JultikaUniversity of Oulu repository

Abstract

The aim of the study is to explore, discuss and conclude on the role of management accounting in a start-up company setting. This study is conducted via analyzing prior scientific literature findings on the characteristics of a start-up and different kinds of management accounting methods divided into two groups: management accounting methods actually used by start-ups and generally popular management accounting methods. The management accounting methods are examined by using analytical framework. The analytical framework is a standardizing tool for the management accounting methods and makes the comparative analysis possible.

This study applies a simplified systematic literature review method to summarize the previous scientific literature findings. The method’s results are provided in a table in the end of every chapter the method is used. After the previous literature findings on the start-up characteristics and management accounting methods are presented, the role of management accounting is discussed via using the analytical framework. This framework is based on Lebas’ (1995) research on the performance measurement. The analytical framework consists of five different dimensions. These dimensions are considered as the fundamental reasons for performance measurement. Using the analytical framework, this study examines, for example, the fundamental reason of use, the performance and the effectiveness of the different management accounting methods. Finally, these findings are reflected to the characteristics of a start-up company. This way the study derives the role of management accounting on the basis of previous scientific literature.

The results indicate that the role of management accounting consists of different traits. According to the study results, the role of the management accounting in a start-up company is to provide the most useful and accurate information as efficiently as possible. Additionally, management accounting methods should not be only focused on past performance as the historical performance analysis is considered less meaningful than planning of the future. The internal performance analysis is considered more important than external comparation to other companies. Finally, management accounting shouldn’t be fixed to company strategy too heavily. Moreover, management accounting in a start-up should be flexible and apt for changes in short intervals.

The results of the study are satisfying and according to the expectations. The study itself provided no particular surprises. Being a summarizing study on the previous scientific literature, the Pro gradu could be used as a manual for start-up management. Especially the finance professionals in start-ups would benefit delving into the research as it thoroughly maps the role of management accounting based on the comprehensive scientific literature.