Raising awareness of the benefits of certification and assurance services
‘The financial effects of ISO 9000 registration for Danish companies‘ (Häversjö, 2000) searches for links between ISO 9000 certification and companies’ financial performance. To do this, the accounts of 734 Danish companies with accredited certification are compared with 644 similar size but non-certified companies. The conclusion is ’In general, the ISO population companies seem to have a significantly higher rate of return than the control population both before and after registration’.
Caution is added in that ‘the bottom line in any company’s accounting statement reflects a variety of components such as the success/failure of product development, production efficiency, marketing, logistics and the company’s ability to make effective use of their overhead functions. Several of these functions, e.g. accounting administration, sales and marketing are not covered by the ISO 9000 standards’.
However, the paper makes the suggestion of ‘plausible positive loops that could materialise and transform the effects of ISO 9000 registration into phenomena visible in the accounting statements.’ This can be seen in the figures presented, ‘The year prior to registration their rate of return is 20% higher than that of the control population – two years after registration, their rate of return is 35% higher than that of the control population’.
The conclusion is that, ‘Through registration the [typical ISO certified] company is able to formalise processes and systems and to achieve better control over documents and subcontractors. In terms of sales, the ISO 9000 certificate opens new doors and generally improves the image of the company’.
Institute of Operations Management Accounting, Copenhagen Business School (Häversjö)