Enterprise resource planning enabling segmental information reporting practices of UK‐FTSE 100

Abstract

The ERP impact on management accounting practices has been widely recognised as having a knowledge gap in relation to how it may facilitate Segmental Information Reporting following the International Financial Reporting Standard No. 8’s (IFRS‐8) management approach. This study contributes to filling this gap by investigating the joint effect of the ERP and IFRS‐8 Post‐Implementation Review (PIR) on dimensions: quality, quantity and the reporters’ identity of FTSE‐100 companies in the period 2013–2017. The study found that ERP is significantly and positively associated with the dimensions of segmental information reporting. The implications of this study extend research and the practices of segmental reporting on the importance of ERP in operationalising segmental reporting and in understanding variations.

The Relationship between the Implementation of ERP Systems and the Financial and Non-Financial Reporting of Organizations

“…According to IFRS 8, the manager is required to report on the internal structure and evaluate the performance and allocation of resources in order to provide a more accurate picture of the company's situation at a given time [6] (p. 7).…”

“…Positive differences in financial and non-financial reporting were identified between organizations that implemented or did not implement ERP systems. ERP systems focus on information quality, strategy, control, decision making, performance and reporting [6], in order to provide real-time operational or financial information, creating strong relationships and efficient communication between departments [7]. Thus, ERP systems offer a superior quality of accounting information, helping managers to make the most efficient decisions regarding the organization.…”