An Investigation of a Contingency Framework of Management Accounting Practices in Manufacturing Companies of Pakistan

Abstract

The main purpose of this study is to validate empirically whether the contingent factors that are being utilized abroad also exist in the establishments of Pakistan. Researcher has tried to assess the MA system utilized in Pakistan which was not explored up till now in its entirety. Four contextual variables were considered for this study i.e. strategy (STRG), advance manufacturing technology (AMTEH), top management support (TOPMS) and market orientation (MOR) to develop a contingent framework among these factors, management accounting (MA) and company performance (CPER). Questionnaire was used to collect data from different manufacturing sectors. The data was collected through non probability sampling technique i.e. (Convenience sampling). Before applying structural equation modeling (SEM), reliability test, exploratory factor analysis (EFA), and confirmatory factor analysis (CFA) was applied to finalize the data. The results revealed that all the hypotheses were supported except for H4 which means that STRG, TOPMS and AMTECH have a significant effect on MA; STRG, MOR and MA have a significant effect on CPER whereas MOR has an insignificant effect on CPER. Such investigation offers a prospective for scholars to study these tools that are productively engaged by corporations.