The “economic paradigm” in management accounting: Return on equity and the use of various management accounting artifacts in a Brazilian context

Abstract

Purpose

This paper seeks to examine the profile of artifacts with superior returns in order to identify the usage of management accounting in a Brazilian context.

Design/methodology/approach

This paper is part of an empirical research project based on a probabilistic sample (119 entities) from medium and large Brazilian companies, selected according to economic sector and revenues. The management accounting artifacts were identified according to the five stages of International Management Accounting Practice 1 (IMAP 1, International Federation of Accountants (IFA), 1998). Logistic regression was applied to identify the artifacts most adherent to companies with the outstanding profile.

Findings

In the analysis of the five stages of IMAP 1, only the fifth stage, value management, provided the significance level to accept the hypothesis. In this stage, the artifacts that were accepted with a significance level of 90 percent were return on equity and balanced scorecard.

Research limitations/implications

The field research was applied only in the Brazilian market.

Practical implications

Especially for researchers, this paper raises some important questions, and aims to stimulate future studies in management accounting.

Originality/value

This paper contributes by presenting research from outside the Anglo‐Saxon world, and by analyzing the artifacts' profile with approaches balanced between positive and qualitative accounting.

Citation

Frezatti, F. (2007), "The “economic paradigm” in management accounting: Return on equity and the use of various management accounting artifacts in a Brazilian context", Managerial Auditing Journal, Vol. 22 No. 5, pp. 514-532. https://doi.org/10.1108/02686900710750784