Management accounting tools providing sustainability information for decision-making and its influence on financial performance

Abstract

Many organisations today are still not making use of Management Accounting tools to assist in providing sustainability information for decision-making and the influence this can have on the financial performance of an organisation. This may have a negative impact on the financial performance of organisations, the result of the number of errors and miscalculations that can occur, including obsolete cost drivers; miscalculated business decisions, inaccurate information and human errors. Without applying Management Accounting tools, managers of organisations may find it difficult to improve the day-to-day operations and to take decisions to enhance the financial performance of their business. In this study, information was collected from interviews to determine whether Management Accounting tools could provide sustainability information for decision-making, and how this would influence the financial performance of an organisation. The research was carried out in organisations listed on the JSE. This study found that Management Accounting tools are important in providing sustainability information for decision-making and in determining how this information influences the financial performance of JSE listed organisations. Furthermore, Management Accounting tools provide strategies that influence decision-making and performance, although decision-making is the responsibility of executives or directors of the organisations. The study also found that Management Accounting tasks are performed by financial managers who focus solely on financial statements and reporting. Hence future research should focus on the importance of devolving Management Accounting roles to financial accountants or managers to enable the organisation to focus on different reports for different outcomes.