Activity-based costing user satisfaction and type of system: a research note

This paper examines user perceptions of Activity-based costing (ABC) performance for three different types of system in a major information and communication provider in South East Asia. Few prior ABC studies have considered the effect of system type on ABC performance. The study draws on a survey of 54 developers and 181 users of 16 different ABC systems within the organisation to produce five performance constructs (cost accuracy, cost-benefit trade-off, ABC impact, information use, and decision action). The results show that both the development inputs and user performance perceptions varied with the type of system (embedded, stand-alone, ad-hoc). While embedded systems enjoyed far stronger inputs (e.g. top management support, rewards and recognition, task significance) and greater development team cohesion than stand-alone systems, they were perceived by users to perform significantly less well. These findings suggest that system type is an important factor in assessing ABC performance

The implications of intellectual capital on performance measurement and corporate performance

The traditional performance measures fail to capture and monitor multiple dimensions of performance; they concentrate almost only on financial aspects of the organizations. Intellectual capital (IC) gives rise to benefits that are hard to quantify, such as management, customer retention, R&D, and innovation. These benefits are not captured by the traditional measures. This suggests that they are not adequate for the current information age, which encompasses new business environment and realities. This paper examines the impact of the degree and form of IC on management accounting practices, specifically, performance measurement and corporate performance. We explore whether firms investing heavily on IC are more likely to emphasise non-financial measures. We also examine whether the degree of IC values in these firms influence their performance. The paper reports the results of a study conducted through a survey in over 100 large companies covering both high and low levels of IC. The study explored both the role of management accounting information and that of the management accountant. Results suggest some evolution in performance measurement approaches due to the impact of IC and they also indicate that IC does influence corporate performanc

A study on intellectual capital, management accounting practices and corporate performance in six large Malaysian companies

knowledge and information are prime commodities in today’s ‘knowledge-economy’ where economic enterprises are increasingly knowledge-based and technologically-driven. Knowledge firms have a large proportion of their investment in intangible assets, and this poses a real challenge both for financial and managerial accounting that traditionally have not adequately reflected the investment and performance of intangibles in financial statements. increasingly, however, it is being recognised that intangible assets and intellectual capital (IC) are the keys to attaining competitive advantage for knowledge firms (Segelod, 1998), especially in the world’s liberalised economy. knowledge-based assets are the foundation for success in the 21 st century. Wiig (1997) argues that knowledge and IC play a fundamental role within modern enterprises, many leading organisations, such as Skandia Insurance and Ernst &Young, have successfully managed knowledge and IC. Klein and Prusak (1994) define IC as “packaged useful knowledge”. Sullivan (2000) suggests that IC basically constitutes knowledge, lore, ideas, and innovations

Team and system performance : a case study of two ABC projects

Recent literature has shown a renewed interest in implementation of information system implementation research. Current trends in the organisational deployment of IS tools have motivated new studies of Activity Based Costing (ABC) implementation efforts. This paper reports on two case study investigation of ABC system project. An interview schedule of 13 ABC team members’ and users’ experiences developing ABC systems and user perceptions of ABC performance is highlighted and compared. A preliminary case of ABC implementation in the two ABC projects will be discussed. Engineers, accountants, and senior executives were interviewed across the 2 ABC projects in the organisation. Interview instrument, based on previously validated measurement of ABC team and user experience through questionnaires were adapted and validated to suit the interview questions. The results revealed that both ABC projects had team members that were highly cohesive in nature, and with very high conflict resolution ability. ABC performance was deemed successful and effective as perceived by their users in areas of cost accuracy and increased dollar improvements. However, these effects were rather minimal and yet to be justified over time. Nevertheless, overall ABC users across the two ABC projects revealed that there were positive impacts of ABC felt by its implementation. This paper is intended to share two ABC projects implementation experience in the organisation. It is hoped, to shed light on various team and performance problems that future consideration for ABC innovatio

The misapplication of capital investment appraisal techniques

Surveys of capital budgeting practices in the UK and USA reveal a trend towards the increased use of more sophisticated investment appraisals requiring the application of discounted cash flow (DCF) techniques. Several writers, however, have claimed that companies are underinvesting because they misapply or misinterpret DCF techniques. Such claims have been made on the basis of observations in only a few companies, or anecdotal evidence, without any supporting statistical evidence. Reports on a recent survey conducted by the authors which suggests that many UK firms are guilty of misapplying DCF techniques. Also provides evidence relating to some issues that have not been thoroughly examined in previous studies, namely the impact of company size and the relative importance that firms attach to different investment appraisal techniques

System breakdown: how good is your company's cost information?

Provides information on a survey about cost system design and profitability analysis. Purpose of using profitability analysis; Problem in most organization's cost system; Impact of the size and type of business on the adoption of activity-based costing; Factors that influence the sophistication of the costing systems and the information extracted