Abstract
As the business environment has been changing continuously, it is critical to ensure that an appropriate MA system is adopted in organizations for intended purposes. The main objective of this study is to investigate patterns of adopting management accounting (MA) techniques by Sri Lankan listed companies for product costing purposes. This study applies Mixed Method Research approach. Accordingly, data were collected from 42 listed companies representing five industry sectors in Sri Lanka: Food Beverages & Tobacco, Chemicals & Pharmaceuticals, Diversified Holdings, Manufacturing, and Plantation, through interviews and discussions supplementary to the survey. The main tools of analysis for quantitative data were frequency tables, Pie charts, bar charts and Fisher’s exact tests using SPSS software, and thematic analysis and content analysis for descriptive data. The findings suggest that Traditional Costing (TC) systems are still popular among all selected industry sectors/companies except for Plantation sector who apply TC by 25% of companies, as they all apply ABC instead. Considering multiple costing systems, the most popular combination is the application of TC with an activity based costing (ABC) system, as complements or alternatives to one another. The study concludes that listed companies are satisfied with the MA techniques adopted for product costing as either single or multiple systems, regardless of whether they are traditional or modern techniques. Even though Sri Lankan listed companies are functioning with sufficient resources and well-equipped staff that require adoption of modern MA techniques i.e. ABC, most reveal that they still see no need to adopt such techniques because they are satisfied with existing systems and applications.
Highlights
As the modern business world is highly competitive, business firms must become more competitive on a global basis in order to survive in businesses (Indrani and Herath, 2009)
Even though Sri Lankan listed companies are functioning with sufficient resources and well-equipped staff that require adoption of modern management accounting (MA) techniques i.e. activity based costing (ABC), most reveal that they still see no need to adopt such techniques because they are satisfied with existing systems and applications
The data analysis initially focuses on the level of adopting MA techniques for product costing by responding companies in terms of comparative figures and/or percentages.For this purpose, traditional techniques indicated commonly as traditional product costing (PC) systemsinclude traditional costing (TC), batch costing, process costing, job costing and standard costing, and modern techniques include ABC systems.The study shows that except for the PLT sector, all sectors apply traditional PC to the maximum (100%)
Summary
As the modern business world is highly competitive, business firms must become more competitive on a global basis in order to survive in businesses (Indrani and Herath, 2009). Changes in business environment triggered by global competition and technological innovation have led to innovations in the use of both financial and non-financial information within the organization (Soekardan, 2016)
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Accounting and Business Finance
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
