The role of management accounting practices in intellectual capital management in Iraq

The purpose of this study is to explore whether adoption of Management Accounting Practices (MAPs) contributes in developing Intellectual Capital (IC) and creating value in Iraqi companies. The findings reveal many of the problems experienced by Iraqi organisations in managing, establishing and developing of intellectual capital. The findings also present many themes that support the adoption of the Management Accounting Practices in solving these problems as well as themes that agree with the philosophy of the Management Accounting Practices in management of intellectual capital. The study revealed that Management Accounting Practices namely Strategy Map (SM), Beyond Budgeting (BB) and Balanced Scorecard (BSC) are relevant in various activities of intellectual capital management such as establishing, developing, planning, controlling, measuring and assessing performance of intellectual capital. The findings of the study reveal that the Real Option Value (ROV) approach is not relevant for all organisations except accounting and auditing firms and pharmaceutical firm. The findings also reveal that these organisations need to adopt a new technique to help them in making the right investment decisions in intellectual capital. This study highlights the need for more research to be done to find a suitable technique for investment decisions in intellectual capital in organizations that believe that real option value is not relevant for them. The findings show that 95% of participants think that Iraqi accountants are unable to apply MAPs in Intellectual Capital Management (ICM). This percentage is a significant indicator that warrants another in-depth study to explore the causes of this challenge and to suggest the suitable solutions for it. This study examines the contribution of MAPs in supporting, establishing and developing intellectual capital that is lacking in the literature. It also examines the main problem that has not been studied in the Iraqi economy, which is whether the management and development of IC will create new sources of value in Iraq to replace its dependence on oil as the main source of value for the country.