THE ROLE OF INFORMATION TECHNOLOGY



THE ROLE OF INFORMATION TECHNOLOGY IN THE TRANSFORMATION PROCESS OF ACCOUNTING IN THE CROATIAN HOSPITALITY INDUSTRY

MILENA PERŠIĆ, Ph.D., Full Professor

Faculty of Tourism and Hospitality Management, University of Rijeka

51410 OPATIJA, IKA, Primorska 42, p.p. 97;

e-mail: Milena.Persic@hika.hr

MARIJANA STOJANOVIĆ, M.sc.

Croatian Pension Investment Company

10 000 Zagreb, Mihanovićeva 3;

e-mail: marijana.stojanovic@hmid.tel.hr

Abstract

The task of the accounting information system (AIS) of the hotel company is to create and present relevant financial information, understandable and comparable by criteria and standards of the global tourist and financial markets. Information technology this process facilitates accelerates and makes it cheaper.

The set task must be performed taking into consideration accounting theory, methods, practice, regulation, and the most important, Uniform System of Accounts for the Lodging Industry (USALI), a system for the preparation of accounting reports and financial statements in standardized formats, respecting all specific industry features.

For business transparency, the most important accounting information are those based on interim and segment reporting standards. To prepare relevant information about enterprise’s products and services, its geographic areas, and its major customers the special software is needed which has to be compatible with the requirements of IAS 14 and SFAS 131. Furthermore, USALI methodology has to be adjusted to the real organizational structure and real information requirements of particular hotel company.

The preparation of financial statements is easy and quick if it is connected with the system of internal reporting, because financial statements emerge from the summarizing and grouping of the information created for internal accounting reports.

The second step which is possible by using modern information technology is presentation of financial reports on the corporate web sites. For this purpose the Extended Business Reporting Language (XBRL) is created, standards based method for preparing, publishing in a variety of formats, exchanging and analyzing financial statements and the information they contain.

The paper explores the influence of technological advancements on the functions of accounting and financial reporting. The emphasis is on the need of accounting adjustment to the information requirements for specified purposes. Any other approach to the preparation of managerial information does not assure the realization of the goals and the tasks of the hotel companies.

Keywords: Uniform System of Accounts for the Lodging Industry; International Accounting Standards, Generally Accepted Accounting Principles; Segment reporting; Information technology;

Introduction

The Information technology has grown and will continue to grow in importance very fast. It has significant influence on almost every human and particularly business activity. Accounting is not an exemption. On the contrary, accounting and IT are today an integrated whole, not a two separate disciplines. The growth of the Internet as a medium for delivering business reporting information has altered the way information flows from companies to investors and creditors. That structure will continue to change as companies bring new technologies to the process and as information users find new ways to gather and analyze information.

Introduction of computer technology in the AIS demands new approach to all relevant accounting area: from organization of documentation and accounting techniques, throughout transaction processing and registration, planning and control of all accounting items, to the reporting system, but also to the area of internal and external audit. Besides described changes for accountants, IT has significantly influenced other parties dependent on accounting information. For example small and medium companies which have its accounting departments outsourced in the developed countries such is Great Britain already have their accounting on the Internet. Such information systems makes it possible to accountants online bookkeeping system, and company users can "call their accountant" and use accounting information for 24 hours a day wherever they are only by "pushing a button". In such systems users always have real time information.

The use of general accounting packages, spreadsheets, financial modeling, database, decision support and expert system software have offered support to accountants in their analytical and decision-oriented tasks and allowed them to move from the accumulation, analysis and preparation of financial information towards interpretation, evaluation, control and involvement in decision making. As a result, information quality has been improved in terms of comprehensiveness, accuracy, timeliness, frequency, and relevance. (Xiao, Z., Sangster, A., Dodgson, J.H., 1997 p. 14).

Numerous possibilities offered by IT also require from accountants new theoretical knowledge and practical skills. For example, the IT curriculum in accounting should include complementary issues and aspects of Computer Technology and applications such as General Systems Theory, Accounting Information Systems, Business systems and design, Internet tools etc. Researches of presence of information technology in accounting curriculums have shown that in developed countries already exist comprehensive program of education in IT systems and AIS to future accountants. In developing countries the situation is significantly different. Because of that, international accounting bodies have stressed the need for a shift in accountants' education by increasing the knowledge of IT and called the attention for the creation of a global curriculum to serve as benchmark for developing countries (IFAC's IEG No. 11, 1999).

Information Technology in Accounting Information System (AIS)

The IFAC defines information technology (IT) as "hardware and software products, information systems operations and management processes, and the skills required to apply those products and processes to the task of information production and information systems development, management, and control" (IEG No.11, 1999). Accountants use the advancement in information technology to do their job better, quicker, and the most important cheaper. The manual tasks of bookkeeping and accounting entries, preparation of source documents, checking for correctness, making journal entries, posting of general ledger and the preparation of statements and reports take on new meaning, especially in terms of time cost (Korošec, B. 2003. p. 146/7).

Information system is integration of material resources, programs, professionals, methods and organizational procedures intended to collect, process, store and deliver of data and information to users. It has four complements: material basis (hardware), intangible elements (software), specialized personnel (lifeware) and organizational routine (orgware) (Ekonomski leksikon, p. 319). Analogous, AIS is integration of people and equipment, designed to transform financial and other data into information. AIS perform this transformation whether they are essentially manual systems or thoroughly computerized. Computer based accounting reporting system can generate accounting information for different types of reports to a wide variety of decision makers (figure 1).

Figure 1: AIS reports and users of accounting information

[pic]

Source: Sunder, S. (1997), Theory of Accounting and Control, S-WCP, Cincinnati, Ohio,p.15.

Reports provide an important interface between an information system and the users of the system. According to their purpose, and at the most general level, they can be categorized and classified in various types (figure 2).

Figure 2: Various types of reports in business organization

|No. |Classification scheme |Examples |

| | |Planning |

|1. |Purpose |Control |

| | |Operational |

| | |Income taxes |

| | |Stockholder |

| | |Government regulation…. |

|2. |Time horizon |Long range |

| | |Short range |

| | |Historical |

|3. |Scope |Firm-wide |

| | |Division-wide |

| | |Department-wide |

|4. |Occurrence |Upon request |

| | |Periodic |

| | |Event - triggered |

| | |One time |

|5. |Organizational function |Production |

| | |Sales |

| | |Finance |

| | |Inventory |

|6. |Report format |Monitor |

| | |Color graphics |

| | |Computer printout |

| | |Narrated |

|7. |Conciseness |Brief |

| | |Detailed |

| | |Variance report |

Source: Bodnar, G.H.(1995), Accounting Information System, 6th Edition, Prentice Hall, New Jersey, p. 404

AIS is involved in process of preparing wide rang of those reports, presenting financial data and information about business results. Specially developed computer software can support and assist in process of preparing information for different managers needs, in process of decisions making. Those database software have to be able to take over the desired data from several different applications where are stored and process them for special needs. The goal is to provide a common and controlled method, for transforming data in information.

Financial reporting on the Internet

Many enterprises are using the Internet to communicate with customers, stakeholders, creditors and others in a variety of ways (for example on-line buying or selling of goods and services and other communication with customers) but for this paper the most important is the provision of financial information for investors, creditors, analysts and other interested users. The proportion of companies using the Web for financial reporting is increasing in all countries with active capital markets and advanced communications networks.

Although financial reporting on the Web clearly has numerous advantages, it also creates a number of challenges for companies, regulators and standard-setting organizations. So IFAC, IASC, SEC and major national regulatory organizations continuously deals with this issue. The reason for that are wide variations both in terms of the amount of content (e.g. summary financial statements vs. detailed financial statements) and style of presentation (e.g. purely transcription of financial report vs. inclusion of multimedia). The variations in reporting between companies are so wide that users may thing that there are no rules for financial reporting on the Web, but they exist. In the United States, the Securities and Exchange Commission (SEC), in Securities Act Release No. 33-7233, indicates that the Internet is just another media and the rules that apply to paper-based financial reporting equally apply to the Internet. By contrast, the AICPA’s opinion is that electronic sites are a means of distributing information and are not ‘documents.

A survey of large listed corporations in 22 countries on total of 660 companies was made in 1999 (Lymer, A, R Debreceny, G Gray, and A Rahman, 1999) to assess the extent of annual reporting in its various forms on the Web. The results (summarised in figure 3) have shown that 86% of the corporations surveyed had a Web site. The penetration rate varied from 100% for Germany, Sweden, Canada and the USA, to 53% in Chile. Even in countries with relatively low general Internet penetration rates amongst the general population, such as France and South Africa, a relatively high proportion of corporations had a Web site. Some 62% (410) of the corporations made some form of financial disclosure on their Web sites. Of the 410 companies that made some type of financial disclosure on the Web, 80% (327) used HTML in some form with 57% (234) disclosing substantial elements of their complete financial statements on the Web.

Figure 3: Stage of development of Financial Reporting by Country

[pic]

Source: Lymer, A, R Debreceny, G Gray, and A Rahman (1999), Business Reporting on the Internet. London: International Accounting Standards Committee International Accounting Standards Committee. Available at .uk

In Croatia, companies mostly have Web pages, but the amount of disclosed financial information is not significant. We have researched the Web pages of hospitality industry companies listed on Croatian stock exchanges, and have found that neither one of them offers financial information. The probable reason for such situation is that they are still mostly in state ownership or have just few big owners.

Investors depend on financial information for their investment decision making. For example, they routinely use financial disclosures in evaluating a company's growth prospects, its riskiness and the long-term success of the company's business model .These analyses also provide the inputs investors need to price individual securities and to make portfolio decisions. Taken altogether, the quality of investors' pricing and capital allocation decisions affects the relative efficiency and effectiveness of financial markets. (McEnally, R.T., Doran Walters, p., 2003).

Big international companies (for example General Electric) already offer the possibility of electronic delivery of Annual Reports and Proxy Statements. Also, on their web pages they present Guides for understanding Annual Reports with the basics of how to read an annual report even if a reader have no prior experience in finance or accounting. Furthermore, it is evident that the relationship between IT use and external reporting change is stronger in listed companies than in unlisted ones. This is because listed companies have to comply with certain stock exchange regulations, which means that the minimum reporting requirements are more stringent than for non-listed companies. For example, in Croatia quarterly reports from companies listed the "JDD quotation" (quotation of the so called public companies – companies which have 100 and more shareholders and shareholders capital 30 mln HRK and more) of Zagreb and Varaždin stock exchanges must be available on the stock exchanges' web sites.

Web reporting language (XBRL) and management's responsibilities

We can think about Web as a giant data warehouse, but downloading and analyzing financial data is not always easy task. The problem is that there is no underlying common language that will allow computers to uniquely identify financial-reporting elements on the Web page. For example, if someone wish to obtain 20 financial statements' values and two notes disclosure items over a ten-year period for ten companies in ten countries, he must go to the Web site of each company, find the annual report, download in PDF or read on screen if in HTML and then re-key the information into a spreadsheet. Such work is long lasting and rather boring.

Because of such problems, the professionals, at the initiative of the AICPA, begins to develop financial reporting langue of the Web, called eXtensible Business Reporting Language. The XBRL is designed to allow users to readily find financial reporting information on the Web and to extract needed values, for example sales, costs, margins, contents of the notes to financial statements etc. XBRL is not a new form of accounting, but it makes the financial information more transparent and readily available. In other words, XBRL is a standards-based method for preparing, publishing in a variety of formats, exchanging and analyzing financial statements and the information they contain. It facilitates reporting and makes it easier for companies to expose data that is valued by investors and regulators.

XBRL provides benefits to all members of the financial information supply chain, public and private companies, the accounting profession, regulators, analysts, the investment community, capital markets and lenders, as well as key third parties such as software developers, system integrators, consultants, and data aggregators. Current users of XBRL include Morgan Stanley, EDGAR online, Reuters, and Microsoft. Other early adopters include the UK Inland Revenue and the US Federal Deposit Insurance Corporation (XBRL International, 2004).

Management is responsible for the realization of company's objectives, according to defined business strategy. In the process of realization of set goals it is very important for managers to consider all aspects of business risks, among which is also IT risk. "Management assesses IT risks with respect to information reliability. Information reliability depends on IT system reliability, and IT system reliability depends on IT controls". (IFAC, March 2002) The implementation of effective IT controls will help ensure the creation of reliable information. According to the IASB's Framework for presentation of financial statements, information is reliable if faithfully represents the transactions and other events; if is presented according to the substance and economic reality, not only in legal form; if it is neutral, prudent and complete. The use of XBRL will be helpful in creating information with such characteristics.

Information system is reliable if it is capable of operating without material error, fault of failure. The hardware, software, data and information have to be constantly available. Also, the IT system must be capable to authorize particular person to have access to certain data, information and systems, or to have permission to modify of delete certain data or information. Internet users have come to expect that information on a Web site is the most current information available. But the timeliness is still the problem with business reporting on the Internet. Business reporting continues to provide information in packets, each of which is current as of the date of its release or filing. Some have suggested that the Internet will drive business reporting from its monthly, quarterly, and annual cycles to a system of real-time reporting.

Impact of USALI standards on reporting system in hospitality industry

Uniform System of Accounts for the Lodging Industry (in short USALI) is system for the preparation of accounting reports and financial statements in standardized formats, respecting all specific industry features. It was firstly issued in 1926 by the Hotel Association of New York City, and “represented the first successful organized effort to establish a uniform responsibility accounting system for the lodging industry and one of the first such efforts in any industry”(Uniform…, 1996. iii). Today, most hospitality business use computers to apply USALI standards in reporting to internal and external user, and to record and analyze the effectiveness of internal operation.

USALI contains not only the basic financial statements, but also 32 supplementary departmental operating statements and appendices covering budgeting and forecasting, breakeven analysis, and uniform chart of accounts. This system expects the uniformity in acquiring, collecting, sorting, evidencing, balancing, preparing and presenting of the accounting and statistic information in strictly formalized statements that enable the comparison of a company’s own results with competition, and average results of the hospitality industry on the national and international level.

In order to accomplish described task, it is prerequisite to establish an internal chart of accounts supported by IT (figure 4), to adopt relevant accounting policies and to enable separation and allocation of fixed and variable costs. Management, accountant and IT experts must lay together the foundation of accounting concepts to understand the necessary data and information needed as input to AIS, with goal to prepare standardised reports with relevant information, as the output from selected hardware and software.

[pic]

Source: Prepared by “Uniform System of Accounts for the Lodging Industry” (USALI), 9th revised edition, “American Hotel & Motel Association” and “Hotel Association of New York”, East Lansing, Michigan, 1996, p. 189 -198.

Presented sample chart of accounts is designed to be broad enough to have a major number for each account that is regularly used in USALI standard reporting system, and sufficiently detailed to provide sub-accounts for all departments or areas of significance. There is twelve-digit numbering system, consisting of four clusters of three digits each. It is also sufficiently flexible to allow companies, individual owners, or managers to add or delete accounts to meet the special needs of their properties. This approach is based on integrated IT system, which enables the multiple use of information (for example food item might be used for receiving, storing, issuing recipes, production, inventory, sales control and accounting purposes).

Segment reporting is the fundamental task of management accounting and is based on the International accounting standard 14 (IAS 14), or on the Generally Accepted Accounting Principles - GAAP (SFAS 131). Those are the starting points that inspire the philosophy of the USALI, which connects IAS 14 or SFAS 131 with special hospitality management needs. Hotel’s operated departments, like rooms, food, beverage and other are the most important reporting segments, also known responsibility centres. Departmental statements (internal statements by segments, cost centres and activities) are later adequately summarised and presented within the frame of the Summary statement of income. This provides a basis to the preparation of other yearly Statements: Balance Sheet, Statement of Owner’s Equity, Statement of Cash Flows and Notes to the Financial Statements, which have to be coordinated with national legislation. The fundamental principle of responsibility accounting as a subsystem of managerial accounting is that costs are assigned to various hierarchical levels of management which are in charge of their control to make managers responsible for the difference between budgeted and realised results (Garrison, R.H., Noreen, 1997, p. 389).

The distribution on controllable and uncontrollable costs is viewed from the starting point of the hierarchical level for which the statement has been prepared, taking into consideration the principle of economy and disregarding the insignificant items. Each of the statements in standardised USALI reporting system is conceived to provide the responsible manager with the information about the relation of the actual costs to the revenues inside and among particular segments. A responsible manager has an insight into the costs/revenues that are within his competence. Only the management of the highest hierarchy level of responsibility is held responsible for total costs/revenues.

Internal reporting system in Croatian hospitality industry

To determine the level of introduction of the USALI in the practice of the Croatian hotel industry and to estimate the accomplished development stage of managerial accounting and internal reporting system in the Croatian hotel industry, an empirical research was conducted on the representative sample of 42% of hotels (figure 5).

Figure 5 : The Structure and Features of the Investigated Sample

| |Description |% Companies |% Hotels |

|I. Sample Regional Structure |

|1 |Istra |20,0 |33,5 |

|2 |Kvarner |37,5 |39,5 |

|3 |Dalmacija |30,0 |24,3 |

|4 |Zagreb and Continental Croatia |12,5 |2,7 |

|II. Sample Structure by Organisational Structures |

|5 |Stock Companies |85,0 |95,7 |

|6 |Limited Companies |10,0 |3,2 |

|7 |Institutions |5,0 |1,1 |

|III. Sample Structure by Size |

|8 |Large |37,5 |69,7 |

|9 |Medium |50,0 |24,9 |

|10 |Small |7,5 |1,6 |

|11 |No Response |5,0 |3,8 |

|IV. Sample Structure by Ownership |

|12 |Completely Privatised |22,5 |15,7 |

|13 |Mostly Privatised |40,0 |44,3 |

|14 |Mostly State Ownership |32,5 |38,9 |

|15 |Completely State Ownership |5,0 |1,1 |

|V. Sample Structure by the Form of Organisation |

|16 |Centralised, Single Unit |40,0 |26,0 |

|17 |Holding |7,5 |9,2 |

|18 |Responsibility Centres |22,5 |41,6 |

|19 |Economic Units |25,0 |18,9 |

|20 |Other |5,0 |4,3 |

Source: The questionnaire answered by Hotels Njivice d.d., Imperial d.d., Rab, Hotels Makarska d.d. Makarska, Plava Laguna d.d. Poreč, Sunčani Hvar d.d. Hvar, Golden Tulip Holiday d.d. Zagreb, Hotel Bonavia d.d. Rijeka, Hotels Argentina d.d. Dubrovnik, Hotels Maestral d.d. Dubrovnik, Cresanka d.d. Cres, The Jadran Hotels d.d. Rijeka, Mozart d.d. Opatija, Hotel Excelsior d.d. Dubrovnik, Jadranka d.d. Mali Lošinj, Auto Centar Zubak d.o.o.- the Cristal Hotel branch Umag, UGO Hotels d.o.o. – Hotel Millenium Opatija, Anita d.d. Vrsar, the Daruvar Spa, Daruvar, Jadran d.d. Crikvenica, Arenaturist d.d. Pula, Hotel Lapad d.d. Dubrovnik, Hotels Novi d.d. Novi Vinodolski, Hotels Punat d.d. Punat, The Varaždin Spa Medical Rehabilitation Clinic, Kinning d.o.o. Krk, Slavonka d.d. Našice, The Bizovac Spa d.d. Bizovac, Jadran –turist Rovinj d.d. Rovinj, Rabac d.d. Rabac, Turisthotel d.d. Zadar, Riviera holding d.d. Poreč, Borik d.d. Zadar, Rovinjturist d.d. Rovinj, Hotels Brela d.d. Brela, Hotels Baška d.d. Baška, HTP Korčula d.d. Korčula, Hotel Lero d.d. Dubrovnik, The Liburnia Riviera Hotels d.d. Opatija, Zlatni Rat d.d. Bol.

We have indicated the features of the research sample that influence the quality and usability of accounting information. The greatest part of the selected sample are hotels organised as responsibility centres or economy units within large enterprises that have the status of joint-stock companies, mostly privatised, still retaining a significant share of state ownership. It is interesting to point out that the sample includes enterprises that have just started developing the system of internal reporting (8%), with shorter (to 5 years 32%) or longer experience in this area (to 10 years 20%), or those that have followed this practice for more than 10 years (30%).

Reporting to management about the internal operating results is usually assigned to managerial, or management accounting (55%), in smaller proportion to the financial accounting (31%), in some cases to the department for planning and analysis, controlling or some other segment of management information system. The extent and quality of these operations is illustrated by the fact that management accounting and reporting department has 2 to 4 employees (in 49% cases). In most cases the traditional management accounting methods are still used i.e. traditional costing methods, and accounting is still mostly oriented to external users. The realised figures from previous periods are mostly used as the comparative value in the control of actual costs.

The standardised system for reporting on internal operations results is significantly represented in Croatian hotel industry. Within the explored sample, 40,0 % of hotels use the USALI completely, 28,6 % partly, 4,4 % are introducing it or using it in traces, 20,5 % intend to introduce it, and the remaining 6,5 % consider this system unnecessary.

The organisation of responsibility accounting and the system of management reporting in hotel enterprises should be based on the branch particularities and the accomplished development level of managerial accounting, respecting the USALI standards. We therefore estimate the frequency of using of the fundamental statements proposed by the USALI (figure 6), based on the original demands to compile particular statements and the users' need for information. It is easily detectable that the first place belongs to statements for the rooms department, follow the food department and for the beverages department. According to the usefulness of information follow statements about rentals and other incomes, about human resources and salaries and wages. According to the interest of the examinees it is additionally useful to compile the statements about utility costs, depreciation and amortisation, marketing, rent, property tax and insurance, interest costs, and telecommunication department.

Figure 6: The Frequency of Statements Proposed by the USALI

|No . |Statement |Positive |No. |Statement: |Positive |

| | |responses | | |responses |

|1. |Rooms |30 |17. |Information System |5 |

|2. |Food |30 |18. |Security |3 |

|3. |Beverages |29 |19. |Marketing |15 |

|4. |Telecommunications |13 |19a. |Franchise Fees |0 |

|5. |Garage and Parking |5 |20. |Transportation |6 |

|6. |Golf – Course |0 |21. |Property Operation and Maintenance | |

|7. |Golf Pro Shop |0 | |Utility Costs |11 |

|8. |Guest Laundry |6 |22. |Management Fee |18 |

|9. |Health Centre |4 |23. |Rent, Property Tax and Insurance |5 |

|10. |Swimming Pool |7 |24. |Interest Expense | |

|11. |Tennis |6 | |Depreciation and Amortisation |14 |

|12. |Tennis Pro Shop |1 |25. |Income Taxes |13 |

|13. |Other Operated Departments | |26. |House Laundry |16 |

| |Rentals and Other Income |8 |27. |Salaries and Wages |10 |

|14. |Administrative and General | |28. |Payroll taxes and Employee Benefits |7 |

| |Human Resources |20 |29. |Gaming Operations |20 |

|15. | | |30. | | |

| | |15 | | |10 |

|16. | |20 |31. | |1 |

Source: The questionnaire answered by…………….

IT system is especially important in compiling daily reports. It can be noticed that the examinees believe that is necessary to establish daily reports about the structure of realised revenues according to the kinds and criteria of payment (figure 7). But in the practice manager also needs the structure of direct and some variable cost, which can be traced on daily base (for example the direct material costs in food department). The examinees at the same time think that monthly statements are sufficient when talking about all kinds of costs and realised margin results. Manager in Croatian hospitality industry are mostly oriented to the monthly internal reports, which are the base for preparing Summary Statement of Income. To prepare information about realised / planed result and variances, we need interactive programs, which prompt the user sequentially step by step. It is normally easier to use such programs than the integrated software, because it helps to ensure that no information that should be entered by the user is omitted.

Figure 7: The Frequency of Managerial Information Demands

| |Information Importance by the Users Assessment |

| | |

|Segment Reporting | |

| |Rooms Department |Food and Beverages Department|Other Tourist Services |

| | | |Departments |

|Daily |Weekly |Monthly |Daily |Weekly |Monthly |Daily |Weekly |Monthly | |Units Revenue Structure |28 |9 |16 |28 |10 |14 |24 |9 |17 | |Criteria of Payment |18 |6 |15 |21 |11 |12 |17 |9 |15 | |Realised/Planned Revenues |4 |3 |29 |4 |2 |28 |4 |2 |30 | |Unit Cost Structure |5 |4 |30 |4 |6 |27 |2 |9 |22 | |Direct Material Costs |- |- |- |10 |9 |21 |5 |9 |24 | |Indirect Material Costs |- |- |- |- |4 |28 |1 |5 |26 | |Realised/Planned Costs |- |3 |30 |1 |3 |28 |1 |2 |30 | |% Realised Margin |- |- |- |5 |9 |23 |3 |5 |25 | |% of Margin Contribution |- |3 |20 |3 |3 |24 |2 |1 |23 | |Gross Operating Profit |2 |3 |29 |1 |6 |29 |2 |4 |27 | |Realised /Planned Result |1 |3 |25 |3 |3 |29 |2 |1 |29 | |Realised /Planned Price |- |- |- |7 |6 |21 |3 |2 |23 | |Variance of Standards |- |- |- |9 |10 |16 |5 |8 |16 | |

Source: The questionnaire answered by…………….

Conclusion

The rapid development of modern information technologies has significant influence on accounting and financial reporting. Accounting process is facilitated, fastened and made cheaper. Information are quicker on disposal to their users. The Internet has become the irreplaceable means for communication with owners and investors. These changes also require new knowledge and skills from accountants. Because of that the accounting curriculum at universities has to be changed. It is already done in the developed countries, but still remains to be done in the developing countries. Croatia is not an example.

The described changes are also present in Croatia, but there is also the room for significant improvements. The research results of the hospitality industry accounting practice prove that the accomplishments of the world practice are already present in the Croatian hotel industry, but they also offer an array of useful suggestions which would contribute significantly to the transparency and better quality of accounting reports, starting from the necessity of additional education for the management of all hierarchical decision making levels about management accounting and the USALI, to the higher introduction of the information technology in this area. More prompt and more universal introduction of the entire USALI, would lead to the standardisation of the segment reporting in the Croatian hotel industry and tourism.

This would ensure the transition from the current low development level of the managerial accounting to the higher levels, and force the development of responsibility accounting, whose aim it is to provide timely and transparent information on particular costs, revenues and results that are able to fulfil the information needs of internal and external users. The further researches and application of useful knowledge in this area is suggested, aimed at the advancement of practical work and greater competitiveness of Croatian hotel industry and tourism.

References

AICPA (1999), Information Technology Competencies in the Accounting Profession: AICPA Implementation Strategies for IFAC Internationa Education Guideline 11.

Bodnar, G.H. (1995), Accounting Information System, 6th Edition, Prentice Hall, New Jersey.

FASB. 2000. Business Reporting Research Project: Electronic Distribution of Business Information. Norwalk, CT: Financial Accounting Standards Board. Available at

Garrison, R.,H., Noreen,E.,W., (1997), Managerial Accounting, VIII ed., Irwin.

Gray, G.L., Debrenceny, R. (2001) "Financial Reporting on the Internet – Instant, Economical, Global Communication", IFAC Articles & Speeches Library. Available at ifac. org

Ekonomski leksikon (ed. Baletić, Z.) (1995),Leksikografiski zavod "Miroslav Krleža" i Masmedia, Zagreb.

IFAC (March 2002), E-business and the Accountant. Available at

International Accounting Standard 2000., (translation) HZRFD, Zagreb,2000

International Education Guideline 11 (IEG) by IFAC's Education Committee, 1995 (revised in 1998).

Kopinski, A. (2003), The role of computer simulation in management accounting, proceedings “General Accounting Theory - in status nascendi”, Akademia Ekonomczna W Krakowie, Krakov, pp. 495 -506.

Korošec, B.(2003), Računovodstvo danes, zbornik referatov, 35. simpozij “O sodobnih metodah v računovodstvu, financah in reviziji”, Portorož, pp. 143-160.

Kurek, H., Zilinska, H. (2003), Cybernetic and contract approach to the accounting functions, proceedings “General Accounting Theory - in status nascendi”, Akademia Ekonomczna W Krakowie, Krakov, pp.33 -62.

Lymer, A, R Debreceny, G Gray, and A Rahman (1999), Business Reporting on the Internet. London: International Accounting Standards Committee International Accounting Standards Committee. Available at .uk

McEnally, R.T., Doran Walters, P., (2003), "The Critical Nature of Neutral financial Reporting", The FASB Report, August 29, 2003.

Nowak,W. (2003), On the general Theory of Accunting, proceedings “General Accounting Theory - in status nascendi”, Akademia Ekonomczna W Krakowie, Krakov, pp. 63 -78.

Schmidgall,R.S. (1997), Hospitality Industry Managerial Accounting, Educational Institute, American Hotel&Motel Association, Lansing.

Selig,E.R., Wolfe,F. (2002), The Uniform System of Accounts for the Lodging Industry - 10th edition, Bottomline, Vol.17, Number8, I/2002, pp. 8 -30.

Sunder, S. (1997), Theory of Accounting and Control, S-WCP, Cincinnati, Ohio.

The questionnaire that was answered by the following hotel enterprises during the research: Hotels Njivice d.d., Njivice, Imperial d.d. – concern “Imperial” Rab, Hotels Makarska d.d. Makarska, Plava Laguna d.d. Poreč, Sunčani Hvar d.d. Hvar, Golden Tulip Holiday d.d. Zagreb, Hotel Bonavia d.d. Rijeka, Hotels Argentina d.d. Dubrovnik, Hotels Maestral d.d. Dubrovnik, Cresanka d.d. Cres, The Jadran Hotels d.d. Rijeka, Mozart d.d. Opatija, Hotel Excelsior d.d. Dubrovnik, Jadranka d.d. Mali Lošinj, Auto Centar Zubak d.o.o.- the Cristal Hotel branch Umag, UGO Hotels d.o.o. – Hotel Millenium Opatija, Anita d.d. Vrsar, the Daruvar Spa, Daruvar, Jadran d.d. Crikvenica, Arenaturist d.d. Pula, Hotel Lapad d.d. Dubrovnik, Hotels Novi d.d. Novi Vinodolski, Hotels Punat d.d. Punat, The Varaždin Spa Medical Rehabilitation Clinic, Kinning d.o.o. Krk, Slavonka d.d. Našice, The Bizovac Spa d.d. Bizovac, Jadran –turist Rovinj d.d. Rovinj, Rabac d.d. Rabac, Turisthotel d.d. Zadar, Riviera holding d.d. Poreč, Borik d.d. Zadar, Rovinjturist d.d. Rovinj, Hotels Brela d.d. Brela, Hotels Baška d.d. Baška, HTP Korčula d.d. Korčula, Hotel Lero d.d. Dubrovnik, The Liburnia Riviera Hotels d.d. Opatija, Zlatni Rat d.d. Bol.

Uniform System of Accounts for the Lodging Industry, (1996), 9th rev. edition, The Hotel Association of New York and American Hotel & Motel Association, East Lansing, Michigan.

Zakon o tržištu vrijednosnih papira, NN 84/02.

XBRL International, official data 2003, available at .

Xiao, Z., Sangster, A., Dodgson, J.H. (1997), "The relationship between information technology and corporate financial reporting", Information technology & People, Vol. 10 (1997), No.1, pp. 11-30.

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download