Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

Segment Report on Management Pharmaceutical Enterprises

Author(s): Ngoc Thi Bui, Phuong Thi Thanh Nguyen

The segment report provides managers with information to evaluate business results by unit, region, and group of commodity rather than report the overall results of the whole enterprises. This article focuses on research of segment reports by divisions in service of the administration of pharmaceutical companies through the contents as follow: identifying segments to report, understanding actual content, targets, types of reports, allocation of revenues, general costs to each division, and administrator’s assessment of the effect of segment report. Case study method passed through in-depth interviews with more than 30 cases in 23 pharmaceutical enterprises. The results show that enterprises make segment reports by business sector (81.16%), with high frequency (mean 3.95); by geographical area (56.52%), with relatively high frequency (mean 3.38); other criteria (29.57%), with low frequency (mean 2.62). Segment reporting is used in controlling activities (75.36%, mean 3.36); performance evaluation (76.81%, mean 3.10); decision making (60.87%, mean 3.78). The use of segment report tends to decrease by business type from Joint Stock Co., Co., Ltd., Single-member, Co., Ltd., Private Co. In this research sample, the enterprise size decreases along with the type of business which is also a characteristic of Vietnamese enterprises. The drawback of the segmental reporting in these businesses is influenced by financial accounting, lacks uniformity and inflexibility. Through the research findings, the authors have proposed ideas to help businesses establish more effective segment report system.