Technological Innovations, Activity Based Costing and Satisfaction

Journal of Accounting - Business & Management, Vol. 14, pp. 53-63, 2007

12 Pages Posted: 31 Mar 2009 Last revised: 28 Aug 2012

Davood Askarany

University of Auckland - Department of Accounting and Finance

Malcolm Smith

Edith Cowan University - School of Accounting, Finance and Economics

Hassan Yazdifar

University of Glasgow

Date Written: March 31, 2009

Abstract

For past two decades, it has been argued that traditional management accounting practices have failed to cope with the requirements of technological changes in manufacturing practices (Askarany, 2005, 2003; Baines & Langfield-Smith, 2003; Beng, Schoch, & Yap, 1994; Bork & Morgan, 1993; Cavalluzzo & Ittner, 2003; Cooper & Kaplan, 1991;Gosselin, 1997; Hartnett & Lowry, 1994; Kaplan, 1984, 1994; Maiga & Jacobs, 2003; Lefebvre & Lefebvre, 1993). In particular, it has been claimed that traditional management accounting techniques are unable to satisfy the users of such techniques in terms of providing them with timely and detailed information. In response to this issue and to overcome the shortcomings of traditional management accounting techniques, activity based-costing (ABC) was introduced in 1980s.

However, despite the claimed benefits of ABC, the level of implementation of ABC is still lower than those of traditional management accounting techniques. Shedding light on this debate, current study first examines the level of association between technological changes in manufacturing practices and the level of implementation of ABC to see whether (or not) implementation of technological changes may lead to the implementation of ABC. Then it tests the level of association between the implementation of ABC and the level of satisfaction of ABC's users to see whether (or not) the adopters of ABC are more satisfied than non-adopters. The findings indicate that the diffusion of ABC is associated with the implementation of technological changes in manufacturing practices. However, the results provide no evidence to support that ABC adopters are more satisfied than non-adopters.

JEL Classification: M40, M46

Suggested Citation

Askarany, Davood and Smith, Malcolm and Yazdifar, Hassan, Technological Innovations, Activity Based Costing and Satisfaction (March 31, 2009). Journal of Accounting - Business & Management, Vol. 14, pp. 53-63, 2007. Available at SSRN: https://ssrn.com/abstract=1370755

Davood Askarany (Contact Author)

University of Auckland - Department of Accounting and Finance ( email )

Private Bag 92019
Auckland 1001
New Zealand

Malcolm Smith

Edith Cowan University - School of Accounting, Finance and Economics ( email )

100 Joondalup Drive
Joondalup, WA 6027
Australia
08 6304 5263 (Phone)

Hassan Yazdifar

University of Glasgow ( email )

Main Building
Glasgow, G12 8QQ
United Kingdom
+44 (0)141 330 5666 (Phone)
+44 (0)141 330 4442 (Fax)

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