FACTORS AFFECTING THE USE OF MANAGEMENT ACCOUNTING AT PUBLIC UNITS ON THE AREA OF HO CHI MINH CITY45453

VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS

FACTORS AFFECTING THE USE OF MANAGEMENT ACCOUNTING AT
PUBLIC UNITS ON THE AREA OF HO CHI MINH CITY
Pham Ngoc Toan1*, Le Thi My Nuong2
1
2

School of Accounting, University of Economics Ho Chi Minh city
School of Accounting and Finance, Ho Chi Minh city Industry and Trade College

ABSTRACT
In fact, for public units management accounting is still quite new, not yet used
in a way synchronous and scientific, besides, managers are still not aware of
the importance of management accounting, have not invested the cost to
organize and apply this system at the units. While the management accounting
system plays a very important role in providing quality information, suitable for
management and decision making of managers.
By using a mixed research method in which qualitative research methods
combined with quantitative research methods, research results show the
factors affecting the use of management accounting at the Public units of Ho
Chi Minh City include: Leadership awareness; Organization size; Organizational
structure; IT applications; Professional qualifications of accountants; The cost
of organizing a management accounting system. Finally, the study proposes
recommendations related to each factor to improve the effectiveness of
applying management accounting at public units of the Ho Chi Minh City.
Keywords: Factors affecting, Management accounting, Public units.
1. INTRODUCTION
Currently, the mechanism of operation, financial mechanism in public units facilities
in the whole country in general and Ho Chi Minh City in particular has gradually been
reformed towards increasing autonomy and responsibility, thereby , creating many

challenges in financial management. In addition, current risks and potential risks
arising from internal units or external factors also negatively affect the performance
and management efficiency of this public unit. Therefore, public units of the Ho Chi
Minh City want to survive and develop, need to develop and apply more appropriate
management tools, one of which is to apply management accounting, thereby

*Corresponding author.
Email address:
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helping the unit achieve its goals through planning, evaluating, managing and
controlling management quality and quality of services at the public units and making
management decisions suitable to ensure the best use of the unit's resources.
This study was conducted to identify and measure the impact of factors on the
use of management accounting at public units of the Ho Chi Minh City. From the
research results, 6 factors affecting the use of management accounting at public
units in the Ho Chi Minh City, in which the organizational structure has the most
impact and Accounting staff qualifications have the lowest impact on the dependent
variable, the independent variables explain 55.2% of the variation of the dependent
variable, show that these factors are suitable for research context is public units of
the Ho Chi Minh City. On that basis the author proposes recommendations related
to the factors contributing to improving the efficiency of management accounting at
the units, while helping to improve management efficiency and operational efficiency
at these units.
2. LITERATURE REVIEW, RESEARCH MODEL AND MATERIALS
2.1. Theoretical basis and proposed model
Contingency theory

Management accounting is an integral part of an organization, which is what backup
theory wants to convey. Based on contingency theory, management accounting is
modified, and adjusted to suit organizational structure and environmental change.
This theory is presented to explain the application of information technology, size
and organizational structure affecting the use of management accounting.
Theory of cost-benefit relationship
The purpose of management accounting is to serve the management needs of
the organization, so each different organization has requirements on different
management accounting systems, applying other management accounting
technical tools together. Theory of cost-benefit relationship affects the application
of management accounting through two factors: the level of investment costs for
the organization of management accounting and the benefits of management
accounting information bring to the organization. This theory is applied to research
to explain the cost factor to organize the management accounting system, the size
of the organization affecting the application of management accounting of the unit.
Factors affecting the application of management accounting at public units in the
Ho Chi Minh City:
Leadership awareness
Senior managers are those involved in management activities within an organization.
Resource theory of Wernerfelt (1995) also acknowledges the role of administrators
in the unit's accounting information system. The senior managers are the ones who
understand best about the operation of the unit and understand the necessity of
applying management accounting to the organization, connecting management
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accounting with the strategy and operational objectives of Their units, moreover,
apply management accounting that requires the unit to invest many different

resources, thus needing approval and support from senior management, and the
support of the manager high-level management is a factor that determines success
or failure when building and applying management accounting at the unit. In addition,
management's understanding of management accounting also plays an active role
in developing and implementing management accounting (Nguyen Vu Thanh Giang,
2017).
Hypothesis H1: Awareness of management positively affects the use of management
accounting at public units in the Ho Chi Minh City (+).
Organization size
According to Salah A.Hammad et al (2010), large-size organizations will often have
wide scope and areas of operation, requiring general accounting information and
high management accounting information. This information is an important basis
for managers to make decisions. On the contrary, for organizations with a small size,
relatively narrow, the demand for information is not too high, and there is a limit on
the level of human resources and the application of information technology often
does not apply management accounting but only focus on financal accounting.
Hypothesis H2: The size of the organization positively affects the use of management
accounting at public units in the Ho Chi Minh City (+).
Organizational structure
A unit with good organizational structure, reasonable division among departments,
among employees will contribute to ensuring data quality in the general information
system of the unit and management accounting information in particular based on
mutual control among departments and employees (Xu, 2003).
The strong relationship between management accounting and organizational
structure is also shown in the research conducted by Salah A.Hammad et al. (2010).
According to Xu (2003), centralized organizational structure will help the unit to
better control data quality.
Hypothesis H3: The structure of the organization positively affects the use of
management accounting at public units in the Ho Chi Minh City (+).
IT applications

The application of management accounting is influenced by factors related to
information technology application in management accounting organizations.
Information technology applications related to organizational hardware, software,
databases and processes (Salah A.Hammad et al, 2010). Therefore, the issue of
equipping the infrastructure in accordance with the needs of the units is one of the
important factors affecting efficiency in management accounting applications.
Hypothesis H4: IT applications positively affects the use of management accounting
at public units in the Ho Chi Minh City (+).
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Accounting staff qualifications
When accounting staff has a high level of expertise, it will help reduce errors in
recording and processing information, as well as help the management accounting
system operate more smoothly (Nguyen Vu Thanh Giang, 2017). Today, the role of
accountant does not stop at recording and reporting, but also in the role of data
analysis and monitoring, which will help increase the usefulness, relevance, quality of
the information created to support unit managers, so that staff qualifications greatly
affect the quality of the accounting management information they provide.
Hypothesis H5: Accounting staff qualifications positively affects the use of
management accounting at public units in the Ho Chi Minh City (+).
The cost of organizing a management accounting system
The research results of Nguyen Vu Thanh Giang (2017) explain that the organization
of a separate management accounting department will consume manpower,
material resources of the organization ... The application of management accounting
in organizations must be balanced with the benefits that management accounting
information brings.
Although the units and organizations know that the benefits from the application of

management accounting are huge, but due to the financial potential is limited, the
investment costs for the use of management accounting are also will decide if the
unit accepts to use management accounting.
Hypothesis H6: The cost of organizing a management accounting system positively
affects the use of management accounting at public units in the Ho Chi Minh City (+).
2.2. Research Method and materials
The study was conducted through two main stages:
(i) Qualitative research to build a formal research model and complete a survey
questionnaire for formal research;
(ii) Quantitative research to collect, analyze survey data, and test model assumptions.
Sampling method: Samples are selected by a random method. According to
Tabachnick & Fidell (2007) when using MLR (multiple regression), the sample size
should be calculated by the following formula: n ≥ 50 + 8p (p: number of independent
variables). The number of samples selected in the study is 135 samples that are
suitable (135> 50 + 8 * 6).
The author builds a regression model of factors affecting the use of management
accounting at public health care units under the Ho Chi Minh City Department of
Health as follows:
MAPs = β1LA+ β2 OS + β3 OSTR + β4ITs + β5QUAL + β6COST + ε
Where:
β0: Intercept coefficient;
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β1, β2, β3, β4, β5, β6: Standardized regression coefficient for each of the independent
variable;
ε: Random disturbance terms assumed to be normally distributed with mean);
MAPs: the use of management accounting at public units in the Ho Chi Minh City;

LA: Leadership awareness;
OS: Organization size;
OSTR: Organizational structure;
ITs: IT applications;
QUAL: Accounting staff qualifications;
COST: the cost of organizing a management accounting system.
3. INTERPRETATION OF RESULTS
Result profile of sample respondents: Among those surveyed, in terms of gender
characteristics, there are 57 person who is male, accounting for 42.22%; The
percentage of females is 57.78%. In terms of age, the majority of respondents belong
to the age group from 30 to 39, accounting for 39.26%, followed by people from
20 to 29 years old, accounting for 25.19% and from 40 to 49 years old, accounting
for 18.52% and the rest are people over 50, accounting for 17.03%. Of the total
participants, most of them have a college or university degree (89.62%), followed by
those with a master’s or above degree (accounting for 7.41%), the rest are people
with other level, accounted for 2.97%.
Table 1. Profile of sample respondents
Demographic
Information
Gender

Age

Education level

Categories

Frequency

Percentage

Male

57

42.22

Female

78

57.78

Total

135

100

20-29

34

25.19

30-39

53

39.26

40-49

25

18.52

50 and above

23

17.03

Total

135

100

College and university

121

89.62

Master’s or above

10

7.41

Others

4

2.97

Total

135

100

Source: SPSS

After testing the reliability of the scales of independent and dependent variables.
The author evaluates the relevance of the linear regression model as follows:
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Table 2. Model Summary
Model

R

R Square

Adjusted R

Square

1

.627a

.561

.552

Std. Error of the Estimate
.13083

Durbin-Watson
1.763

Source: SPSS

The results show that the R2 coefficient is adjusted = 55.2%> 50%, thereby showing
the independent variables explain 55.2% of the variation of the dependent variable,
the rest is explained by the weak Other factors are not considered in the model.
LA
OS
MAPs
Adjusted R2 =.552

OSTR
ITs
QUAL
COST

Figure 1. The model
Table 3. Coefficients
Model

1

Unstandardized
Coefficients

Standardized
Coefficients

B

Std. Error

(Constant)

1.645

.170

LA

.087

.017

.242

OS

.076

.019

OSTR

.139

ITs

T

Sig.

Beta

Collinearity Statistics
Tolerance

VIF

4.569 .000

.894

1.118

.178

3.504 .000

.963

1.038

.031

.295

4.830 .000

.782

1.278

.073

.025

.273

3.216 .002

.768

1.303

QUAL

.158

.036

.091

3.648 .000

.616

1.622

COST

.072

.019

.267

4.573 .000

.949

1.054

8.303 .000

a. Dependent Variable: MAPs

Source: SPSS

Based on the research results table, it can be seen that the use of management accounting at public units in the Ho Chi Minh City is influenced by 6 factors including:
MAPs = 0,242 AL+ 0,178 OS + 0,295 OSTR + 0,273ITs + 0,091QUAL + 0,267COST

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Conclusion: Through research, the author has identified 6 factors affecting the
use of management accounting at public units in the Ho Chi Minh City, in which
the organizational structure (β = 0.295); IT applications (β = 0.273); the cost of
organizing a management accounting system (β = 0.267); Leadership awareness (β
= 0.242); the size of the organization (β = 0.178); accounting staff qualifications have
the lowest impact on the dependent variable with β = 0.091.
4. RECOMMENDATIONS
The study proposes a number of recommendations related to each factor to improve
the effectiveness of the use of management accounting at public units in the Ho Chi
Minh City, such as considering the structure of organization, as well as implementing
appropriate decentralization; improve the application of information technology to
accounting and management accounting in particular; reasonable balance between
costs and benefits that management accounting information brings to avoid
resource waste, as well as inefficient investment; Unit leaders must raise awareness
about the importance of management accounting, actively improve themselves with
management accounting through training, or advice from accounting departments
and related departments;The unit should recruit, arrange, organize training, guide
accounting staff in general and management accounting in particular to meet the
requirements of professional qualifications and knowledge of organization and
process activities of public units, thereby contributing to good implementation of

accounting work at the units.
REFERENCES
[1]

Nguyen Vu Thanh Giang (2017). Factors affecting the application of management
accounting in enterprises in Ho Chi Minh City. Master's thesis in economics, Ho Chi
Minh City University of Economics.

[2]

Hammad, S. A., Jusoh, R., & Yen Nee Oon, E. (2010). Management accounting system
for hospitals: a research framework. Industrial Management & Data Systems, 110(5),
762-784.

[3]

Tabachnick, B. G., & Fidell, L. S. (2007). Using Multivariate Statistics (5th ed.). New
York: Allyn and Bacon.

[4]

Wernerfelt, B. (1995). The resource-based view of the firm: Ten years after. Strategic
management journal, 16(3), 171-174.

[5]

Xu, H., Horn Nord, J., Daryl Nord, G., & Lin, B. (2003). Key issues of accounting
information quality management: Australian case studies. Industrial Management &
Data Systems, 103(7), 461-470.

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APPENDIX
Table 4. Scale reliability analysis
Item

Scale Mean
if Item
Deleted

Scale
Variance if
Item Deleted

Corrected Item
Total Correlation

if Item Deleted
Cronbach's
Alpha

Leadership awareness
Reliability Statistics
Cronbach's Alpha: 0.875
Item-Total Statistics
LA1: Managers appreciate the
usefulness of management

13.185
accounting technical tools

N of Items: 4

3.506

.732

.835

LA2: Managers have knowledge
of management accounting
technical tools

13.169

3.739

.558

.956

LA3: Managers have a
high demand for applying
management accounting

13.284

3.222

.791

.785

LA4: The manager accepts a
high level of investment in the
use of management accounting

13.301

3.244

.619

.916

Organization size
Reliability Statistics
Cronbach's Alpha: 0.852

N of Items: 4

Item-Total Statistics
OS1: The higher the turnover,
the higher the demand
for applying management
accounting in the unit.

11.638

3.674

.470

.871

OS2: The larger the number
of employees, the higher the
need to apply management
accounting in the unit.

11.561

3.185

.546

.855

OS3: The more years of
operation, the higher the need to
apply management accounting
in the unit.

11.740

3.418

.670

.434

OS4: The bigger the business
capital, the higher the demand
for managing accounting in the
unit.

11.525

3.863

.527

.867

Organizational structure
Reliability Statistics
Cronbach's Alpha: 0.827
Item-Total Statistics

670

N of Items: 4


VIETNAM NATIONAL UNIVERSITY - UNIVERSITY OF ECONOMICS AND BUSINESS
OSTR1: There is an
organizational structure divided
into administrative units

according to the nature of the
operation.

12.006

1.722

.601

.804

OSTR2: There is clarity in the
division of work in administrative
units within the unit.

12.047

1.714

.617

.797

OSTR3: There is coordination in
the relationship between the part
of the unit.

12.047

1.607

.671

.773

OSTR4: There is a professional
management for each part of the
unit.

12.041

1.543

.722

.748

IT applications
Reliability Statistics
Cronbach's Alpha: 0.649
Item-Total Statistics

N of Items:3

ITs1: Use the software to set up
the management accounting
reports.

7.747

1.326

.396

.644

ITs 2: Internal information
network allows connecting the
work of departments at the unit.

7.924

1.278

.530

.459

ITs 3: There is a separate
accounting software used for
management accounting

7.718

1.328

.460

.551

Accounting staff qualifications
Reliability Statistics
Cronbach's Alpha: 0.813
Item-Total Statistics QUAL
QUAL1: Accounting staff
has professional knowledge
in accounting and has an
12.506
understanding of the field of
management accounting.

N of Items: 4

.962

.551

.804

QUAL2: Accountants are able
to use techniques and methods
to implement management
accounting.

12.500

.891

.697

.735

QUAL3: Organizing the work
of fostering and improving the
qualifications and knowledge
of management accounting for
accountants.

12.494

.914

.641

.761

QUAL4: Accountants are trained
according to prestigious and
quality processes.

12.476

.914

.643

.760

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The cost of organizing a management accounting system
Reliability Statistics
Cronbach's Alpha: 0.831

N of Items: 4

Item-Total Statistics
COST1: Costs for management
accounting systems include
design costs

11.953

3.678

.618

.806

COST2: Cost for management
accounting system including
operating costs

11.941

3.618

.654

.789

COST 3: Expenses for the
management accounting system
include implementation costs

11.876

3.565

.686

.775

COST4: Costs for the
management accounting system
include the cost of inviting
experts to advise on the use of
management accounting

12.035

3.656

.680

.778

The use of management accounting at public health care units under the Ho Chi Minh City Department
of Health
Reliability Statistics
Cronbach's Alpha: 0.494

N of Items: 5

Item-Total Statistics
MAPs1: The ability of applying
costing system

15.900

1.144

.336

.432

MAPs2: The ability of applying
budgeting system

15.859

1.045

.373

.394

MAPs3: The ability of applying
performance evaluation system

15.871

1.013

.474

.350

MAPs4: The ability of applying
decision support system

15.906

1.104

.388

.407

MAPs5: The ability of applying
strategic management
accounting

16.206

.650

.166

.715

Source: SPSS

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