The moderating effect of corporate size on the relationship between prospector strategy and management accounting practices

The relevant role of management accounting within large companies is highly rec ognized. However, there is little evidence of its role in Small and Medium-sized Enterprises (SMEs), especially concerning the variables affecting the adoption and usefulness of Management Accounting Practices (MAPs). This study aims at verify ing the moderator effect of corporate size on the relationship between prospector strategies, governance bodies and MAPs. In detail, the governance bodies’ demand for MA and the prospector strategy (oriented to opportunity-seeking and problem anticipating) can affect MAPs’ adoption and usefulness, especially when investigat ing the role of corporate size as a moderator variable. A survey was administered to a sample of SMEs located in Italy. Descriptive statistical analysis and ordinary least squares (OLS) models were employed. The empirical analysis shows that the gov ernance bodies’ demand for MA positively affects both MAPs’ adoption and useful ness. The prospector strategy also positively influences the level of MAPs’ adoption. This study confirms the critical role of corporate size but as a moderator variable. The corporate size negatively moderates the positive effect of a prospector strat egy on MAPs’ adoption. Hence, the prospector strategy is more positively linked to MAPs’ adoption for smaller firms than for bigger firms. Thus, the prospector strat egy among smaller companies is fundamental when promoting the spread of MAPs to support decision-making processes.