Consolidating Management Accounting and Economic Security System in a Business Enterprise: A Conceptual Framework

Keywords: management accounting, management decisions, economic security in a business enterprise, accounting, accounting reports

Abstract

The effectiveness of business management in precarious economic conditions can decrease due to the lack of a well-established economic security system and relevant accounting information that is also an object of special protection. Accounting and security functions in a business enterprise have organic links that need to be shown in organizational measures aimed at elaborating the accounting support for the economic security system in way to achieve its integrity and efficiency.  

The article presents the author’s framework for integrating the components of management accounting and economic security in a business enterprise, to enhance the effectiveness of management decisions procedures and protect business operation from potential economic crimes. The proposed approach to organization of the management accounting in a business enterprise, to enhance its economic security, includes a series of phases: identifying problems specific to the economic security, substantiating the economic security objectives, building up an economic security system, constructing algorithms for assessment of the economic security performance, setting up the measures for implementation of the economic security requirements, assessing the economic security performance and control of the measures involved in it.         

It is stressed that an economic security system needs to take into consideration tax-specific risks and incorporate schemes for avoidance of these risks through formulating tax clauses and including them in business contracts. This will help reduce potential losses caused by claims work and provide a tool for protecting rights and interests of a business enterprise through restoring or recognizing the rights for the amounts of money declared in tax reports, thus assuring the proper security of business enterprises in the conditions of uncertainties and volatile tax laws.

It is demonstrated that this framework is capable to enhance the effectiveness of management accounting functions in a business enterprise, including compilations of management reports for control, presentation of analytical information for management decision-making, forecasting and choice of effective decisions for future development, avoidance of losses, assurance of financial viability.    

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References

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Published
2021-12-22
How to Cite
PYLYPENKOО. (2021). Consolidating Management Accounting and Economic Security System in a Business Enterprise: A Conceptual Framework. Scientific Bulletin of the National Academy of Statistics, Accounting and Audit, (3-4), 45-50. Retrieved from https://nasoa-journal.com.ua/index.php/journal/article/view/248