An analysis of the management accounting systems used by micro-joiners in Malta

Abstract

This dissertation seeks to analyse the management accounting systems used by micro-joiners in Malta. This will help accountants in knowing what methods such owner-managers prefer to apply so that they are better prepared when faced with an advisory role. The objectives of this study were met through a qualitative research approach. Nine semi-structured interviews were held, eight of which were held with ownermanagers of micro-businesses in the joinery industry whilst one was held with the instructor of a local joinery course. The owner-manager’s experience, business size, business objective, and extent of business success are the main determinants of the quantity and quality of management accounting information that the owner-manager will use. Both cash accounting and non-cash accounting measures are used and the choice between these two methods depends on the owner-manager’s personal preference. Both direct and indirect cost accounting systems were observed, and the choice depended on the owner-manager’s personality, their available time, and what they were used to doing. Cost-plus and target costing pricing systems were observed in this study. Choice of system depended on the business’ reputation, the type of product produced, the targeted client, and the business’ objectives. The external accountant was rarely seen as a person with whom the ownermanager could consult with regards to the management of their business. If the accountant’s help is not wanted, then there is very little that the accountant can do to improve their usefulness to the business. However, it was noted that the participants seemed open to help from their accountant, they just did not know what the accountant could do to help. This study may, therefore, be used to help external accountants provide better advice to the owner-manager with their choice of costing and pricing method.