Why ABC is Not Widely Implemented?
6 Pages Posted: 31 Mar 2009 Last revised: 15 Feb 2010
Date Written: March 31, 2009
Abstract
This paper uses the results of two survey studies to explore the most important contextual factors influencing the implementation of activity based-costing across firms. The results of the first survey, carried out in 1997 within the Plastics and Chemicals Industries Association (PACIA) in Australia proposed the perceived advantages and disadvantages of management accounting techniques as the most influential contextual factors influencing the implementation of accounting changes. The findings of the second survey carried out in 2002 within industries registered with CPA Australia as well as with PACIA highlight the significant impact of attributes (advantage/disadvantage) of innovation on decision to implement or not management accounting innovations. Using the results of above surveys, this paper examines the level of association between attributes of innovation and the diffusion of activity based-costing. The findings suggest that the relatively low implementation of ABC across firms implies that decision makers remain unconvinced that whether ABC's advantages over traditional accounting techniques are high enough to pursue them to implement ABC in practice. In other words, this study suggests that one of the main influential factors significant to the implementation of ABC links to its attributes in terms of its relative advantage over traditional techniques; its complexity; its compatibility; the observability of its results and its trialibility.
Keywords: management accounting change, diffusion and innovation, contextual and influencing factors and implementation of ABC
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
By Davood Askarany, Malcolm Smith, ...
-
Contextual Factors and Administrative Changes
By Davood Askarany and Malcolm Smith
-
Technological Innovations, Activity Based Costing and Satisfaction
By Davood Askarany, Malcolm Smith, ...
-
Diffusion of Innovation and Business Size: A Longitudinal Study of PACIA
By Davood Askarany and Malcolm Smith
-
Supply Chain Management, Activity-Based Costing and Organisational Factors
By Davood Askarany, Hassan Yazdifar, ...
-
By Davood Askarany and Hassan Yazdifar
-
By Davood Askarany and Hassan Yazdifar
-
Management Accountants' Role in Dependent and Independent Companies: Does Ownership Matter?
By Hassan Yazdifar, Davood Askarany, ...
-
By Hassan Yazdifar and Davood Askarany