Abstract

 The purpose of this study is to investigate the differences in perceptions, i) on the usefulness of costing information produced by ABC and the traditional costing system, and ii) between users and preparers. The respondents were selected using disproportionate stratified random sampling method among staff in the biggest public university in Malaysia with a multi-campus university system. Twelve branch campuses across the country. The data was collected using structure postal questionnaires that were distributed to 153 respondents across all of their campuses. The results indicated that respondent perceived the information produced by ABC system as of higher functionality as compared to the traditional costing system information. The finding also showed that there was no significance difference between users and prepares with regards to the quality of ABC system, but users perceived the ABC information is of higher functionality than do the preparers.
Highlights
Activity-based costing (ABC) system was known to focus the management attention on the cost of key activities, better understanding of what causes such costs and what changes are necessary to reduce the costs
As can be indicated that, there is no significant difference of quality of information produced by ABC system as compared to the traditional system (p > 0.05: p= 0.54). This result indicated an inconsistency with the earlier claim that ABC information is of better quality than traditional cost information (Argyris and Kaplan, 1994; McGowan, 1998)
As the results indicate that there is no significant difference of quality of information produced by ABC system as compared to the traditional system
Summary
Activity-based costing (ABC) system was known to focus the management attention on the cost of key activities, better understanding of what causes such costs and what changes are necessary to reduce the costs. The urgency of implementing the ABC in HEI was due to the pressure to reduce operating costs (Boehner and McKeon, 2003; Fong, 2005) as well as increase accountability (Davies and Thomas, 2002; Mir and Rahaman, 2007). These pressure lead to the universities’ administrations to have a more sophisticated costing technique to improve cost control in higher educational institutions. As the acceptance can be proxy using the “perceived usefulness” of the stakeholders, several studies demonstrated that people are more accepting of an innovation that they believe is useful (Robey, 1979), and will improve job performance (Davis, 1989)
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