Comparative Management Accounting – Literature Review on Similarities and Differences Between Management Accounting in Germanic and Anglophone Countries Andreas Hoffjan, Professor WHU – Otto Beisheim School of Management, Vallendar Pascal Nevries, Assistant Professor WHU – Otto Beisheim School of Management, Vallendar René Stienemann, Dipl.-Kfm cronos billing consulting GmbH, Muenster Comparative Management Accounting – Literature Review on Similarities and Differences Between Management Accounting in Germanic and Anglophone Countries This paper compares management accounting practices in Germany, the UK and the USA and reveals a range of differences and similarities The most significant difference is in the use of either the general-ledger concept or the two-circle system Through following these varying approaches, further differences arise, e.g., the total lack of imputed costs in the Anglo-Saxon countries and different bases for calculated profits in Germany German management accounting exerts a stronger influence on management, because in the Anglo-Saxon countries financial accounting figures are not regarded as being useful for internal decision making Thus management in Germany relies much more heavily on internal calculations provided by management accounting Management accountants in the USA and UK exert a much deeper impact on operational matters and are involved in broader fields of activity than their German counterparts While Anglo-Saxon management accounting is also directed at shareholders, German management accounting is addressed at internal target groups alone Apart from these differences, several important similarities could also be observed Management accountants in all three countries have reasonably similar objectives and goals Among the most important are the provision of information, participation in the management process and attempts to ensure rational decision making by management In general, a converging approach in management accounting practice is observable Introduction The competitive environment in which companies operate is steadily becoming more challenging and demanding Major corporate take-overs increase the demand for more sophisticated and advanced management accounting information in order to react appropriately to external market pressures Multinational companies have to cope regularly with various different institutional environments, management practices, and cultural (mis)understandings between the respective countries While, in this context, the field of financial accounting has already attracted considerable attention from the academic world at a comparative international level, the area of internal management accounting has largely been limited to approaches focussing only on individual countries These approaches have been analysed thoroughly by national academic researchers and, as a consequence, influenced practices in other countries However, in order to initiate a debate on the subject and to highlight best practices, as well as innovations and inefficiencies in the management accounting world, a sophisticated comparison, drawing on the differences and similarities between the observed countries, has only recently been conducted in the management accounting literature Furthermore, “different labels, in different languages, are used to refer to management accounting around the world” (IFAC, 1998: 84) The relatively young discipline of comparative management accounting attempts to fill this gap in management accounting research, by determining the degree of diffusion of applied concepts and practices in different countries Divergences should be analysed in order to learn from other language areas and to understand the approaches used The present paper analyses the different characteristics of management accounting in Germany, the United Kingdom (U.K.) and the United States of America (U.S.A.) The intention of this paper is to highlight the differences between the observed countries and the effects they induce The paper is organized as follows First, we explain the choice of the selected countries and the methodology used Section then introduces the general concept of comparative management accounting Based on the terminological specification of nationally diverging definitions of management accounting labels, the following section describes and compares the main aspects and characteristics of management accounting in Germany, the U.S.A and the U.K Finally, section summarizes the findings Methodology The present study concentrates on Germany, the U.K and the U.S.A These countries have been selected due to various reasons For a start, the U.S.A is the world’s leading economic power and thus of fundamental significance with respect to management accounting Many countries have been and still are influenced by new developments in American management accounting (SHERIDAN, 1995: p 293) Therefore, the inclusion of the U.S.A is considered essential in this comparative study To a lesser degree, this also applies to the UK Furthermore both, the U.S.A and the U.K., continuously influence management accounting developments in other countries, because English is the dominant language in the world of business (PISTONI and ZONI, 2000: 311) In addition, it is often claimed that management accounting has its roots in the U.S.A and has influenced accounting practices and developments in German management accounting (Otto, 2000: 25) Secondly, Germany and the U.K., although having seemingly different management accounting structures and institutions, are among the dominant countries in Europe with respect to management accounting importance (BLAKE ET AL., 2000: 123) In this context, many studies have revealed a significant impact of German management accounting on several other countries in the world (KEYS and MERWE, 1999: 2; BLAKE ET.AL., 2000: 123) Because the U.S.A and U.K can be assumed as being fairly similar due to the common language, similar financial accounting orientation and the cultural proximity (CARR and TOMKINS,1998: 215-6; HOFFJAN and WÖMPENER, 2006: 238), in this paper, both countries will be treated commonly as ‘Anglo-Saxon’ or ‘Anglophone’ countries, if nothing else is stated to the contrary As comparative management accounting is a relatively young discipline, there are few studies dealing with this topic (BLAKE ET AL., 2000: 122) In order to provide an overview of the state of the art in comparative management accounting, the following literature review identifies current research streams and future research questions The first step is to develop a framework for classifying the relevant literature The few studies published so far in this field of research not claim to be representative of comparative management accounting in general, and also vary with respect to objectives, timeframe and methodological approaches (STOFFEL, 1995: 1) Nevertheless, some general tendencies with respect to functional aspects of management accounting can be identified and will be discussed in this paper STOFFEL’s (1995) study is one of the first to concentrate at length on controllership on an international level In his comparative work, STOFFEL analysed controllership in Germany, the U.S.A and France On a broader inter-country scale, BHIMANI (1996) focussed on differences and similarities in management accounting in Europe However, BHIMANI merely collected and published nation-specific results from eleven European studies without explicitly stressing the differences and similarities in detail A similar study from LIZCANO (1996) deals with comparative management accounting in Latin America More recent empirical studies focussing explicitly on the comparative element of management accounting can be found in AHRENS (1997; 1999), OTTO (2000), ZIRKLER (2002), JONES and LUTHER (2004) and HOFFJAN and WÖMPENER (2006) In order to obtain an overview of the relevant comparative management accounting literature analysed in this paper, the studies were grouped into six different categories as presented in Figure 1: [Include Figure here] The categories are ordered with decreasing relevance to our selected countries and comparative management accounting in general Following this categorisation, all papers in the first group cover the countries Germany, the U.S.A and / or U.K and deal simultaneously with comparative management accounting In the literature review, 30 papers could be included in the first category The second group includes papers that deal with national management accounting from the respective countries Although not dealing explicitly with comparative management accounting, these papers are nevertheless useful for a deeper analysis Because they represent the characteristics and particularities of the specific countries, these papers can be compared to one another In the third category, aspects closely related to management accounting are discussed from the respective country perspective Topics such as culture not deal explicitly with management accounting, but nevertheless have a direct or indirect influence on different perceptions of accounting in the various countries In the fourth category, the comparative element is highlighted again, although these papers not deal explicitly with the countries that form the focus of this paper This category is included, due to potential cross-references from other countries If it is possible to observe how management accounting differs or converges between other countries, meaningful comparisons could possibly be made The fifth and sixth categories are included in this categorisation for reasons of completeness, but are not considered as sufficiently relevant to merit further examination Principles of comparative management accounting 3.1 Comparative management accounting Comparative management accounting compares management practices and principles between countries and cultures in order to initiate discussion, to highlight best practices, innovations and inefficiencies in management accounting Managers can also achieve competitive advantages by applying innovative management accounting techniques from other countries or cultures (AMAT ET AL., 1999: 20) Additionally, comparative management accounting aims at guiding techniques and practices towards convergence (HOFFJAN and WÖMPENER, 2006: 241) 3.2 Management accounting versus controlling Terms like management accounting or controlling are neither equally used nor understood in all countries (AMAT ET AL., 1999: 19) In Germany for instance, the label management accountant is not commonly applied as a description of the occupation – neither in the English term nor the German translation (SHERIDAN, 1995: 1; BIRKET 1998: 487) In order to compare the work of management accountants in the three countries, equivalences for the corresponding Anglophone meanings must be found In this respect, German controlling is generally viewed as similar to the Anglophone management accounting in the relevant academic literature (SHERIDAN, 1995: 1; OTTO 2000: 38; WILLSON ET AL., 2003: 5; KÜPPER, 2005: 6) The discussion of controlling-related problems and innovations in Anglophone journals like Management Accounting Research, Management Accounting Quarterly or Advances in Management Accounting can be regarded as an indication of the terminological proximity of German controlling and Anglo-Saxon management accounting (KÜPPER, 2005: 6) Although there is not such a demand for theoretical definitions in the U.S.A that are comparable to those used in Germany (Otto, 2000: 25), the following chapter tries to examine whether deeper differences are identifiable from an initial view of the definition and terminology of both terms 3.2.1 Management accounting terminology and definitions in the U.S and the U.K In the Anglophone literature, it is evident that various terms are used for management accounting Labels like ‘internal accounting’, ‘enterprise reporting’ and ‘managerial accounting’ are widely used as synonyms for management accounting (ZIRKLER, 2002: 17) Given these different labels that are used for the same basic concept, AMAT ET AL (1999: 19) also observed that “the term management accounting implies different meanings across national boundaries” In general, two different perceptions of the scope of management accounting can be observed in the relevant Anglo-Saxon literature (MUSSNIG, 1996: 13) The first perspective defines management accounting from a narrow point of view, such that the term refers mainly to internal cost accounting and internal calculations (MUSSNIG, 1996: 13; HORVÁTH, 2003: 79) A second, much broader perspective is more common in the Anglo-Saxon countries According to the NATIONAL ASSOCIATION OF ACCOUNTANTS (1981: 4) management accounting is defined as: “[…] the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of financial information used by management to plan, evaluate, and control within an organization and to assure appropriate use of and accountability for its resources Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies, and tax authorities.” In this definition, which is characteristic of management accounting in the Anglo-Saxon countries (MUSSNIG, 1996: 13; Zirkler, 2002: 18) and will therefore be used in this paper, a clear focus on financial information becomes apparent Furthermore, it is noteworthy that the definition includes non-management reporting for taxation and regulatory purposes as part of management accounting (MUSSNIG, 1996: 13) Management accounting is therefore an integral part of the management process It can be regarded as an umbrella term for the general managerial process of planning, evaluating and controlling, as well as of reporting Another label which is commonly applied in both the U.S.A and U.K., is the term controller WILLSON ET AL (2003: 11) observe that, for the chief accounting officer (CAO) especially in large companies, “the most common title used is controller” Although the label controller can therefore be regarded as widespread in the Anglo-Saxon countries, its application is commonly reserved as a description of the highest-ranking management accountant in the corporation, rather than for all management accountants The authors also acknowledge that, while various titles can be applied to the position of the CAO, the title controller may be an unfortunate one, because it emphasises the aspect of ‘control’ more than other also relevant responsibilities like reporting, management and planning The label controlling also raises some important issues While the term controller is commonly applied as stated above, controlling is only used as a description of the leadership process of the final stage in the managerial decision making process (STOFFEL, 1995: 9; KÜPPER, 2005: 6) Therefore, controlling and controller are only similar with respect to the origin of the term in the Anglo-American countries, but not at the conceptual level (SIEGWART, 1982: 98; STOFFEL, 1995: 10) This difficulty concerning the job description of the controller is quite often referred to in the Anglo-Saxon literature ”The modern controller does not any controlling in terms of line authority except in his own department“ (HORNGREN ET AL 2005: 13; STOFFEL, 1995: 10) Finally, the term ‘controllership’ rather than controlling most often characterises the field of activity of the controller or management accountant in the Anglo-Saxon countries (OTTO, 2000: 26) 3.2.2 Management accounting terminology and definitions in Germany 10 In contrast to the Anglophone label ‘management accounting’, business managers in Germany generally use the term ‘controlling’ as a description of the field of activity of management accountants (BIRKET, 1998: 487; AHRENS and CHAPMAN 2000: 482; KÜPPER, 2005: 3-.4f) In this context, controlling describes the relatively young discipline of ‘Betriebswirtschaftslehre’ (business administration) Contrary to the purely practical approach in the U.S.A and U.K., the basics of controlling have been developed within the academic literature (SCHERRER, 1996: 100; AHRENS and CHAPMAN 2000: 482; JONES and LUTHER 2004: 4; KÜPPER, 2005: 6) and its definitions and interpretations are characterized by its great variety and diversity A widely-accepted definition of controlling in the German literature has, therefore, not been so far discernible until the present (FREIDANK, 1993: 400) Nevertheless, it can be observed that the majority of definitions focus on the decisionsupport function (BERENS ET AL., 1995: 144), the coordinative function (HORVÁTH, 2003: 148-9; KÜPPER, 2005: 5) or define controlling as safeguarding managerial rationality (WEBER, 2004: 47) While controlling concentrates more on internal accounting matters, in the Anglo-Saxon countries, management accounting includes internal as well as external accounting aspects and can be seen as a general term for accounting as a whole (MUSSNIG, 1996: 13) Comparing controlling with management accounting definitions, it can therefore be argued that, on the one hand, management accounting is defined and understood in a functional broader context, whereas controlling definitions, on the other hand, are comparably characterised by their greater universality (e.g WEBER, 2004: 48) Despite this broader scope of management accounting, some similarities are evident All definitions cover the aspect that the responsibility of management accountants or controller’s is to support managers with relevant information so as to promote objective and fair decisionmaking 25 4.3.2 Interrelations and connections to adjacent departments Analysing the organisational integration of management accountants in the hierarchy of the corporation, entails firstly, examining the name given to the department in which management accountants work This term can then be interpreted as an indicator of both the activities and the interrelations within the company In German companies, the department in which management accountants are located is nearly always labelled ‘controlling department’ or something similar which includes the term “controlling”, such as ‘Betriebswirtschaft/Controlling’ (STOFFEL, 1995: 140) In the U.S.A., by contrast, the nomenclature can vary significantly STOFFEL’s findings indicate that, 25 % of the departments for management accountants are also called ‘Controller’s department’, whereas 42 % are labelled ‘Finance Department’ and 28 % ‘Accounting Department’ In the U.S.A., controllership remains closely interwoven and connected with financial aspects Moreover, the controller is often seen as a financial executive, who reports to the CFO at the same hierarchical level as the treasurer (SIEGWART, 1982: 99; STOFFEL, 1995: 143; WILLSON ET AL., 2003: 18) An analysis of the situation in Germany reveals similar variations in the practical environment (KÜPPER, 2005: 518) As a common denominator, controlling departments can normally be observed at the same hierarchical level as finance departments In contrast to the U.S.A., this does not necessary include any interrelations between the departments (SHERIDAN, 1995: 291) This is supported by empirical findings, according to which 54 % of German controlling departments have no organisational connection to financing, whereas such a strict separation was evident in only % of the U.S corporations (STOFFEL, 1995: 144) Controlling can therefore be found either at the same hierarchical level as the finance department, being an administrative department supporting the head office, or in conformity with the Anglo-Saxon 26 model, as the same level as the treasurer who reports to the accounting department (KÜPPER, 2005: 528) 4.3.3 Size of management accounting departments Comparable to the field of activity which was identified to be broader in the Anglo-Saxon countries than in Germany, management accounting departments also normally operate with more employees in Anglophone countries (STOFFEL, 1995: 117) This is empirically supported by STOFFEL (1995), who found that, on average, 29.3 people are employed in U.S management accounting departments, compared to 12.7 employees in German controlling departments (STOFFEL, 1995: 150) 4.4 Role of the controller in the observed countries The fields of activity, the instruments used to achieve goals and the organisational integration of management accounting may be similar or vary between countries However, the topics discussed above give only a limited indication of the self-perception and the role that management accountants actually play within the organisation In all three countries, both the changes and the development of the role of management accountants are important and must be taken into consideration Variances and differences in the role of the accountants can be seen as an indicator of the degree to which management accounting itself is converging or diverging throughout the observed countries In this context, there is consensus among management accounting scholars that the former, familiar role of the controller as a pure “score keeper” is at least partly obsolete in all countries (KAPLAN and ATKINSON, 1998: 1; WEBER, 2004: 5) Observing the current status of management accountants and their role within corporations, some differences between the three countries are identifiable 4.4.1 Role of management accountants in Germany 27 The relevant literature and practice concur that, in Germany, the management accountant has evolved from a pure score keeper of past performance into a central contact person who participates in the management process (MUSSNIG, 1996: 15; WEBER, 2004: 21) In this context, the mission statement of the ‘INTERNATIONALER CONTROLLER VEREIN’, conveys an image of the German management accountant who concentrates on the creation of transparency and visualisation of economic consequences, rather than operational involvement in actual decision making Furthermore, in Germany, the role of the management accountant is characterized as that of a modern coordinator and moderator of plans and processes within the corporation By maintaining and creating the management accounting system, the management accountant should be able to support decision makers within the corporation by providing relevant information on a wide range of issues (INTERNATIONALER CONTROLLER VEREIN, 2006) This represents an image of the German management accountant as an advisor and provider of relevant information who visualises the economic consequences rather than being involved in the decision-making process This image is supported by German scholars, who stress either the ‘coordinative’ function, the ‘provision of information’ function or the function of controlling as a ‘special aspect of leadership’ (STOFFEL, 1995: 79; HORVÁTH, 2003: 148-9; WEBER 2004: 30-1) What all of these functions have in common, is that management accounting is no longer seen as pure score-keeping In his numerous comparative studies of the role of British and German management accountants, AHRENS (1997: 583) also supports this image, whereby in Germany, controlling has “no official input into concrete action” and carries “no operational responsibility” (AHRENS, 1997: 564) Referring to his findings, German management accountants consider it necessary for the controlling department to be distanced from operational action and merely analyse or investigate the economic consequences of the organisational effort Management accounting in Germany can, therefore, be seen as a representational effort, focussing on the coordination of business activities through plans Through this rather bureaucratic 28 perspective, it can be stated that German controllers “first and foremost see the organisation through the plan.” (AHRENS, 1997: 564) “We are responsible for the planning process… and generate the planning calendar, the schedule of activities We are responsible that the planning systems are available, but we are not responsible for the contents of plans […] so we carry not (operational) responsibility.” (ibid.) In conformity with the above image of a supporter and advisor of decision makers within the corporation, the management accountant should help, advise and ensure, that planning takes place (AHRENS, 1997: 562) SHERIDAN (1995: 291) discusses another aspect of management accountants in Germany, namely that management accountants are much more future-oriented, than for instance, their colleagues in Anglo-Saxon countries In Germany, companies are management by the “real [internal] figures” as opposed to publicly reported ones Therefore, SHERIDAN argues that it is possible for accountants to look much more at the future than, for instance, British management accountants 4.4.2 Role of management accountants in the U.K and the U.S Contrary to the above findings, the management accountants analysed by AHRENS regard themselves as more future-oriented than their colleagues in Germany (AHRENS, 1997: 583) Rather than being too distanced from operational matters and just acting as ‘scorekeepers’, British management accountants see their strengths in the involvement with proactive decision making and the formulation of strategic direction (AHRENS, 1997: 584) Furthermore, planning and coordinating, which have been identified as key instruments of German management accountants (HORVÁTH, 2003: 165), were seen in the U.K as something that “just has to be done sometimes” (AHRENS, 1997: 573) and hence did not share the same status as in Germany Although it is open to debate whether the latter aspects of planning and coordination are representative for U.K management accountants in general, this statement 29 nonetheless supports the perception of the role of management accountants in the Anglophone literature Several researchers agree with AHRENS and consider the modern Anglo-Saxon management accountant as being far more deeply involved in operational decision making than, for instance, in Germany (STOFFEL, 1995: 120; WILLSON ET AL 2003: 5-6) This is based on the notion that the Anglo-Saxon management accountant is, by definition, responsible for supporting and coordinating the decision-making processes in upper management (GRANLUND and LUKKA, 1998: 164) Due to the close organisational connection with finance and especially with the internal cost management department, this role of the management accountant as a pure consultant or provider of information, who is detached from operational matters, cannot be supported (STOFFEL, 1995: 122) Nevertheless, for all observed countries, it can be stated that the management accountant has developed from the above mentioned pure cost accountant to “someone with broad management and interpersonal skills who can interact with other departments” (WILLSON ET AL 2003: 9; WEBER, 2004: 20-1) Management accountants are no longer mere scorekeepers of past performance and have become value-adding members of management teams (KAPLAN and ATKINSON, 1998: 1) As opposed to previous observations, the management accountant can now be described as a modern manager with at least as much management experience as accounting knowledge (WILLSON ET AL 2003: 7) Conclusion and future prospects 5.1 Current developments One current development seems to erode the strict separation in German financial accounting practice (JONES and LUTHER, 2004: 14; WEBER, 2004: 176) The increasing implementation of international accounting standards like IFRS or US-GAAP in Germanbased multinationals is sparking a debate on the use of external reporting data for management accounting calculations (WEBER, 2004: 172) Companies like SIEMENS, BAYER 30 or DAIMLER-CHRYSLER have abandoned the isolated orientation on operating profits based on imputed internal data Instead, these companies focus rather on operating profits for internal calculations, which are derived from external figures This development in German accounting is commonly referred to as Biltrolling1 (CHRISTENSEN and WAGENHOFER, 1997: 255; ZIRKLER, 2002: 282; MACHARZINA, 2003: 392) Accordingly, a harmonisation of internal and external accounting can be observed in a growing number of German companies Consequently, a system with a nearly identical basis for internal and external values allows for comparisons with the general ledger system in Anglo-Saxon countries This approach of externally and internally reported figures becomes feasible due to the characteristics of the international accounting standards IFRS and US-GAAP They are “viewed as resulting in less biased numbers” (CHRISTENSEN and WAGENHOFER, 1997: 255) and are much more committed to delivering and procuring relevant information Furthermore, these standards are less tax-driven and put less emphasis on valuation principles such as prudence (CHRISTENSEN and WAGENHOFER, 1997: 255; KAHLE, 2003: 773) The implementation of IFRS or US-GAAP provides reasons for firms to combine internal and external accounting figures within the corporation (KAHLE, 2003: 774) A stronger orientation on the economic reality and measurement of managerial efficiency stresses the modification of international accounting standards for internal control needs Considering recent developments in management accounting practice, the abovementioned statement on the lack of relevance of financial accounting figures for internal management decisions seems to be unwarranted (CHRISTENSEN and WAGENHOFER, 1997: 255) In the past, little knowledge and experience has been transferred from Germany to the Anglo-Saxon countries Recent developments in both management accounting practice and in Biltrolling is an amalgam of the two words “Bilanz” and “Controlling” and refers to a combination of cost-oriented controlling and financial management accounting 31 the literature signal a reversion of this knowledge transfer from German management accounting to Anglo-Saxon countries As described above Anglophone corporations are increasingly becoming aware that management accountants are excessively involved in operational matters Therefore, a satisfactory level of support of management with respect to making objective and fair decisions is not always ensured (HORVÁTH, 2006: 3) As a solution, the concept of German management accounting is discussed regularly in the Anglophone management accounting literature (HORVÁTH, 2006: 3) In the past two years, the monthly release of STRATEGIC FINANCE, the journal of the U.S.-Institute of Management Accountants (IMA), has published a series of papers dealing with German management accounting (HORVÁTH, 2006: 3) Turning to practical developments, the German SAP enterprise resource planning software can be regarded as an important driver of convergence and knowledge transfer from Germany to the Anglo-Saxon countries This software is widely used in large companies worldwide and offers the conceptual framework of German flexible-margin costing A transfer of this knowledge is gaining increasing acceptance in management accounting practices in the Anglo-Saxon countries (FRIEDL ET AL., 2005: 56; HORVÁTH, 2006: 3) 5.2 Summary The present paper compared management accounting practices in Germany, the U.K and the U.S.A and analysed the directions in which they are moving Dealing with management accounting at an international level reveals a range of both differences and similarities The most significant difference between Anglo-Saxon and German management accounting is therefore the use of the respective management accounting system; either the general ledger concept or the two-circle system Due to these varying approaches, further differences arise, such as the lack of imputed costs in the Anglo-Saxon countries and different bases for calculating profits in Germany In comparison to the U.S.A or the U.K., German 32 management accounting exerts a stronger influence on management, because financial accounting figures are deemed as not useful for internal decision making (JONES and LUTHER, 2004: 13) Further important differences were revealed in the deeper involvement in operational matters and the broader fields of activity of management accountants in the U.S.A and the U.K While Anglo-Saxon management accounting is also directed at shareholders, German management accounting is addressed at internal target groups alone Besides these differences, some similarities and commonalities could also be observed Regardless of the varied target groups, management accountants in all three countries apply reasonably similar objectives and goals, which are to provide information, participate in the management process and ensure rational managerial decision making This is the main driver behind the convergence of Anglo-Saxon and German management accounting The instruments applied by management accountants are the catalyst for achieving this They are independent of most distinguishing factors such as cultural and educational background Therefore, the more instruments that are applied and the more bestpractice instruments that are mutually exchanged between the countries´ management accountants, the quicker and broader is the convergence in the respective field of activity As has already been stressed, this is currently happening German management accounting and Anglo-Saxon accounting are both recognising the advantages of each other’s techniques and practices In Germany, the concept of Biltrolling indicates a harmonisation of internal and external accounting similar to the Anglo-Saxon model Conversely, German cost management is commonly presented as best practice in recent U.S management accounting literature Furthermore, applications of the German based software SAP also lead to a knowledge transfer from Germany to the Anglophone countries In discussing the fundamental need for a discipline like comparative management accounting, it can be stated that, despite these convergence tendencies, differences in management accounting practices still exist and will presumably remain in the future Due to 33 increased competition and changing environments, management accounting characteristics may converge in most aspects and between most countries, but it will continue to diverge between other countries and industries (SHIELDS, 1998: 506; 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