The Impact of Sustainable Management Accounting Practices on Firm Performance: The Mediating Role of Managerial Decision Quality in Industrial Companies in the Kurdistan Region of Iraq
Impact of Sustainable Management Accounting Practices on Firm Performance
DOI:
https://doi.org/10.63841/iue3261199Keywords:
Kurdistan region of Iraq, Management accounting, Managerial decisions, Mediating effects, Structural equation modelling, Sustainability.Abstract
This study aims to examined the impact of Sustainable Management Accounting Practices (SMAPs) on firm performance in industrial companies focusing on managerial decision quality’s mediating impact on SMAPs’ impact on firm performance. A structural equation model was estimated using 240 questionnaire responses collected from senior and middle managers of manufacturing, construction, energy and agro-processing industries in the Kurdistan Region of Iraq (KRI). The study findings provide robust empirical evidence that adopting SMAPs significantly improves the quality of decisions made and enhancing financial and non-financial outcomes across industrial companies. This study underscores that integrating environmental, social and economic metrics with management accounting systems is of significant importance in improving firm performance, a key element essential in driving competitiveness and resilience in industrial sectors. SMAPs’ role in improving managerial decision quality highlights sustainability-informed accounting systems’ role in enriching managerial decisions’ informational basis, which helps to enhance the comprehensiveness, timeliness and forward-looking nature of managers’ actions. Our study extends direct effects models to provide a comprehensive understanding of how industrial managers can uitilise SMAPs to create value by empowering them with better information and high-quality strategic choices, which further translates to sustainable business practices. Integrating sustainability measures should be encouraged so as to move away from traditional accounting systems and help firms make informed strategic decisions. Policy makers should establish and enforce sustainability standards across all industries to encourage compliance and ensure the development of evaluation measures.
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