The accountant’s role in the quality management function of Maltese companies

Abstract

Purpose: Quality has become an essential element within the products and services offered by companies, irrespective of size and industry. Having an appropriate quality function allows companies to improve their production systems, build a better image for themselves, and increase their overall profits. However, quality is often difficult to define, and if not managed properly, it can be quite costly. Therefore, this study aimed to understand the different perceptions of quality and how management accounting can assist in identifying, measuring, and recording quality related information, thus allowing for better decision making. Design: A basic understanding of the topic was obtained through an extensive literature review. A series of interviews were then carried out with the quality manager and accountants of ISO registered companies in order to attain the objective of the study. Findings: The participants of the study all provided varying definitions of quality, highlighting that quality is a subjective matter. Still, most participants hinted that quality is about meeting the needs and requirements of the customer. The majority of the participants failed to measure the impact of ISO, both prior to and after implementation. However, all agreed that, achieving a quality certification has helped them improve their overall performance, whether from a financial or operational perspective. Most participants also failed to identify, measure, and record the costs of quality. All were unanimous that management accounting was essential in enhancing the quality function of the company; however, the extent to which the management accounting is involved in such function is still limited. Conclusion: In general, more companies should consider adopting ISO in order to build and maintain a strong quality culture within the company. Companies and management accountants alike should educate themselves more on the management accounting tools available towards generating and interpreting quality related information in order to improve decision making. Emphasis should be given to establishing a system aimed to continuously generating information on the costs of quality since, if not managed properly, they can be extremely high. Implications/Value: Having a proper quality management function can provide the company with ample benefits; however, if not managed properly, it becomes more of a burden than an opportunity. Therefore, management and accountants must educate themselves on the matter and strive towards continuous improvements.