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56ECONOMIC SCIENCES
ACCOUNTING ENGINEERING AS THE BASE FOR ENTERPRISE DATA-DRIVEN DECISIONMAKING SYSTEM IMPLEMENTATION
Khalleefah Ahmed Mohammed Saed
Ph.D. student Simon Kuznets Kharkiv National University of Economics, Ukraine
ABSTRACT
The necessity of using an accounting engineering concept for satisfying the information requests from enterprise management has been proved based on changes that the fourth industrial revolution has brought to the modern world. The data-driven approach for developing the enterprise strategic decision-making system, as one of the fourth industrial revolution representatives, was used as a foundation for management accounting organizing. The article made an emphasis on expanding the analytical and predictive capabilities of strategic management accounting. Given this, the sequence for strategic management accounting organizing has been substantiated. The methodical approach based on accounting engineering technic for creating a list of accounting nomenclatures, which is expended by fixing nonfinancial information, has been substantiated.
Keywords: accounting engineering, information system, data-driven approach, decision-making system, strategic management accounting.
Introduction. Many pieces of research in the field of accounting are dedicated to the crucial problem of describing and understanding the future of the accounting profession within the digitalization context. It becomes completely obvious to everyone that the future of accounting is in involving the new technics, which could help not only with gathering more considerable amounts of information but also with making a prediction based on using the special analytical tools for processing the data. The modern accountant must have the ability to analytical thinking, build a relationship, establish effective communication, and understand the role of accounting information in the implementation of the enterprise strategy. It is only possible if the accounting department and accounting process get the right place within the enterprise architecture. Unfortunately, getting such a place is still a big problem for individual enterprises. Despite the tremendous amount of research about increasing the managers' confidence in accounting information, a lot of them do not reach practical implementation and remain on paper. It is becoming increasingly difficult to ignore the digitalization of every aspect of enterprise life. That is why accounting development must establish links between the main management decision and a massive amount of data gathering within the accounting system. This is possible only if accounting stop avoiding the digitalization and implement the methods of predictive analytics for using it as a part of the accounting process. Here should be considered that changes in the accounting profession and the requirements for accounting information have led to the many new tools involvement in the accounting process.
When digitalization and big data have emerged, it opens new fields of accounting development, which can only be achieved by inventing a new approach of different data gathering. These dates must describe not only the financial aspects of the enterprise life but give the qualitative assessment of its development parameters. Such data-driven approach creates new opportunities for the accounting development. Therefore, the article is oriented on searching the way to simultaneously
solving the two described problems. These problems are getting the right place for accounting within the enterprise architecture and improving the accounting process based on the enterprise's digital transformation.
Literature review and problem statement. Current economic conditions and facing the challenges of the fourth industrial revolution require economic entities improving their strategic management and decision-making system. The main problem here is colossal increasing the amount of data, which enterprise management has to process to make the right decision. Such a situation has resulted in the emergence of a data-driven approach to enterprise management. In this case, data-driven means, that the enterprise management makes a decision based not on the intuition or personal experience but the data aggregation. It is clear, that a significant increase in economic data causes that the data-driven approach has spread on the research in the field of accounting. The B. Ballou, D.L. Heitger, and D. Stoel [1] research could be considered as an excellent example of the mentioned spreading of a data-driven approach to accounting. Unfortunately, these authors emphasize only the necessity of changing the curriculum of accounting education. However, we have to agree with the statement [1] about changing the main competitive advantages of accounting from providing the relevant information to performing data analytics. The same problem could be noticed according to М.T. Hora, J. Bouwma-Gearhart, and H.J. Park [2] research, where also data-driven approach was considered as a necessary improvement in accounting education.
Another exciting research, which connected the colossal amount of open data with public accountability, is R.P. Lourengo, S. Piotrowski, and A. Ingrams [3] work. Although this research explores the particularities of open data-driven public accountability, it not covered the enterprise' accounting process. Mentioned research is more about using some data for creating a transparent environment. The main idea here is to get the possibility of gathering all the necessary data within the enterprise architecture. This is exactly what A. Top-chyan's [4] research is aimed at. The mentioned article
[4] reveals the idea of data gathering from the point of view of different stakeholders. Taking into account the interests of such stakeholders as the IT department, Data Scientists, and Business Department clarified the requirements of data-driven architecture within the enterprise Data Vault Architecture. What the A. Top-chyan's [4] lives behind is the quality and reliability of the information collected in Data Vault. If the enterprises' ability to obtain the required information not considering and the relations with the accounting system is not established, we could not claim that enterprise uses a data-driven approach in its decision-making system. Therefore, providing a data-driven approach in the enterprise decision-making system requires some improvement it accounting organization, which existed researches and accounting practice not provided.
The aim and objectives of the study. The purpose of the article is to develop the connection between the enterprise accounting system and requirements from business users of accounting information based on using the data-driven approach to making the decision. The author's hypothesis is to use an engineering approach for developing the accounting information' gathering system.
Methods. The methodological base of the research is an enterprise architecture approach, which is considered as a connector for accounting and decision-making systems. The enterprise architecture, which has many relevant methods for its disclosure like TOGAF [5] or BIZBOK [6], could be used as a tool for establishing the connection. Defining the most important aspects of enterprise life within the architectural description makes it possible to understand what data business users require from the accounting system. Given this, the Event-Driven Process Chain (EPC) Diagram has been used for representing the process of integrated accounting with the main areas for making the decision. Besides, for presenting the interconnection between an accounting and management system, we will make a particular mind map.
Main results. Achieving the article goal is only possible if the enterprise provides cooperation between the accounting process and all the data stores. We have to agree with I. Tekbas [7] that «digital accounting involves more than the ability to use a digital system». If an enterprise wants to face the fourth industrial revolution challenges successfully, it has to use new achievements such as artificial intelligence, robotic process automation (RPA), predictive analytics, etc. Although many accountants and researchers mentioned these modern instruments, the main emphasis of this article is that digital accounting requires appropriate infrastructure. Only getting an understanding of how the enterprise could combine accounting and digitalization will improve enterprise decision-making system. Only establishing the right place of accounting information within the enterprise architecture will allow completely using the advantages of a data-driven approach.
Based on the A. Sidornya [8], M.V. Shumeyko [9], and some other researchers' works, we could insist that the accounting engendering have to be considered as the primary tool for entanglement the data-driven approach to the decision-making system of real enter-
prises. Only getting the enterprise architecture definition makes it possible to connect accounting information with the main companies' management decision. Thus, using the engineering approach towards accounting allows developing a data-driven decision-making system. Therefore, from the author's opinion it is impossible to implement data-driven approach in terms of existence understanding of accounting engineering concept. It has to be expanded with modern system engineering achievements represented, for example, in Systems Engineering Body of Knowledge (SEBOK) [10] and other system engineering standards (ISO 15288, ISO 42010, ISO 15926, ISO 15944, etc.).
A detailed study of existing research proves a given statement about the necessity of the system engineering standards' involvement in the accounting organization. It has to be noticed that A. Sidornya [8] gives a useful review of the possibility of using accounting engineering for the enterprises' sustainable development maintenance. Her research is based on «zero derivative balance statements», which allow estimating enterprise value after excluding the influence of existed property. It seems that this approach is oriented only on limited stakeholder interests. Therefore, it requires reorientation on a wide variety of the enterprise management decision. Besides, it requires using the management statement or just the derivative balance instead of «zero derivative balance statements». M.V. Shumeyko, with co-author [9] have described the mechanisms of accounting engineering with disclosure of the particularities of how different instruments and methods are used. Despite the comprehensive list of the tools that could be used in accounting engineering, the combination of cash and liabilities still considered as the main instrument for the decision-making system. L. Popescu [11] has offered the concept «management of result» and has presented accounting engineering as information support of the management of results. The main idea here is also to combine accounting data within different equations. The engineering reduction only to usage, even the significant amount of the relationship between accounting statements and indicators, cannot be accepted. In author understanding, accounting engineering has to give a holistic view of the enterprise activity, which is impossible only on the base of data combination. Achieving a comprehensive look at enterprise could require adding new information sources or additional data slices. Providing accounting engineering must lead to change the way of accounting organizing to get a closer connection between accounting information and information request of enterprise stakeholders. So, only I. Tekbas [7] research emphasizes that the central point of accounting engineering is enabling usage of different digital systems that expanding the accounting information system to data-driven knowledge management.
Based on given analyses of existed researches, the accounting engineering domain schema is offered and represented in Figure 1. The particularities of the author's proposal are in displaying the place of accounting engineering in business architecture. Figure 1 also describes accounting relations with the primary type of strategic enterprise decision.
Fig. 1 The accounting engineering concept understanding and its relations with enterprises' business architecture elements mapping
The main advantage of accounting engineering implementation is expanding the number of instruments from other disciplines that an accountant could use in his work. Moreover, the additional tool due to
the engineering process takes the proper place within the decision-making system. The whole bunch of extra instruments is represented in Figure 2.
'System engineering ' body of knowledge (SeBOK) and other standards
Accounting principals and . taxation law
' Data management " body of knowledge (DMBOK)
Enterprise architecture frameworks
Assets, liabilities and business operations of the enterprise
International financial reporting (IFRS) international and accounting Standards (IAS)
System of accounting accounts, reporting data carriers and technologies for their transmission
The methodological base
Enterprise capital structure and its mapping on the stakeholders
' Enterprise architecture N highlighting business
architecture and accounting information system architecture
The object of accounting engineering
Сenters of responsibility
(centers of costs, profits, investments)
Financial reporting ^ requirements
Operational management of the enterprise and making current decisions
Mission
and Strategic decision
The theoretical explanation
The accounting engineering principles
Principles of accounting and financial reporting
Systemic principle and its components
Architectural principles of structuring a complex and comprehensive economic system
Principles of goal setting and principles of management by objectives (MBO)
Ability to consider security risks and threats
Supply chain (SCM)
and customer relationship (CRM) management
Cost engineering, total cost management, ABC-costing, etc.
The connection with the decision-making system
Accounting engineering
Specific types of decision (economic security, innovation
management, financial engineering),
Zero derivative balance statements
Estimated probability of assets and liabilities
Theory of Constraints (TOC)
Improving the system of accounting and analytical economic process management
Decreased focus on personal experience and intuition in decision making
Obtaining a real picture of enterprises activities efficiency
Increasing the representativeness of accounting data
Timely provision of information to users, which will support relevant decisions
Forming the data in close connection with responsibility centers
Aggregated postings and structured chart of accounts
The traditional (presented in the literature) tools of accounting engineering
The tools that
have to be considered as an accounting engineering instruments
The predictive analytics instruments
CISO 15288 and ISO 420101 for structuring accounting according to enterprise activity practice
^^ecrive entries and hypothetical processes
Dative accounting tools
The stakeholders interests estimating
Balanced score cards and strategic balance sheet
The strategic management accounting tools
OMG Essence as a tools for tracking the accounting organization project implementation
ABC-costing and budgeting. Target costing
Management reporting system
Throughput accounting and reporting system
The list of KPI (Key Performance Indicator) and OKR (Objectives and Key Results)
Fig. 2 The representation of accounting engineering theoretical groundings and practical implementation in intellectual map (maid-map) form
Concerning Figure 2, it should be noted that it was made using the intellectual map methodology. Each branch from Figure 2 described one of the essential aspects of the accounting engineering process given in the author's understanding. Some of these branches transform understanding accounting engineering from making derivative balance statements to the accounting organizing process. Existed researches, as has already mentioned, require from accounting engineering making the deferent transformation with financial report statement. Making enterprise model with system engineering approach allow expanding the number of derivative balance statement with a vast amount of management report. It becomes possible to organize strategic accounting in connection with a crucial management decision, which was holding inside the enterprise architecture. Figure 3 represented the way how the enterprise architecture mapping to the accounting system during the process of accounting organizing. For doing this, the Event-Driven Process Chain (EPC) Diagram has been used. EPC diagram describes the workflow that establishes a connection between the data-driven warehouse and different accounting reports. The existence
of a data-driven warehouse gives the possibility to perform accounting forecasting of the enterprise activity results. Moreover, the presence of the enterprise architecture model provides collecting in a data-driven warehouse only the information, which is necessary for the design-management system.
Conclusion. This paper has shown that using the accounting engineering concept gives the possibility to face the fourth industrial revolution challenges successfully. The accounting engineering aimed to satisfy the information requests from enterprise management and strategic decision-making system. Also, accounting engineering allows combining accounting with the data-driven approach for gathering information from different sources. Such a combination in the article presented as a foundation for management accounting organizing. The data-driven approach application made an emphasis on expanding the analytical and predictive capabilities of strategic management accounting. Given this, the sequence for strategic management accounting organizing has been substantiated through presenting the Event-Driven Process Chain (EPC) Model.
The problem statement of the data-driven decision-making y system implementation
The comprehensive model of
enterprise architecture which
contains the project accounting organizing
The strategic maps of Balanced Score Card concept within the enterprise business architecture model
Describing the enterprise through using the system engineering methodology
Achieving the enterprise model allows identifying e way of its realizatioi
. \!/__
/—--\
Mapping the enterprise
architecture model onto the
enterprise strategy map
achieving the strategy ma] allows its mapping on the operational management
Getting the understanding
the way of data-driven approach implementation
_^_
Start of the process of decision-system information support expanfing
Implementing the predictive analytic software to the information system
Achieving the software allows its implementing into decision-making
The requirements for Data Warehouse and estimated cost for data-driven approach supporting
The requirements for management dashboard (the set of dashboards) and for the predictive analytic software
Strategic management department
Cinancial and
accounting
department
establishing the connectio allows to expand the system of accounting reports
Deviation
reaction
scenarios
The system of management reports presented in connection with particular center of responsibility
Management accounting department
Strategic goals have been transferred for execution to other
units
The list of KPI (Key Performance Indicator) and OKR (Objectives and Key Results)
Cost reports by methods of calculation of cost and managerial slices
The organizational (administrative) regulations
L____'
X
Going through reports ► for providing the desirable security level
Economic and information security reporting
Estimating the accounting -> system maturity level (start of reengineering)
Fig. 3 The process of data-driven decision-making system implementation through the accounting engineering
process
Using the EPC diagram described the methodical approach for creating a list of accounting nomenclatures, which is expended by fixing nonfinancial information. The list of accounting nomenclatures (key performance indicators, balance statements, managerial reports, etc.) existence could give the enterprise management a useful tool for decision-making only in case of these nomenclatures integration with the predictive analytics software (Microsoft Power BI, Tableau, etc.). Although such integration only mentioned in the article, its development will be the prospect of further research by the author.
References
1. Ballou B., Heitger D.L., Stoel D. Data-driven decision-making and its impact on accounting undergraduate curriculum // Journal of Accounting Education. 2018. № 44. P. 14-24.
2. Hora M.T., Bouwma-Gearhart J., Park H.J. Data driven decision-making in the era of accountability: Fostering faculty data cultures for learning // The Review of Higher Education. 2017. Vol. 40, № 3. P. 391426.
3. Lourenço R.P., Piotrowski S., Ingrams A. Open data driven public accountability // Transforming Government: People, Process and Policy. 2017. № 11(1). P. 42-57.
4. Topchyan A. Enabling Data Driven Projects for a Modern Enterprise // Trudy ISP RAN/Proc. ISP RAS. 2016. Vol. 28, № 3. P. 209-230.
5. Desfray P., Raymond G. Modeling Enterprise Architecture with TOGAF. Amsterdam: Elsevier Inc., 2014. 285 p.
6. Pylypenko A., Litvinenko A. Institutional and architectural design of organizational development of large-scale economic and industrial systems // Economic Annals-XXI. 2017. № 165(5-6). P. 75-79.
7. Tekbas I. The Profession of the Digital Age: Accounting Engineering [Electronic resource]. 2018. URL: https://www.ifac.org/knowledge-gateway/pre-paring-future-ready-professionals/discussion/profes-sion-digital-age-accounting.
8. Sidornya A. Accounting engineering for sustainable development // SHS Web of Conferences. 2017. № 35, 01134. P. 1-3.
9. Shumeyko M.V., Sagamonova G.V., Saga-monova E.V. Improvement of Engineering Accounting and Control System in Construction on the Basis of Accounting Engineering Tools // Materials Science Forum. 2018. № 931. P. 1194-1199.
10. Guide to the Systems Engineering Body of Knowledge (SEBoK). URL: https://www.se-bokwiki.org/w/images/sebokwikifarm!w/8/8d/SE-BoKv1.4_full.pdf.
11. Popescu L. Accounting Engineering and Management of Results // International Journal of Research in Humanities and Social Studies. 2019. Vol. 6, № 7. P. 31-35.
Ф1НАНСОВА ПОЛ1ТИКА УКРА1НИ
Галайко А.М.
Львiвський нацiональний yuieepcumem iMem 1вана Франка, Львiв FINANCIAL POLICY OF UKRAINE
Halaiko A.
Ivan Franko National University of Lviv, Lviv
АНОТАЦ1Я
Висвгтлено структуру фшансово! политики Укра!ни. Визначено мюце фшансово! полггаки розвитку агропромислового комплексу в загальнодержавнш фшансовш полггищ. Встановлено зв'язки мiж елемен-тами загально! фшансово! полггаки Украши та компонентами фшансово! полггаки в агропромисловому комплекса Охарактеризовано бюджетну полггаку розвитку агропромислового виробництва в Украшг Представлено структуру податково! пвдтримки агропромислових суб'екпв господарювання. Визначено взаемозв'язок бюджетно! i податково! полггаки розвитку агропромислового комплексу. Представлено структуру державно! фшансово! тдтримки розвитку агропромислового виробництва як частини бюджетно! политики розвитку ще! сфери економiки Украши. Представлено шструменти i суб'екти податково! шдтримки агропромислового комплексу. Запропоновано державну фшансову тдтримку харчово! проми-словосп, яка полягае в наданш державою бюджетного фшансування тдприемствам ще! галузi економiки за умови залучення ними певного обсягу валових капггальних iнвестицiй. Наголошено на тому, що сплата до державного бюджету i до мiсцевих бюджетiв податкiв збшьшиться внаслiдок збiльшення масштабiв дiяльностi харчово! промисловосп i сiльського господарства.
ABSTRACT
The structure of financial policy of Ukraine is elucidated. The place of financial policy of the development of agro-industrial complex in nationwide financial policy is determined. Connections between the elements of general financial policy of Ukraine and with components financial policy in agro-industrial complex of Ukraine are established. Budget policy of the development of agro-industrial manufacture in Ukraine is characterized. The structure of tax support of agro-industrial economic entities is presented. Interconnection budgetary and tax policy of the development of agro-industrial complex is determined. The structure of state financial support of the development of agro-industrial manufacture as part of budgetary policy of the development this sphere of the economics
