A Research Of The Performance Consequences Of Nonfinancial Measures

In times of 1990s, the emphases of management accounting practice were evolved to focus on key financial and nonfinancial drivers. Although nonfinancial measures are more and more widely used, there has been relatively little research to verify their performance consequences. The practices of enterprises have discovered that there are no casual relations between increasing applications of nonfinancial measures and financial measures. Moreover, empirical studies of this aspect frequently educe paradoxical conclusions or faint relationships with performance consequences.Based on the study of the theoretical and methodological background of Western Management Accounting evolution, this paper uses theoretical analysis combined with empirical study. It selects the listed companies as the sample, and makes comprehensive and systematical study of nonfinancial measures' performance consequences. The most important two issues are: (1) the theoretical basis of nonfinancial measures' performance consequences; (2) the relationship between applying nonfinancial measures and corporate performance consequences.In the theoretical aspect, this paper is based on the characteristic of Western Management Accounting grounded on economics, and give attention to many theories. We select the methodology with contingency, and the paper apply Information Economics and Contingency Theory to expound and demonstrate the issue of nonfinancial measures' performance consequences.Results of Information Economics indicate that nonfinancial measures are value relevant with enterprises'performance consequences. Due to the inherent limitations of Information Economics and complex characteristics of nonfinancial measures, the simplex economics based study only reflects the faint relationship between nonfinancial measures and performance consequences, while does not reflect the proper application background of nonfinancial measures. Then, Contingency Theory can be useful complementarities to study the contingency factors relevant with nonfinancial measures. The more sufficient the contingency relationships under Contingency Theory, the more adaptive the environment connects to nonfinancial measures, and the more vigorous the incremental information relating to performance consequences. As incremental information is the basis of value relevance in the...