Impact of management accounting practices on financial performance of nepalese listed manufacturing companies

Abstract

This study investigates at how management accounting practices affect the financial performance of publicly traded manufacturing companies in Nepal. It looks at the relationship between budgeting practices, forecasting techniques, and internal control systems and financial performance. These are three important areas of management accounting. The study uses a quantitative method, sending structured questionnaires to finance professionals at ten publicly traded manufacturing companies. I used SPSS to look at the data. I used descriptive statistics, reliability testing, Pearson correlation, and multiple regression analysis. The study's results show that budgeting practices and internal control systems are widely used and have a positive effect on financial performance. Internal control systems were the most important factor, followed closely by budgeting practices. People said that forecasting methods were very useful, but they didn't work well together and didn't have a strong statistical link to financial performance. The regression model showed that the three accounting practices together accounted for about 45% of the differences in financial performance. However, the model as a whole wasn't statistically significant, probably because the sample size was too small. The results back up both Contingency Theory, which says that internal systems should work well with external conditions, and the Resource-Based View, which says that internal capabilities like accounting systems are important for strategy. The study finds that Nepalese manufacturing companies can greatly improve their financial performance by using management accounting practices correctly, especially budgeting and internal controls. It also makes suggestions for practice, policy, and future research. It stresses the need for better forecasting methods and wider use of strategic accounting tools. Keywords: Management accounting practices, manufacturing companies, budgeting practices, forecasting techniques, internal control systems, financial performance.