Наукові горизонти (Apr 2020)
TO THE ISSUE OF ACCOUNTING CONVERGENCE AND MANAGEMENT CONTROL
Abstract
The effectiveness of any business entity's development depends directly on its leaders or owners management decisions. In turn, each decision will be based on a set of information. Thus, the effectiveness of the management decision will depend on the degree of data reevaluation. Information within an enterprise is formed in the context of many subjects and objects through management methods, including accounting and control. From that how convergence will be provided and conflict between these two systems will be overcome, profitability of the enterprise will ultimately depend on. The purpose of the research is to establish the feasibility of relationships set-upping and the separation of contradictions in the convergence of management control and accounting systems for the formation of an information massif that will serve as a basis for management decisions by agents and principals. Key tasks include: establishing the agent’s specifics of the information requests and principals of business entities; defining the role of accounting harmonization in accounting system convergence and management control; consideration of the consistency order of financial and management accounting within a single accounting system. Research methods were: monograph, comparison, analysis and historical approach. The peculiarities of the information requests of agents and business entities principals are considered. It has been determined that the majority of historical research as for the management decision-making transformation is related to the development of the management accounting system. In accordance with the theory of agency relations, the authority of making management decisions relies on the entity agents. In doing so, the principal is obliged to monitor the agent's activities so that the asymmetry of information between the principal and the agent is reduced to a level that allows the agent to be held accountable for his actions. The role of accounting harmonization in accounting system convergence and management control is determined. It is proved that accounting and management control systems have a transformative attribute. Their indicators not only reflect what has happened, but they actually influence on future developments. However, it should be remembered that the contradictions and conflicts of the two systems adversely affect the process of accounting systems convergence and management control. The order of consistency of financial and management accounting within a single accounting system is considered. It is established that such consistency will facilitate accounting convergence and management control within the entity. The relationship between financial accounting and management controls influences on the organization and data use from these two systems and gives an understanding of how these systems are affected by internal and external factors. The prospects for further research in this scientific area are to establish the possibility of using international experience of accounting systems convergence and management control in the management practice of domestic enterprises.
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