Abstract:
Management accounting provides companies with the best opportunity to succeed in
the market in order to provide customers with the best quality goods and services at
reasonable prices. The general objective of this study was to investigate the impact of
management accounting application on financial performance of selected listed
companies in Sri Lanka.
This study adopted a descriptive survey design. The target population for this study
was the 286 listed companies in Sri Lanka. In order to come up with the sample size,
the stratified random sampling approach was used because the population in various
listed companies was considered heterogeneous, reflecting that a simple random
sample is unrepresentative. The study therefore involved 164 listed companies in Sri
Lanka. The study collected primary data from the respondents and secondary data
from the annual reports.
The data collected was both quantitative and qualitative. Analysis was done using
Statistical Package for Social Sciences (SPSS), allowing the researcher to present the
information in form of tables and figures. The study concludes that information for
decision making is the most highly used management accounting practice amongst the
listed companies in Sri Lanka, followed by strategic analysis, performance evaluation,
budgeting and costing respectively. The study identifies key factors that influence
performance and risky areas that require improvements on return on equity, ROE Q.{et
income I Average Equity) has increased as a result of application of management
accounting practices. This study recommends the creation and enhancement of
awareness among firms of the importance of strategic analysis as it has the highest
influence for the increase in financial performance amongst the listed companies ir1
Sri Lanka.
