Management accounting practices of nepalese manufacturing companies

Abstract

This study investigates the perception, relationship, and impact of Management Accounting Practices (MAPs) on the financial performance of Nepalese manufacturing companies. In today’s competitive business environment, MAPs have emerged as critical tools for enhancing decision-making, controlling costs, improving strategic planning, and achieving financial efficiency. The study focuses on five key dimensions of MAPs: Costing, Budgeting, Performance Evaluation, Information for Decision Making, and Strategic Analysis. A quantitative research approach was adopted using both descriptive and causalcomparative

research designs. Data were collected from 384 management personnel working in manufacturing firms within Kathmandu Valley using a structured questionnaire based on a 5-point Likert scale. The questionnaire assessed the perception and frequency of MAP usage and its influence on financial outcomes. SPSS version 25 was used for data analysis, applying descriptive statistics, correlation, and regression analysis. The results revealed that management personnel generally have a favorable perception of MAPs, with high mean scores for information-based decision-making (4.24) and financial performance outcomes (4.29). Correlation analysis indicated significant positive relationships between MAPs and financial performance, with strategic analysis showing the strongest association (r = 0.702). Regression results confirmed that costing, budgeting, strategic analysis, and information for decision-making had statistically significant impacts on financial performance, whereas performance evaluation had no significant effect. The regression model accounted for 59.4% of the variance in financial performance (R² = 0.594), indicating strong explanatory power. The study concludes that effective implementation of MAPs significantly contributes to financial performance in Nepalese manufacturing companies. Practical implications suggest enhancing strategic planning and decision-support tools, while theoretical implications validate the strategic role of MAPs in organizational success. The study provides a foundation for future research focusing on sector-specific and longitudinal effects of MAPs. Keywords: Management Accounting Practices, Financial Performance, Strategic Analysis, Decision-Making, Nepalese Manufacturing Firms