THE ROLE OF INFORMATION TECHNOLOGY IN THE

TRANSFORMATION PROCESS OF ACCOUNTING IN THE

CROATIAN HOSPITALITY INDUSTRY
MILENA PERI, Ph.D., Full Professor
Faculty of Tourism and Hospitality Management, University of Rijeka
51410 OPATIJA, IKA, Primorska 42, p.p. 97;
e-mail: Milena.Persic@hika.hr

MARIJANA STOJANOVI, M.sc.

Croatian Pension Investment Company
10 000 Zagreb, Mihanovieva 3;
e-mail: marijana.stojanovic@hmid.tel.hr

Abstract

The task of the accounting information system (AIS) of the hotel company is to create and
present relevant financial information, understandable and comparable by criteria and
standards of the global tourist and financial markets. Information technology this process
facilitates accelerates and makes it cheaper.

The set task must be performed taking into consideration accounting theory, methods,
practice, regulation, and the most important, Uniform System of Accounts for the Lodging
Industry (USALI), a system for the preparation of accounting reports and financial statements
in standardized formats, respecting all specific industry features.

For business transparency, the most important accounting information are those based on
interim and segment reporting standards. To prepare relevant information about enterprises
products and services, its geographic areas, and its major customers the special software is
needed which has to be compatible with the requirements of IAS 14 and SFAS 131.
Furthermore, USALI methodology has to be adjusted to the real organizational structure and
real information requirements of particular hotel company.

The preparation of financial statements is easy and quick if it is connected with the system of
internal reporting, because financial statements emerge from the summarizing and grouping
of the information created for internal accounting reports.

The second step which is possible by using modern information technology is presentation of
financial reports on the corporate web sites. For this purpose the Extended Business Reporting
Language (XBRL) is created, standards based method for preparing, publishing in a variety of
formats, exchanging and analyzing financial statements and the information they contain.

The paper explores the influence of technological advancements on the functions of

accounting and financial reporting. The emphasis is on the need of accounting adjustment to
the information requirements for specified purposes. Any other approach to the preparation of
managerial information does not assure the realization of the goals and the tasks of the hotel
companies.
Keywords: Uniform System of Accounts for the Lodging Industry; International
Accounting Standards, Generally Accepted Accounting Principles; Segment reporting;
Information technology;

Introduction

The Information technology has grown and will continue to grow in importance very fast. It
has significant influence on almost every human and particularly business activity.
Accounting is not an exemption. On the contrary, accounting and IT are today an integrated
whole, not a two separate disciplines. The growth of the Internet as a medium for delivering
business reporting information has altered the way information flows from companies to
investors and creditors. That structure will continue to change as companies bring new
technologies to the process and as information users find new ways to gather and analyze
information.

Introduction of computer technology in the AIS demands new approach to all relevant
accounting area: from organization of documentation and accounting techniques, throughout
transaction processing and registration, planning and control of all accounting items, to the
reporting system, but also to the area of internal and external audit. Besides described changes
for accountants, IT has significantly influenced other parties dependent on accounting
information. For example small and medium companies which have its accounting
departments outsourced in the developed countries such is Great Britain already have their
accounting on the Internet. Such information systems makes it possible to accountants online
bookkeeping system, and company users can "call their accountant" and use accounting
information for 24 hours a day wherever they are only by "pushing a button". In such systems
users always have real time information.

The use of general accounting packages, spreadsheets, financial modeling, database, decision
support and expert system software have offered support to accountants in their analytical and
decision-oriented tasks and allowed them to move from the accumulation, analysis and
preparation of financial information towards interpretation, evaluation, control and
involvement in decision making. As a result, information quality has been improved in terms
of comprehensiveness, accuracy, timeliness, frequency, and relevance. (Xiao, Z., Sangster, A.,
Dodgson, J.H., 1997 p. 14).

Numerous possibilities offered by IT also require from accountants new theoretical

knowledge and practical skills. For example, the IT curriculum in accounting should include
complementary issues and aspects of Computer Technology and applications such as General
Systems Theory, Accounting Information Systems, Business systems and design, Internet
tools etc. Researches of presence of information technology in accounting curriculums have
shown that in developed countries already exist comprehensive program of education in IT
systems and AIS to future accountants. In developing countries the situation is significantly
different. Because of that, international accounting bodies have stressed the need for a shift in
accountants' education by increasing the knowledge of IT and called the attention for the
creation of a global curriculum to serve as benchmark for developing countries (IFAC's IEG
No. 11, 1999).
Information Technology in Accounting Information System (AIS)

The IFAC defines information technology (IT) as "hardware and software products,
information systems operations and management processes, and the skills required to apply
those products and processes to the task of information production and information systems
development, management, and control" (IEG No.11, 1999). Accountants use the
advancement in information technology to do their job better, quicker, and the most important
cheaper. The manual tasks of bookkeeping and accounting entries, preparation of source
documents, checking for correctness, making journal entries, posting of general ledger and the
preparation of statements and reports take on new meaning, especially in terms of time cost
(Koroec, B. 2003. p. 146/7).

Information system is integration of material resources, programs, professionals, methods and

organizational procedures intended to collect, process, store and deliver of data and
information to users. It has four complements: material basis (hardware), intangible elements
(software), specialized personnel (lifeware) and organizational routine (orgware) (Ekonomski
leksikon, p. 319). Analogous, AIS is integration of people and equipment, designed to
transform financial and other data into information. AIS perform this transformation whether
they are essentially manual systems or thoroughly computerized. Computer based accounting
reporting system can generate accounting information for different types of reports to a wide
variety of decision makers (figure 1).

Figure 1: AIS reports and users of accounting information

Source: Sunder, S. (1997), Theory of Accounting and Control, S-WCP, Cincinnati, Ohio,p.15.

Reports provide an important interface between an information system and the users of the
system. According to their purpose, and at the most general level, they can be categorized and
classified in various types (figure 2).
 Figure 2: Various types of reports in business organization

No. Classification scheme Examples

Planning
1. Purpose Control
Operational
Income taxes
Stockholder
Government regulation.
2. Time horizon Long range
Short range
Historical
3. Scope Firm-wide
Division-wide
Department-wide
4. Occurrence Upon request
Periodic
Event - triggered
One time
5. Organizational function Production
Sales
Finance
Inventory
6. Report format Monitor
Color graphics
Computer printout
Narrated
7. Conciseness Brief
Detailed
Variance report
Source: Bodnar, G.H.(1995), Accounting Information System, 6th Edition, Prentice Hall, New Jersey, p. 404

AIS is involved in process of preparing wide rang of those reports, presenting financial data
and information about business results. Specially developed computer software can support
and assist in process of preparing information for different managers needs, in process of
decisions making. Those database software have to be able to take over the desired data from
several different applications where are stored and process them for special needs. The goal is
to provide a common and controlled method, for transforming data in information.

Financial reporting on the Internet

Many enterprises are using the Internet to communicate with customers, stakeholders,
creditors and others in a variety of ways (for example on-line buying or selling of goods and
services and other communication with customers) but for this paper the most important is the
provision of financial information for investors, creditors, analysts and other interested users.
The proportion of companies using the Web for financial reporting is increasing in all
countries with active capital markets and advanced communications networks.

Although financial reporting on the Web clearly has numerous advantages, it also creates a
number of challenges for companies, regulators and standard-setting organizations. So IFAC,
IASC, SEC and major national regulatory organizations continuously deals with this issue.
The reason for that are wide variations both in terms of the amount of content (e.g. summary
financial statements vs. detailed financial statements) and style of presentation (e.g. purely
transcription of financial report vs. inclusion of multimedia). The variations in reporting
between companies are so wide that users may thing that there are no rules for financial
reporting on the Web, but they exist. In the United States, the Securities and Exchange
Commission (SEC), in Securities Act Release No. 33-7233, indicates that the Internet is just
another media and the rules that apply to paper-based financial reporting equally apply to the
Internet. By contrast, the AICPAs opinion is that electronic sites are a means of distributing
information and are not documents.

A survey of large listed corporations in 22 countries on total of 660 companies was made in
1999 (Lymer, A, R Debreceny, G Gray, and A Rahman, 1999) to assess the extent of annual
reporting in its various forms on the Web. The results (summarised in figure 3) have shown
that 86% of the corporations surveyed had a Web site. The penetration rate varied from 100%
for Germany, Sweden, Canada and the USA, to 53% in Chile. Even in countries with
relatively low general Internet penetration rates amongst the general population, such as
France and South Africa, a relatively high proportion of corporations had a Web site. Some
62% (410) of the corporations made some form of financial disclosure on their Web sites. Of
the 410 companies that made some type of financial disclosure on the Web, 80% (327) used
HTML in some form with 57% (234) disclosing substantial elements of their complete
financial statements on the Web.
Figure 3: Stage of development of Financial Reporting by Country

Source: Lymer, A, R Debreceny, G Gray, and A Rahman (1999), Business Reporting on the Internet. London: International Accounting Standards Committee
International Accounting Standards Committee. Available at www.iasc.org.uk
In Croatia, companies mostly have Web pages, but the amount of disclosed financial
information is not significant. We have researched the Web pages of hospitality industry
companies listed on Croatian stock exchanges, and have found that neither one of them
offers financial information. The probable reason for such situation is that they are still
mostly in state ownership or have just few big owners.

Investors depend on financial information for their investment decision making. For
example, they routinely use financial disclosures in evaluating a company's growth
prospects, its riskiness and the long-term success of the company's business model .These
analyses also provide the inputs investors need to price individual securities and to make
portfolio decisions. Taken altogether, the quality of investors' pricing and capital
allocation decisions affects the relative efficiency and effectiveness of financial markets.
(McEnally, R.T., Doran Walters, p., 2003).

Big international companies (for example General Electric) already offer the possibility
of electronic delivery of Annual Reports and Proxy Statements. Also, on their web pages
they present Guides for understanding Annual Reports with the basics of how to read an
annual report even if a reader have no prior experience in finance or accounting.
Furthermore, it is evident that the relationship between IT use and external reporting
change is stronger in listed companies than in unlisted ones. This is because listed
companies have to comply with certain stock exchange regulations, which means that the
minimum reporting requirements are more stringent than for non-listed companies. For
example, in Croatia quarterly reports from companies listed the "JDD quotation"
(quotation of the so called public companies companies which have 100 and more
shareholders and shareholders capital 30 mln HRK and more) of Zagreb and Varadin
stock exchanges must be available on the stock exchanges' web sites.

Web reporting language (XBRL) and management's responsibilities

We can think about Web as a giant data warehouse, but downloading and analyzing
financial data is not always easy task. The problem is that there is no underlying common
language that will allow computers to uniquely identify financial-reporting elements on
the Web page. For example, if someone wish to obtain 20 financial statements' values and
two notes disclosure items over a ten-year period for ten companies in ten countries, he
must go to the Web site of each company, find the annual report, download in PDF or
read on screen if in HTML and then re-key the information into a spreadsheet. Such work
is long lasting and rather boring.

Because of such problems, the professionals, at the initiative of the AICPA, begins to
develop financial reporting langue of the Web, called eXtensible Business Reporting
Language. The XBRL is designed to allow users to readily find financial reporting
information on the Web and to extract needed values, for example sales, costs, margins,
contents of the notes to financial statements etc. XBRL is not a new form of accounting,
but it makes the financial information more transparent and readily available. In

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other words, XBRL is a standards-based method for preparing, publishing in a variety of
formats, exchanging and analyzing financial statements and the information they contain.
It facilitates reporting and makes it easier for companies to expose data that is valued by
investors and regulators.

XBRL provides benefits to all members of the financial information supply chain, public
and private companies, the accounting profession, regulators, analysts, the investment
community, capital markets and lenders, as well as key third parties such as software
developers, system integrators, consultants, and data aggregators. Current users of XBRL
include Morgan Stanley, EDGAR online, Reuters, and Microsoft. Other early adopters
include the UK Inland Revenue and the US Federal Deposit Insurance Corporation
(XBRL International, 2004).

Management is responsible for the realization of company's objectives, according to

defined business strategy. In the process of realization of set goals it is very important for
managers to consider all aspects of business risks, among which is also IT risk.
"Management assesses IT risks with respect to information reliability. Information
reliability depends on IT system reliability, and IT system reliability depends on IT
controls". (IFAC, March 2002) The implementation of effective IT controls will help
ensure the creation of reliable information. According to the IASB's Framework for
presentation of financial statements, information is reliable if faithfully represents the
transactions and other events; if is presented according to the substance and economic
reality, not only in legal form; if it is neutral, prudent and complete. The use of XBRL
will be helpful in creating information with such characteristics.

Information system is reliable if it is capable of operating without material error, fault of

failure. The hardware, software, data and information have to be constantly available.
Also, the IT system must be capable to authorize particular person to have access to
certain data, information and systems, or to have permission to modify of delete certain
data or information. Internet users have come to expect that information on a Web site is
the most current information available. But the timeliness is still the problem with
business reporting on the Internet. Business reporting continues to provide information in
packets, each of which is current as of the date of its release or filing. Some have
suggested that the Internet will drive business reporting from its monthly, quarterly, and
annual cycles to a system of real-time reporting.

Impact of USALI standards on reporting system in hospitality industry

Uniform System of Accounts for the Lodging Industry (in short USALI) is system for the
preparation of accounting reports and financial statements in standardized formats,
respecting all specific industry features. It was firstly issued in 1926 by the Hotel
Association of New York City, and represented the first successful organized effort to
establish a uniform responsibility accounting system for the lodging industry and one of
the first such efforts in any industry(Uniform, 1996. iii). Today, most hospitality

3
business use computers to apply USALI standards in reporting to internal and external
user, and to record and analyze the effectiveness of internal operation.

USALI contains not only the basic financial statements, but also 32 supplementary
departmental operating statements and appendices covering budgeting and forecasting,
breakeven analysis, and uniform chart of accounts. This system expects the uniformity in
acquiring, collecting, sorting, evidencing, balancing, preparing and presenting of the
accounting and statistic information in strictly formalized statements that enable the
comparison of a companys own results with competition, and average results of the
hospitality industry on the national and international level.

In order to accomplish described task, it is prerequisite to establish an internal chart of

accounts supported by IT (figure 4), to adopt relevant accounting policies and to enable
separation and allocation of fixed and variable costs. Management, accountant and IT
experts must lay together the foundation of accounting concepts to understand the
necessary data and information needed as input to AIS, with goal to prepare standardised
reports with relevant information, as the output from selected hardware and software.

Source: Prepared by Uniform System of Accounts for the Lodging Industry (USALI), 9th revised edition,
American Hotel & Motel Association and Hotel Association of New York, East Lansing, Michigan,
1996, p. 189 -198.

Presented sample chart of accounts is designed to be broad enough to have a major

number for each account that is regularly used in USALI standard reporting system, and
sufficiently detailed to provide sub-accounts for all departments or areas of significance.
There is twelve-digit numbering system, consisting of four clusters of three digits each. It
is also sufficiently flexible to allow companies, individual owners, or managers to add or
delete accounts to meet the special needs of their properties. This approach is based on

4
integrated IT system, which enables the multiple use of information (for example food
item might be used for receiving, storing, issuing recipes, production, inventory, sales
control and accounting purposes).

Segment reporting is the fundamental task of management accounting and is based on the
International accounting standard 14 (IAS 14), or on the Generally Accepted Accounting
Principles - GAAP (SFAS 131). Those are the starting points that inspire the philosophy
of the USALI, which connects IAS 14 or SFAS 131 with special hospitality management
needs. Hotels operated departments, like rooms, food, beverage and other are the most
important reporting segments, also known responsibility centres. Departmental
statements (internal statements by segments, cost centres and activities) are later
adequately summarised and presented within the frame of the Summary statement of
income. This provides a basis to the preparation of other yearly Statements: Balance
Sheet, Statement of Owners Equity, Statement of Cash Flows and Notes to the Financial
Statements, which have to be coordinated with national legislation. The fundamental
principle of responsibility accounting as a subsystem of managerial accounting is that
costs are assigned to various hierarchical levels of management which are in charge of
their control to make managers responsible for the difference between budgeted and
realised results (Garrison, R.H., Noreen, 1997, p. 389).

The distribution on controllable and uncontrollable costs is viewed from the starting point
of the hierarchical level for which the statement has been prepared, taking into
consideration the principle of economy and disregarding the insignificant items. Each of
the statements in standardised USALI reporting system is conceived to provide the
responsible manager with the information about the relation of the actual costs to the
revenues inside and among particular segments. A responsible manager has an insight
into the costs/revenues that are within his competence. Only the management of the
highest hierarchy level of responsibility is held responsible for total costs/revenues.

Internal reporting system in Croatian hospitality industry

To determine the level of introduction of the USALI in the practice of the Croatian hotel
industry and to estimate the accomplished development stage of managerial accounting
and internal reporting system in the Croatian hotel industry, an empirical research was
conducted on the representative sample of 42% of hotels (figure 5).
Figure 5 : The Structure and Features of the Investigated Sample
Description % %
Companies Hotels
I. Sample Regional Structure
1 Istra 20,0 33,5
2 Kvarner 37,5 39,5
3 Dalmacija 30,0 24,3
4 Zagreb and Continental Croatia 12,5 2,7

5
 II. Sample Structure by Organisational Structures
5 Stock Companies 85,0 95,7
6 Limited Companies 10,0 3,2
7 Institutions 5,0 1,1
III. Sample Structure by Size
8 Large 37,5 69,7
9 Medium 50,0 24,9
10 Small 7,5 1,6
11 No Response 5,0 3,8
IV. Sample Structure by Ownership
12 Completely Privatised 22,5 15,7
13 Mostly Privatised 40,0 44,3
14 Mostly State Ownership 32,5 38,9
15 Completely State Ownership 5,0 1,1
V. Sample Structure by the Form of Organisation
16 Centralised, Single Unit 40,0 26,0
17 Holding 7,5 9,2
18 Responsibility Centres 22,5 41,6
19 Economic Units 25,0 18,9
20 Other 5,0 4,3
Source: The questionnaire answered by Hotels Njivice d.d., Imperial d.d., Rab, Hotels Makarska d.d.
Makarska, Plava Laguna d.d. Pore, Sunani Hvar d.d. Hvar, Golden Tulip Holiday d.d. Zagreb, Hotel
Bonavia d.d. Rijeka, Hotels Argentina d.d. Dubrovnik, Hotels Maestral d.d. Dubrovnik, Cresanka d.d. Cres,
The Jadran Hotels d.d. Rijeka, Mozart d.d. Opatija, Hotel Excelsior d.d. Dubrovnik, Jadranka d.d. Mali
Loinj, Auto Centar Zubak d.o.o.- the Cristal Hotel branch Umag, UGO Hotels d.o.o. Hotel Millenium
Opatija, Anita d.d. Vrsar, the Daruvar Spa, Daruvar, Jadran d.d. Crikvenica, Arenaturist d.d. Pula, Hotel
Lapad d.d. Dubrovnik, Hotels Novi d.d. Novi Vinodolski, Hotels Punat d.d. Punat, The Varadin Spa
Medical Rehabilitation Clinic, Kinning d.o.o. Krk, Slavonka d.d. Naice, The Bizovac Spa d.d. Bizovac,
Jadran turist Rovinj d.d. Rovinj, Rabac d.d. Rabac, Turisthotel d.d. Zadar, Riviera holding d.d. Pore,
Borik d.d. Zadar, Rovinjturist d.d. Rovinj, Hotels Brela d.d. Brela, Hotels Baka d.d. Baka, HTP Korula
d.d. Korula, Hotel Lero d.d. Dubrovnik, The Liburnia Riviera Hotels d.d. Opatija, Zlatni Rat d.d. Bol.

We have indicated the features of the research sample that influence the quality and
usability of accounting information. The greatest part of the selected sample are hotels
organised as responsibility centres or economy units within large enterprises that have the
status of joint-stock companies, mostly privatised, still retaining a significant share of
state ownership. It is interesting to point out that the sample includes enterprises that have
just started developing the system of internal reporting (8%), with shorter (to 5 years
32%) or longer experience in this area (to 10 years 20%), or those that have followed this
practice for more than 10 years (30%).

Reporting to management about the internal operating results is usually assigned to

managerial, or management accounting (55%), in smaller proportion to the financial
accounting (31%), in some cases to the department for planning and analysis, controlling
or some other segment of management information system. The extent and quality of
these operations is illustrated by the fact that management accounting and reporting
department has 2 to 4 employees (in 49% cases). In most cases the traditional
management accounting methods are still used i.e. traditional costing methods, and
accounting is still mostly oriented to external users. The realised figures from previous
periods are mostly used as the comparative value in the control of actual costs.

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The standardised system for reporting on internal operations results is significantly
represented in Croatian hotel industry. Within the explored sample, 40,0 % of hotels use
the USALI completely, 28,6 % partly, 4,4 % are introducing it or using it in traces, 20,5 %
intend to introduce it, and the remaining 6,5 % consider this system unnecessary.

The organisation of responsibility accounting and the system of management reporting in

hotel enterprises should be based on the branch particularities and the accomplished
development level of managerial accounting, respecting the USALI standards. We
therefore estimate the frequency of using of the fundamental statements proposed by the
USALI (figure 6), based on the original demands to compile particular statements and the
users' need for information. It is easily detectable that the first place belongs to statements
for the rooms department, follow the food department and for the beverages department.
According to the usefulness of information follow statements about rentals and other
incomes, about human resources and salaries and wages. According to the interest of the
examinees it is additionally useful to compile the statements about utility costs,
depreciation and amortisation, marketing, rent, property tax and insurance, interest costs,
and telecommunication department.

Figure 6: The Frequency of Statements Proposed by the USALI

No . Statement Positive No. Statement: Positive

responses responses
1. Rooms 30 17. Information System 5
2. Food 30 18. Security 3
3. Beverages 29 19. Marketing 15
4. Telecommunications 13 19a. Franchise Fees 0
5. Garage and Parking 5 20. Transportation 6
6. Golf Course 0 21. Property Operation and
7. Golf Pro Shop 0 Maintenance 11
8. Guest Laundry 6 22. Utility Costs 18
9. Health Centre 4 23. Management Fee 5
10. Swimming Pool 7 24. Rent, Property Tax and Insurance
11. Tennis 6 Interest Expense 14
12. Tennis Pro Shop 1 25. Depreciation and Amortisation 13
13. Other Operated 26. Income Taxes 16
Departments 8 27. House Laundry 10
14. Rentals and Other 28. Salaries and Wages 7
Income 20 29. Payroll taxes and Employee 20
15. Administrative and 30. Benefits
General 15 Gaming Operations 10
16. Human Resources 20 31. 1

Source: The questionnaire answered by.

IT system is especially important in compiling daily reports. It can be noticed that the
examinees believe that is necessary to establish daily reports about the structure of
realised revenues according to the kinds and criteria of payment (figure 7). But in the
practice manager also needs the structure of direct and some variable cost, which can be
traced on daily base (for example the direct material costs in food department). The
examinees at the same time think that monthly statements are sufficient when talking
about all kinds of costs and realised margin results. Manager in Croatian hospitality
industry are mostly oriented to the monthly internal reports, which are the base for

7
preparing Summary Statement of Income. To prepare information about realised / planed
result and variances, we need interactive programs, which prompt the user sequentially
step by step. It is normally easier to use such programs than the integrated software,
because it helps to ensure that no information that should be entered by the user is
omitted.

Figure 7: The Frequency of Managerial Information Demands

Information Importance by the Users Assessment

Rooms Department Food and Beverages Other Tourist Services
Segment Reporting Department Departments
Daily Weekly Monthly Daily Weekly Monthly Daily Weekly Monthl
y
Units Revenue Structure 28 9 16 28 10 14 24 9 17
Criteria of Payment 18 6 15 21 11 12 17 9 15
Realised/Planned 4 3 29 4 2 28 4 2 30
Revenues
Unit Cost Structure 5 4 30 4 6 27 2 9 22
Direct Material Costs - - - 10 9 21 5 9 24
Indirect Material Costs - - - - 4 28 1 5 26
Realised/Planned Costs - 3 30 1 3 28 1 2 30
% Realised Margin - - - 5 9 23 3 5 25
% of Margin - 3 20 3 3 24 2 1 23
Contribution
Gross Operating Profit 2 3 29 1 6 29 2 4 27
Realised /Planned Result 1 3 25 3 3 29 2 1 29
Realised /Planned Price - - - 7 6 21 3 2 23
Variance of Standards - - - 9 10 16 5 8 16

Source: The questionnaire answered by.

Conclusion

The rapid development of modern information technologies has significant influence on

accounting and financial reporting. Accounting process is facilitated, fastened and made
cheaper. Information are quicker on disposal to their users. The Internet has become the
irreplaceable means for communication with owners and investors. These changes also
require new knowledge and skills from accountants. Because of that the accounting
curriculum at universities has to be changed. It is already done in the developed
countries, but still remains to be done in the developing countries. Croatia is not an
example.
The described changes are also present in Croatia, but there is also the room for
significant improvements. The research results of the hospitality industry accounting
practice prove that the accomplishments of the world practice are already present in the
Croatian hotel industry, but they also offer an array of useful suggestions which would
contribute significantly to the transparency and better quality of accounting reports,
starting from the necessity of additional education for the management of all hierarchical
decision making levels about management accounting and the USALI, to the higher
introduction of the information technology in this area. More prompt and more universal

8
introduction of the entire USALI, would lead to the standardisation of the segment
reporting in the Croatian hotel industry and tourism.

This would ensure the transition from the current low development level of the
managerial accounting to the higher levels, and force the development of responsibility
accounting, whose aim it is to provide timely and transparent information on particular
costs, revenues and results that are able to fulfil the information needs of internal and
external users. The further researches and application of useful knowledge in this area is
suggested, aimed at the advancement of practical work and greater competitiveness of
Croatian hotel industry and tourism.

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Schmidgall,R.S. (1997), Hospitality Industry Managerial Accounting, Educational
Institute, American Hotel&Motel Association, Lansing.
Selig,E.R., Wolfe,F. (2002), The Uniform System of Accounts for the Lodging Industry -
10th edition, Bottomline, Vol.17, Number8, I/2002, pp. 8 -30.
Sunder, S. (1997), Theory of Accounting and Control, S-WCP, Cincinnati, Ohio.
The questionnaire that was answered by the following hotel enterprises during the
research: Hotels Njivice d.d., Njivice, Imperial d.d. concern Imperial Rab, Hotels
Makarska d.d. Makarska, Plava Laguna d.d. Pore, Sunani Hvar d.d. Hvar, Golden Tulip
Holiday d.d. Zagreb, Hotel Bonavia d.d. Rijeka, Hotels Argentina d.d. Dubrovnik, Hotels
Maestral d.d. Dubrovnik, Cresanka d.d. Cres, The Jadran Hotels d.d. Rijeka, Mozart d.d.
Opatija, Hotel Excelsior d.d. Dubrovnik, Jadranka d.d. Mali Loinj, Auto Centar Zubak
d.o.o.- the Cristal Hotel branch Umag, UGO Hotels d.o.o. Hotel Millenium Opatija,
Anita d.d. Vrsar, the Daruvar Spa, Daruvar, Jadran d.d. Crikvenica, Arenaturist d.d. Pula,
Hotel Lapad d.d. Dubrovnik, Hotels Novi d.d. Novi Vinodolski, Hotels Punat d.d. Punat,
The Varadin Spa Medical Rehabilitation Clinic, Kinning d.o.o. Krk, Slavonka d.d.
Naice, The Bizovac Spa d.d. Bizovac, Jadran turist Rovinj d.d. Rovinj, Rabac d.d.
Rabac, Turisthotel d.d. Zadar, Riviera holding d.d. Pore, Borik d.d. Zadar, Rovinjturist
d.d. Rovinj, Hotels Brela d.d. Brela, Hotels Baka d.d. Baka, HTP Korula d.d. Korula,
Hotel Lero d.d. Dubrovnik, The Liburnia Riviera Hotels d.d. Opatija, Zlatni Rat d.d. Bol.
Uniform System of Accounts for the Lodging Industry, (1996), 9 th rev. edition, The Hotel
Association of New York and American Hotel & Motel Association, East Lansing,
Michigan.
Zakon o tritu vrijednosnih papira, NN 84/02.
XBRL International, official data 2003, available at www.xbrl.org.
Xiao, Z., Sangster, A., Dodgson, J.H. (1997), "The relationship between information
technology and corporate financial reporting", Information technology & People, Vol. 10
(1997), No.1, pp. 11-30.

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