Differences and the Factors of Convergence of Management Accounting Systems in Developed and Less Developed Countries

Abstract

The article focuses on two areas. First part examines the major differences amongst the systems in developed and less developed countries and the rational behind it i.e. inadequate financial resources, weak business structure, poverty, political influence, weak state institutions, difference in taxation and social-economic factors. The second part examines the factors which are motivating and intimidating these two sets of groups to follow the similar management accounting practices i.e. discouraging the system of protection, innovation in IS/IT technologies, normative & mimetic aspect, international strategic alliance and international trade agreements. Organizations operating in LDC's need to understand the pros and cons of each management accounting system considering local as well as international environment before adaptation. There are number of factors which a company needs to confront with like international collaboration, international competition, taxation, socio-ethical issues, technology, political conditions etc. Therefore the companies need to adopt the system which suits the most considering current and future prospects. However the converging factors are seen more active and dominating therefore in coming few years there are more expectation to have similar set of standards of management accounting systems