International Accounting and Management

This paper provides scholars and practicing accountants a comprehensive and objective picture of current Japanese management accounting methods and practices. The picture is comprised of discussions of three fields related to specific aspects of organizations (corporate-level management methods and practices, front-line management accounting methods and practices and management accounting methods and practices at small and medium-sized enterprises), as well as the pervasive changes to all organizations due to information and communication technology (ICT) and disclosure rule changes. Firstly, we discuss the development and status of corporate-level management methods and practices used by large Japanese companies. Corporate-level management accounting methods and practices discussed include planning and budgeting, hoshin kanri, the balanced scorecard, performance management, and compensation management. Second, we move to topics of front-line management accounting methods and practices often observed in Japan. The topics include the relationship between management accounting and Cost Accounting Standards, JIT production and business continuity management (BCM) and quality control. Third, since a majority of companies in Japan are small and medium-sized enterprises (SMEs), we discuss current use of management accounting methods and practices at SMEs. In the past decades, management accounting practices in Japan have changed markedly by adapting to innovations in information and communication technology (ICT). More recently, revised disclosure rules also caused significant changes to Japanese management accounting practices. Thus, throughout this paper, we examine the impacts of ICT and new disclosure rules to Japanese management accounting practices. The knowledge and analysis in this study provide an insightful basis for the improvement and development of managerial accounting methods and practices.

Manufacturing companies in Nigeria are faced with the contemporary issues of controlling costs due to the exchange rate volatility leading to a continuous rise in inflation and its attendant impact on the cost of operations. The 2021 Annual Reports and Accounts of Vitafoam Nigeria Plc. revealed that the company's profit is squeezed and on a downward trajectory due to the cost of raw materials. This paper carried out a Financial analysis of the annual report and accounts of Vitafoam Nigeria Plc for 5 years (2017-2021) using Vertical, Horizontal, and Ratio analyses. All findings using the three analytical tools revealed that the company has maintained a positive operating profit and steady growth until 2021 when despite growth in Revenue, profit indicators did not grow in the expected proportion as was the case in preceding years. This was basically due to the impact of the cost of sales driven by the unavailability and volatility of foreign exchange and its attendant impact on the cost of raw materials and other production inputs. Distribution and Administrative costs remained stable and even in a downward slide in 2021 relative to preceding years. It is therefore recommended that the management of Vitafoam Nigeria Plc. aside from working to increase sales revenue, must tackle the issues of cost, especially in sourcing foreign currency to finance their inputs. They may have to explore the option of creating a market internationally for their products or diversifying to export other local contents to create room for foreign exchange inflows to finance the purchase of raw materials which is usually imported directly or through authorized distributors.

This paper provides scholars and practicing accountants a comprehensive and objective picture of current Japanese management accounting methods and practices. The picture is comprised of discussions of three fields related to specific aspects of organizations (corporate-level management methods and practices, front-line management accounting methods and practices and management accounting methods and practices at small and medium-sized enterprises), as well as the pervasive changes to all organizations due to information and communication technology (ICT) and disclosure rule changes. Firstly, we discuss the development and status of corporate-level management methods and practices used by large Japanese companies. Corporate-level management accounting methods and practices discussed include planning and budgeting, hoshin kanri, the balanced scorecard, performance management, and compensation management. Second, we move to topics of front-line management accounting methods and practices often observed in Japan. The topics include the relationship between management accounting and Cost Accounting Standards, JIT production and business continuity management (BCM) and quality control. Third, since a majority of companies in Japan are small and medium-sized enterprises (SMEs), we discuss current use of management accounting methods and practices at SMEs. In the past decades, management accounting practices in Japan have changed markedly by adapting to innovations in information and communication technology (ICT). More recently, revised disclosure rules also caused significant changes to Japanese management accounting practices. Thus, throughout this paper, we examine the impacts of ICT and new disclosure rules to Japanese management accounting practices. The knowledge and analysis in this study provide an insightful basis for the improvement and development of managerial accounting methods and practices.

(1) First research question is “to confirm what current Japanese management accounting practices are.”
    →At the corporate level, medium-range business & profit planning and annual budgeting (traditional methods) are pervasive.　At the front-line, standard costing and company-wide quality control are pervasive.

(2) Second research question asked “ to what extent  the “so-called” Innovative and/or “advanced” practices are actually used.
 →This study concludes, Japanese manufactures have not been much attracted to the BSC, EVA and/or ABC (that were developed in the United States).

1. Introduction: objectives, research questions and methodology
(1)Objectives of the study;
-to delineate what current Japanese management accounting practices (J-MAP) are, and
-to provide overseas scholars and practicing accountants an objective and comprehensive picture of the Japanese practices (should not overly emphasize a cultural aspect to explain cross-national differences).
(2) Research questions; - confirm what current accounting practices are.
- examine to what extent the co-called innovative and/or advanced practices (the Balanced Scorecard*, Economic Value Added*, Activity Based Costing*) are actually used.
(3) The method used is a descriptive study since our primary concern is to find out "what is."

【Abstract: This paper provides scholars and practicing accountants a comprehensive and objective picture of current Japanese management accounting methods and practices. The picture is comprised of discussions of three fields related to specific aspects of organizations (corporate-level management methods and practices, front-line management accounting methods and practices and management accounting methods and practices at small and medium-sized enterprises), as well as the pervasive changes to all organizations due to information and communication technology (ICT) and disclosure rule changes.
Firstly, we discuss the development and status of corporate-level management methods and practices used by large Japanese companies. Corporate-level management accounting methods and practices discussed include planning and budgeting, hoshin kanri, the balanced scorecard, performance management, and compensation management. Second, we move to topics of front-line management accounting methods and practices often observed in Japan. The topics include the relationship between management accounting and Cost Accounting Standards, JIT production and business continuity management (BCM) and quality control. Third, since a majority of companies in Japan are small and medium-sized enterprises (SMEs), we discuss current use of management accounting methods and practices at SMEs.
In the past decades, management accounting practices in Japan have changed markedly by adapting to innovations in information and communication technology (ICT). More recently, revised disclosure rules also caused significant changes to Japanese management accounting practices. Thus, throughout this paper, we examine the impacts of ICT and new disclosure rules to Japanese management accounting practices.
The knowledge and analysis in this study provide an insightful basis for the improvement and development of managerial accounting methods and practices.】

This paper was developed based on our draft of  "Management Accounting in Japan: Current Practices" that will apper as one chapter in the  "Routledge Handbook of Accounting in Asia" (edited by Professor LIN Zhijun). The book will be published in2017 (
https://www.routledge.com/Routledge-Handbook-of-Accounting-in-Asia/Lin/p/book/9781138189034). Full paper will be available to you after the publication of the book.