The impact of contingencies on management accounting system development

Gavin Reid, Julia Smith

Research output: Contribution to journalArticlepeer-review

78 Citations (Scopus)


Four hypotheses relevant to the contingency theory of management accounting are presented. Data relate to the period 1994–98 for a sample of new Scottish microfirms. First, correlation analysis is applied to test the hypothesis that the introduction of management accounting system (MAS) developments is related to the timing of contingent events such as cashflow crises, shortfalls of finance, and innovation. Second, cluster analysis is used to test the hypothesis that contingencies cluster to form three configurations of small firms, adaptive, running blind, and stagnant. Third, regression analysis is used to test the hypothesis that an index of organizational form, measured by weighted headcount, is explained by aspects of the generic contingencies, technological uncertainty, production systems, business strategy and market environment. The fourth hypothesis is that MAS complexity is determined by sub-unit interdependence, market dynamics, and work methods. The four hypotheses tested support several aspects of contingency theory, as modified to a small firms context.
Original languageEnglish
Pages (from-to)427-450
Number of pages14
JournalManagement Accounting Research
Issue number4
Publication statusPublished - Dec 2000


  • management accounting system
  • contingency theory
  • small firm

Fingerprint Dive into the research topics of 'The impact of contingencies on management accounting system development'. Together they form a unique fingerprint.

Cite this