Factors Affecting Responsibility Accounting: Evidence from Vietnamese Manufacturing Enterprises

Abstract

Purpose: This study aims to examine (i) the number of product lines and steps in the manufacturing process affect the responsibility cost center in a responsibility accounting system (ii) the level of technology application, the qualification of managers at all levels affect the budgetary control system integrated to the responsibility accounting system in Vietnamese manufacturing enterprises. Theoretical framework: The research identifies and examined the impacts of the number of product lines, the number of steps in the manufacturing process on the number of responsibility cost centers, and the impacts of the level of technology application, the qualification of managers at all levels on the budgetary control system to contribute the responsibility accounting system theory. Design/methodology/approach: A quantitative approach was applied with a sample of 108 Vietnamese manufacturing enterprises that is listed on the Vietnamese financial securities markets in 2020. OLS regression is applied to give a further analysis. Findings: The regression findings support the significant positive impacts of the number of product lines and the number of steps in the manufacturing process on the number of cost centers as well as the significant positive correlation between the level of technology application and the effective budgetary control system, however, the effect of the qualification of managers at all levels is insignificant. Research, Practical & Social implications: This study provides factors impacting the number of cost centers and the budgetary control system. The results of this study support the contingency theory. Originality/value: These findings can be useful for Vietnamese manufacturing enterprises to take measures to strengthen cost control through the responsibility accounting system, thereby improving business efficiency.