Enhancing Intellectual Capital through Management Accounting System: Evidence from Indonesian State-Owned Enterprises

Abstract

The transformation of intellectual capital (IC) through management accounting systems is a critical concern in modern industries, particularly within state-owned enterprises (SOEs). IC, which encompasses knowledge, skills, and innovative capabilities, plays a fundamental role in enhancing firm value and sustaining competitive advantage. Despite its importance, many companies struggle with effectively managing and leveraging their IC. This study investigates the impact of management accounting systems on the development of IC and the subsequent effect on firm performance in Indonesian SOEs. A survey method was employed, collecting data from 320 respondents, and the analysis was conducted using Structural Equation Modeling-Partial Least Squares (SEM-PLS). The findings reveal that an effective management accounting system not only significantly enhances IC but also leads to substantial improvements in firm performance. These results underscore the necessity for SOEs to invest in advanced management accounting systems to drive efficiency, foster innovation, and achieve sustainable growth. This study provides valuable insights for policymakers and practitioners aiming to optimize IC management within the SOEs sector.