Abstract

http://ssrn.com/abstract=1909979
 
 

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Developing Accurate Costing Systems


Christopher S. Chapman


Imperial College Business School

Anja Kern


Imperial College London

August 15, 2011

AAA 2012 Management Accounting Section (MAS) Meeting Paper

Abstract:     
Developing accurate cost systems is not only a technical, but also an organizational challenge, as it requires taking into account the knowledge of non-accountants. However we know very little about this process of how cost systems are made more accurate in practice. This study, reporting the results from a field study undertaken in a UK Hospital, makes two main contributions: Firstly, we suggest that reducing the total error through trade-off or off-setting effects misses an essential point, even if it may reduce the total error. Errors are not only sources to improve accurateness of costs but also play a positive role in the management of efficiency. Secondly, we find that there is a recursive process of making cost systems more accurate. We identify that this process is on-going without necessarily converging on an optimal end-state of error level. This understanding has significant implications for designers and users of costing systems.

Number of Pages in PDF File: 25

Keywords: costs system design, errors, process

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Date posted: August 15, 2011  

Suggested Citation

Chapman, Christopher S. and Kern, Anja, Developing Accurate Costing Systems (August 15, 2011). AAA 2012 Management Accounting Section (MAS) Meeting Paper. Available at SSRN: http://ssrn.com/abstract=1909979 or http://dx.doi.org/10.2139/ssrn.1909979

Contact Information

Christopher S. Chapman (Contact Author)
Imperial College Business School ( email )
South Kensington Campus
Exhibition Road
London SW7 2AZ, DC SW7 2AZ
United Kingdom
Anja Kern
Imperial College London ( email )
South Kensington Campus
London SW7 2AZ
United Kingdom
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