Perfecting management accounting in forestry companies in Tuyen Quang province

INTRODUCTION

1. Urgency of the topic

Currently, forestry is one of the sectors that Vietnam focuses on to achieve the economic growth target (Central Committee, 2021). The forestry economy is oriented to develop in a modern direction, both managing, protecting and developing forests, and sustainably using forest areas as well as land areas planned for forestry development. At the same time, it creates raw material areas for the wood processing industry and forest products trade, while contributing to creating jobs and income for people associated with protecting the environment and ecosystem, protecting national defense and security (Government, 2021).

In 2021, the whole country exploited more than 21 million m3 of wood from concentrated plantations, most of which were planted on forestry land managed by forestry companies. This is an important source of raw materials contributing to the development of the sustainable wood production and processing industry, while at the same time, helping forest growers and foresters have the opportunity to increase their income (Thanh, 2022). As the demand for raw wood increases, raw wood standards become increasingly stringent, forestry companies are limited by land resources and production costs, forestry company managers need to choose and decide on production and business plans to both increase production and business scale, apply technological advances to production to increase output and improve the quality of raw wood, and control costs to avoid large fluctuations in production costs. Therefore, the development of forestry companies associated with governance plays an important role in forestry development nationwide.

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One of the tools used to provide useful information to managers is management accounting. Management accounting has now become a part of the management process, helping business managers access financial and non-financial information directly, quickly and accurately. At the same time, management accounting is also a tool for allocating resources, monitoring and evaluating the performance of businesses (Legaspi, 2018). The reason why businesses operate inefficiently or fail is because they do not use management accounting tools (Lucas, Prowle, & Lowth, 2013). In Vietnam, international economics was officially recognized in 2003 and continued to be affirmed in 2015 (National Assembly, 2015). Although it appeared later than in the world, it is considered an urgent issue when businesses want to improve the quality of management to increase competitiveness in the process of international economic integration (Thu, 2019).

Tuyen Quang is a province in the midland and mountainous region of the North, with

448,589 hectares of forestry land, accounting for 76% of the total natural land area, forest coverage reaching 65%, about 88% of the workforce is working in forestry production (Tuyen Quang Provincial Statistics Office, 2020), therefore, the province has set a goal of becoming a model of forestry development in the country associated with socio-economic development (Tuyen Quang Provincial People's Committee, 2020). Forestry economic development is identified by Tuyen Quang as one of the breakthroughs to become a fairly developed province in the Northern mountainous region (17th Provincial Party Congress, 2020), at the same time, the province highly appreciates the role of forestry companies in promoting local forestry economic development (Tuyen Quang Provincial People's Committee, 2019). In 2020, the province's forestry economy continued to achieve high growth, with the forestry production value (at 2010 comparable prices) increasing by an average of 7.8% per year (Huong L., 2021). This result shows that the province's socio-economic development orientation is very correct.

There have been many scientific works in the world and Vietnam researching management accounting in manufacturing enterprises. In the world, Sunarni (2013), Mihăilă (2014) and Legaspi (2018) affirmed the important role of management accounting in enterprises, as a tool for managers to make decisions related to internal business activities, Boučková (2015) said that management accounting helps increase value for owners, domestic researchers such as Viet & cs. (2020), Phuc (2014) consider management accounting from the perspective of a science. For forestry production enterprises, studies by Papaspyropoulos & cs. (2012), Lobianco & cs. (2016) and Hai (2016) emphasized the role of providing information of management accounting based on the support of financial accounting, at the same time, management accounting is also a tool to help managers set expectations about investment profits in forests. Thus, management accounting in production enterprises is necessary and also an inevitable trend, however, how to improve, perfect and develop it in forestry production enterprises, in-depth studies on this issue are still very new and not diverse. In particular, in Tuyen Quang province, one of the provinces with the largest forest area in the country, in the new situation, forestry companies have successfully transformed their business models and non-state forestry companies are in the early stages of development, but studies on management accounting in enterprises operating in the field of forestry production in the locality are almost non-existent.

On the other hand, forestry companies in Tuyen Quang province still focus on financial accounting, do not pay due attention to the application of management accounting in production and business management, and do not recognize the importance of accounting.

Management accounting for business operations 1 , in addition, the qualifications and working capacity of the accounting team are not uniform, not meeting the requirements of the new economic management mechanism 2 . As a result, although companies have applied management accounting, it is at a simple level, a combination of financial accounting and management accounting, in which management accounting performs detailed financial accounting data 3 , the establishment of a system of economic indicators associated with the management function of managers has not been implemented 4 leading to the information provided by management accounting not meeting the requirements of managers at all levels, therefore, forestry companies have not fully exploited management accounting tools to serve business administration and operations.

From the practice of management accounting at forestry companies in Tuyen Quang province, it is necessary to pay more attention to the management accounting system to create a solid source of information for managers to make decisions, which is a necessary condition to effectively utilize and exploit resources, thereby enhancing the competitive position of companies in the market.

Therefore, the study of the issue "Improving management accounting in forestry companies in Tuyen Quang province" has scientific and practical significance in the context of meeting the development requirements of forestry companies in particular and the goal of developing local forestry economy in general.

2. Overview of research problem

2.1. Overview of research works related to the thesis

2.1.1. Overview of research works on general theoretical issues of management accounting

International accounting is a part of the accounting system but was born after financial accounting, however, its appearance is becoming a new trend of modern accounting. Since the appearance of international accounting, there have been many studies on it with different approaches.

International economics was studied by scholars quite early with many different approaches. The first studies started in the early 19th century in the US, stemming from the inevitable need to control and evaluate the activities of business administrators when the scale and scope of production and business were increasingly expanding and developing strongly. Subsequent studies continued to be inherited and developed in many different countries, including Vietnam.

First, the management approach

1. Synthesis of survey results on awareness of international economic integration of management levels in CTLNs in the province of TQ.

2. Summary of survey results on the capacity and qualifications of accountants in enterprises in the province of TQ.

3 Synthesis from the results of collecting documents and certificates at CTLN in Tuyen Quang province.

4. Synthesis of survey results on information needs for control and evaluation of management levels in CTLNs in TQ province.

Sunarni (2013) believes that management accounting is the process of identifying, measuring, analyzing, interpreting and communicating information to meet the goals of the enterprise, management accounting is an integral part of the management process. Normally, the larger the enterprise, the greater the need for information of the management levels. The main purpose of management accounting in the enterprise is to help the management levels perform their functions through the collection, processing and communication of information. The word "accounting" does not only refer to the simple recording of documents on business transactions but also includes other fields of research. In the scholar's view, management accounting is no longer simply a recorder of past performance but plays the role of a value-adding person for the management levels of the enterprise.

Mihăilă (2014) asserts that management accounting is a branch of the accounting system, supporting business administrators in planning, decision making, control and analysis. When using this tool effectively in the business operation process, it will ensure profitable business growth and business optimization. Scholars believe that management accounting is the process of measuring, identifying, synthesizing, analyzing, interpreting and providing financial information used by administrators to plan, evaluate and control business operations and ensure the appropriate use and management of existing resources. Therefore, management accounting is concerned with providing information to administrators who are organizing, leading and controlling its operations.

Legaspi (2018) also affirmed the connection between management and accounting through 4 stages describing the development of IFA's accounting-oriented management, specifically: The first stage is cost determination and financial control, at this time, the focus of management accounting is on product costing and financial control of the production process; The second stage is information for planning and management control, at this time, management control is oriented towards production and internal administrative management of the enterprise rather than strategic consideration; The third stage is reducing waste of resources in the business process, the biggest challenge of management accounting at this time is to ensure the provision of appropriate information to support management levels; The final stage is the stage of creating value through the effective use of resources, including the use of technology to evaluate customers, stakeholders and organizational innovation processes. Scholars believe that management accounting is the measurement, analysis and provision of financial and non-financial information related to management decision making. Research also shows that in today's business environment, the role of accountants for businesses is extremely important. Businesses also appreciate the use of reports analyzing cash flows and resources.

Ameen & cs. (2018) define management accounting as the process by which skilled accountants provide both financial and non-financial information to managers in different departments within an organization to support and guide their decisions on specific issues related to the organization's operations. Management accounting is like a partner of managers in the management decision-making process because the accountant's professional knowledge helps to identify strategies, support decision-making and ensure that plans are implemented by managers. Managers at all levels need to consult with management accounting through the management accounting reporting system or consult directly as a financial consultant before they make important decisions. Management accounting not only works with the top management in the organization but also works with other levels of management, their activities are not limited to specific departments but all units or departments in the organization. Management accounting is a highly organized management system whose implementation requires precision and flexibility depending on the nature of each type of activity, and also depends on determining the scope of costs or analyzing activities.

Thus, according to this approach, management accounting is considered a tool for managers to make decisions related to the internal operations of the organization.

Second, the owner-side approach

AICPA 5 and CIMA 6 (2014) believe that management accounting is the application of accounting principles and financial management principles to create, maintain and increase value for the owners of organizations operating in the private and public sectors. This approach is different from other individual or organizational approaches because this view considers management accounting as a tool with the purpose of increasing value for owners while other views consider management accounting as a tool with the purpose of serving managers in performing their management functions. However, in the author's opinion, when explaining according to the theory of agency in organizational economics, the concepts of management accounting of individuals or organizations according to the above approaches are not much different, because AICPA and CIMA approach the concept from the position of the owner, while other individuals and organizations approach the concept from the position of the manager. According to agency theory, although the two parties in this theory, the principal and the management representative, have incompatible goals, the principal can use some tools to help improve work efficiency, implement a monitoring mechanism for the representative to achieve the benefits that the principal desires, and KTQT is one of those tools. Thus, according to the theory

5 American Institute of Certified Public Accountants: American Institute of Certified Public Accountants

6 Chartered Institute of Management Accountants: Chartered Institute of Management Accountants UK

According to agency theory, management accounting can be understood as a tool for managers to perform management functions to achieve the owner's goals.

Masztalerz (2014) defines management accounting as a value creation tool that ensures sustainable business development by supporting businesses in making the right decisions based on the provision and analysis of comprehensive information as well as the role in planning, implementing and controlling the implementation of strategies and operating policies. This definition focuses on two issues: first, the definition focuses on value creation, successful planning, strategy implementation and strategy control while ignoring the role of traditional accounting in daily financial management; second, the definition refers to the change of management accounting from a supporting role to an active participation in the value creation process, reflected in the use of information provided by management accounting to improve the accuracy of business decisions and ensure value creation for stakeholders. Thus, the goal of QMS is to collect, store and analyze data, and at the same time, provide information to decision makers to facilitate decision making, thereby helping to improve performance, create value for stakeholders, and contribute to the success of the organization.

Boučková (2015) also defines management accounting based on agency theory, scholars believe that management accounting creates value for owners through monitoring and designing optimal monitoring systems. The study also found that management accounting increasingly meets the needs of monitoring managers' behavior, in addition, it also meets the requirements of controlling and managing cost monitoring. Instead of traditional management accounting focusing on financial results, management accounting in recent years has changed when paying attention to other indicators, such as: non-financial indicators of customer relationships, customer loyalty, employee motivation and loyalty, etc., indicators related to the external business environment of suppliers, customers, competitors.

Third, the approach as a part of science

The approach towards international economics as a scientific part is chosen by most Vietnamese researchers. The concept of international economics is academic and focuses on the object and method of research.

Tien (2009) believes that International Economics is a subject belonging to the group of sciences. International Economics provides quantitative information for the management process of business administrators through the task of collecting, processing and analyzing information so that the management process can take place continuously and seamlessly between activities.

planning, organizing the implementation of the plan, checking and evaluating the results of the implementation of the activities.

Quang (2014) also defines international economics as a science, but the authors believe that, in addition to providing quantitative information, international economics also provides qualitative information. Thus, international economics has been defined by the authors according to the modern international economics perspective that many foreign scholars aim for. The information provided by international economics is comprehensive and flexible, serving the decision-making process. This is reflected in the fact that managers' decisions are based on plans, estimates, inspection reports, and assessments of the implementation situation. The activities of international economics are a completely closed process and are closely related to each other.

Phuc (2014) believes that QT is a specialized accounting tool, therefore, it is an inseparable part of the enterprise accounting system, at the same time, the collection, processing, and design of QT information must come from the requirements of each different level of internal management. In fact, the birth of QT comes from the increasing demand of managers for the quantity and quality of economic and financial information. Later, QT developed further due to the competition between businesses, economic groups and even more so between countries in the overall economy. But regardless of the level of development and in any form, the existence of QT is also associated with the information that managers need to use to make decisions to operate activities towards the goal of maximizing profits.

Viet & cs. (2020) researched international economics on its characteristic aspects and in a scientific and logical order. The research was conducted from the very subject and method of international economics through different historical stages. The group of authors also defined international economics in an approach as a scientific discipline, the information provided by international economics is quantitative information but has a close relationship with qualitative information to ensure that the information provided is highly accurate, suitable for each business operation condition and enterprise scale.

2.1.2. Overview of research works on the content of international economics

2.1.2.1. Overview of research works on management accounting content

Statistics on the content of management accounting that the author knows can be divided into 3 main research directions, specifically: (1) Studies approaching the content of management accounting according to the management accounting process associated with the management function of the administrator; (2) Studies approaching the content of management accounting according to the management accounting process of collecting, processing and providing information; (3) Studies approaching the content of management accounting according to the relationship of management accounting with management levels.

* Studies approaching the content of management accounting according to the management accounting process associated with the management function of the administrator.

Approaching the content of international economics according to the management function of the administrator has been carried out in a number of typical studies that the author knows.

Tayles (2011) classified and identified the contents of management accounting according to two groups of management functions of managers, including the group of control and performance measurement functions and the group of strategic decision-making functions. On the other hand, the author also identified the contents of management accounting according to two management subjects, specifically: the group of management accounting contents serving operational managers and the group of management accounting contents serving strategic managers. On that basis, the author continued to identify the contents of management accounting according to the management functions of management levels. The study has provided multi-dimensional views on the contents of management accounting in relation to the management functions of managers. Management accounting is considered a tool to provide information to serve the management levels of enterprises (strategic management level and operational management level) to perform the management functions of managers including planning, controlling, evaluating performance and making decisions.

Raghunandan & cs. (2012) stated that budgeting is a part of the control process in management activities, it is designed to promote the effective use of resources and support the provision of information for the implementation of the administrator's functions. Almost all businesses with all levels of scale, complexity of activities or different fields, to achieve the set strategic goals, must rely on budgeting and budgeting systems. The success and importance of budgeting are related to determining goals, allocating resources, and responsibilities for implementation. This is one of the important contents of management accounting that helps organizations achieve success if used properly. The study also confirmed that budgeting helps promote smooth coordination between departments through the use of relevant information to achieve the specific goals of each department and the overall goals of the organization. There are 3 budgeting models proposed by the group of authors, specifically: top-down budgeting model, bottom-up budgeting model and agreement model. The study focuses on the budgeting work of KTQT to serve the control and evaluation functions of managers, and has not exploited other activities of KTQT.

Gray and Milne (2013), Adams & cs. (2013) emphasize the role of management accounting in providing information to managers about the actual use of resources and the expected allocation of resources in the future to achieve the goal of sustainable development for the enterprise. Studies share the same view on the desire to maintain sustainability.

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