An empirical investigation of the impact of management accounting on structural capital and business performance

Purpose - The purpose of this paper is to develop and test a series of conceptual models that investigates the impact of management accounting (MA) (systems and information) on firms' structural capital and business performance. It also replicates previous research in this area which focused on the interplay between the three primary elements of intellectual capital (IC) (i.e. human capital, structural capital and relational capital) and business performance. Design/methodology/approach - A survey instrument was used to collect the data required to conduct the study. All respondents who participated occupied the role of chief financial officer or equivalent and were employed by firms competing within the indigenous Irish information and communications technology sector. Consistent with prior quantitative IC-based research, a form of structural equation modelling called partial least squares was used to test the data collected. Findings - The findings reject the suggestion that MA is most appropriately situated as an element of firms' structural capital. The findings support a plausible and statistically significant relationship between advanced MA systems and business performance. The findings also generally support previous research on the relationship between the three elements of IC and business performance. Originality/value - Although much has been written about the potential role for MA in the IC area, little empirical evidence has yet emerged. This exploratory research begins to address this deficiency by developing and testing a series of MA-related constructs within the IC research domain.