THE ADOPTION AND NONADOPTION OF MODERN ACCOUNTING PRACTICES - A STUDY OF 20 MANUFACTURING FIRMS

A number of questionnaire surveys have indicated that potentially up to 90% of companies intend to make changes in their accounting systems, but at present fewer than 20% have actually done so. As several authors have commented, there are inconsistencies in the responses to such questionnaires and a case study method was adopted for the purposes of the research described in this paper. A sample of 20 manufacturing firms were selected to discover what practices have been adopted and why changes have or have not taken place. The following primary reasons for the adoption or non-adoption of new accounting methods were found: ownership and history; pressure from management, sister companies and customers; management satisfaction with existing systems; availability of resources; changes to marketing or manufacturing strategies. The survey also revealed that where changes were made, their potential impact was limited by a lack of managerial commitment to change.