Optimization of Cost And Management Accounting or Multipurpose Primary Agricultural Cooperative Societies

Abstract

Indian Multipurpose Primary Agricultural Cooperative Societies (MPACS) are an important element of rural finance and agribusiness. These entities normally do not adhere to standardized Cost Management Accounting (CMA) system. They provide weak financial controls, disorganized reporting and low accountability. In this backdrop it is imperative to study the accounting process followed by such MPACS and suggest a forward-looking approach. This study evaluates the applicability of a composite CMA model to enhance transparency, accountability, and financial sustainability in such MPACS. The study adopted a cross-sectional research methodology. The economic data from 72 MPACS across three states of India were analyzed using regression and structural equation modeling (SEM). The proposed model had undergone for validation by the experts in the cooperative sector. Findings demonstrate that the adoption of technology, the presence of qualified accountants and the involvement of management plays an important role in achieving effective use of cooperative management. The application of CMA leads to greater cost effectiveness, profitability, and transparency in the governance. The proposed model is in alignment regulatory reforms of NABARD. This model can be used in rural contexts of different settings. These findings provide practical approach to policymakers and cooperative leaders to institutionalize CMA systems. It will strengthen financial discipline, ensure accountability, and promote the long-term sustainability of India's cooperative sector.