is full commitment from senior managers (Ragu-Nathan et al., 2004). Therefore, for

Enterprises in general and Binh Duong Water - Environment Joint Stock Company in particular, the awareness, interest and support from leaders are believed to have an impact on the application of international accounting for enterprises. From there, the author proposes the following research hypothesis:

Hypothesis H2: The awareness of unit leaders has a positive (+) influence on the application of international economic management at Binh Duong Water - Environment Joint Stock Company.

2.4.3 Organizational structure of the unit's management apparatus

According to Pham Van Duoc and colleagues (2010), management decentralization in the organizational structure of the management apparatus is an important factor and has been mentioned many times in studies on management accounting in general and responsibility accounting in particular, which is both a premise and a driving force for the successful application of management accounting in an organization.

Management decentralization is also mentioned by author NJ Gordon (1963) in the theory of the international accounting system. According to author NJ Gordon (1963), clear decentralization in the organization of the management apparatus will make the organization of international accounting successful for that organization. Because when there is clear and non-overlapping management decentralization, it will create conditions for organizing information, processing information and reporting management quickly, clearly and scientifically; the information provided for decision making will be more useful. From there, the author proposes the following research hypothesis:

Hypothesis H3: The organizational structure of the management apparatus of the unit has a positive (+) influence on the application of international accounting work at Binh Duong Water - Environment Joint Stock Company.

2.4.4 Methods and techniques

The implementation method and technique refers to the ability of the information system to operate successfully in general and the application of information management in an organization is an essential function; that is, its design results in useful information output. This involves the information system providing accurate, accessible, reliable, timely and understandable information (Mc Gowan, 1998). It can be argued that a high level of technical sophistication can classify costs, revenues and profits more effectively, provide more detailed and more frequent information on costs, revenues and profits, and help control these economic indicators more closely through

through the KTQT tool. In the operating environment of an organization, managers must make various decisions related to the different production and business activities of the unit and therefore the frequency of reporting to provide information to help managers make decisions must be more frequent, more flexible and more timely. To do that, the system of methods and techniques for implementing KTQT must be really effective. Nguyen Phong Nguyen and colleagues (2016) have provided empirical evidence that the effectiveness of methods and techniques has a positive relationship in applying the KTQT system to an organization. From there, the author proposes the following research hypothesis:

Hypothesis H4: Methods and techniques have a positive (+) influence on the application of management accounting at Binh Duong Water - Environment Joint Stock Company.

2.4.5 Accounting human resources

According to Pham Van Duoc and colleagues (2010), from the perspective of applying management accounting, the organization's human resources in general and especially accounting human resources have a great influence on the ability to operate and select accounting methods and techniques to maximize the benefits of the enterprise as well as meet the needs of providing useful management accounting information for managers. Therefore, understanding management accounting and applying it in practice requires accountants to have certain knowledge and skills to be able to apply it to the management accounting work of the unit.

In small-scale enterprises, the existence of qualified accountants can be an important factor as a basis for applying the QMS. For large companies, there are specific and separate accounting and finance departments, so qualified accountants not only make professional reports but also advise enterprises on accounting-related work. Huynh Cao Khai (2018); Lucas et al. (2013) believe that the presence of qualified accountants is related to a high level of QMS application; in the study Nguyen Ngoc Vu (2017) believes that qualified accountants help the development of QMS in SMEs. Therefore, accounting human resources are one of the

Factors that have a positive influence on the successful application of KTQT in an organization. From there, the author proposes the following research hypothesis:

Hypothesis H5: Accounting human resources have a positive (+) influence on the application of management accounting work at Binh Duong Water - Environment Joint Stock Company.

2.4.6 Application of information technology

According to Pham Thi Anh Hong (2017), the amount of information that KTQT must process and convert into useful information is very large. The information processing process requires a combination of many complex technical methods. Therefore, facilities with computer systems and information processing software are essential in the process of organizing the accounting information system.

According to Do Thi Huong Thanh (2019), the application of IT in accounting in general and KTQT in particular is considered a measure of the performance of an organization. Because accounting is an extremely effective financial management tool, the application of IT is a powerful support tool for processing accounting data and preparing reports. Therefore, to apply the KTQT system in practice, managers of units need to choose accounting processing software that can adapt to the characteristics of the unit and changes in state management requirements and hardware that meets data processing requirements. When additional information is needed due to the manager's request, KTQT can exploit some management functions to provide information from this system. Accounting software needs to be fully designed with functions and data sources to be able to render the necessary management reports. When purchasing or designing accounting software to provide internal information, administrators must meet two main requirements: the program design must ensure the function of decentralization and confidentiality of information at each level of decentralization. Accordingly, the higher the level of IT application and the need to process and provide information for management, the more effective it will be to support the application of international accounting for enterprises.

From there, the author proposes the following research hypothesis:

Hypothesis H6: IT application has a positive (+) impact on the application of international accounting work at Binh Duong Water - Environment Joint Stock Company.