Management Accounting in Small And Micro Enterprises - A Case Study of Two Finnish Small Businesses
Loading...
Journal Title
Journal ISSN
Volume Title
School of Business |
Bachelor's thesis
Unless otherwise stated, all rights belong to the author. You may download, display and print this publication for Your own personal use. Commercial use is prohibited.
Author
Date
2023
Department
Major/Subject
Mcode
Degree programme
Laskentatoimi
Language
en
Pages
26+1
Series
Abstract
This thesis aims to examine the use of management accounting in small and micro-enterprises, which are the smallest economical units in the corporate world. The aim is to find out to what extent is management accounting utilized and how are different methods used. Management accounting includes various methods, of which this paper concentrates on planning, performance measurement, budgeting, cost accounting, and capital budgeting. Management accounting research has focused on large companies’ practices while putting less weight on the micro and small companies’ use of management accounting. A great majority of all companies worldwide are companies of minimal size, while they employ huge amounts of people. This makes the topic of MA in small and micro-enterprises an important one. From the perspective of agency theory, small companies experience fewer agency problems in the form of principal-agent conflicts than the bigger ones, but other inefficiencies may occur, which makes it interesting to take a closer look at small companies with the help of agency theory. The literature review provides data from management accounting academia. Two companies’ representatives are interviewed to gain empirical data, one is the CEO of a micro-enterprise, and the other one is the CFO of small enterprise. After the review of literature, management accounting may be perceived as having quite little use in the small businesses. However, empirical data shows that some deviations to the theory may occur. The importance of manager’s knowledge of management accounting’s advantages is crucial. Findings of this paper show, that some of the management accounting tools are more regularly used in small and micro-enterprises, often informally, but are aware of their usefulness in decision-making. The performance of a small business increases with the use of management accounting, which can be seen in the case of interviewed small company.Description
Thesis advisor
Taussi, ThomasKeywords
micro-enterprises, small enterprises, management accounting, agency theory, performance
