Abstract
Previous studies show that the level of management accounting practices has a positive impact on the performance of small and medium-sized enterprises (SMEs). However, why do not all SME managers implement management accounting practices at a high level? This study focuses on the lack of aspiration that managers are satisfied with or ignore current financial performance because it is above the level of aspiration. We hypothesize that SME managers with such the lack of aspiration do not take any additional improvements including more use of management accounting practices. As a result of our empirical analysis by using the data of 483 SMEs obtained from local accounting firms, we find evidence that manager’s lack of aspiration is negatively related to the level of management accounting practices. The evidence contributes to previous management accounting research by providing the first evidence of a new barrier effect that does not increase the level of management accounting practices.
