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FACTORS INFLUENCING ACTIVITY BASED COSTING (ABC) ADOPTION IN MANUFACTURING INDUSTRY
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In the 1980’s much criticisms were raised regarding the ability of traditional cost accounting
to provide relevant, timely, and accurate information to the management. During that period, ABC
has emerged as one of the management accounting tools that recognizes such concern. Since then
ABC has gained its popularity and has received substantial attention from various parties including
the academicians, practitioners, and industries. ABC has also been studied from various perspectives
for quite some time in many countries. Literatures are enriched with studies that have argued that the
adoption of ABC benefits organizations. Unfortunately, studies have also found that the level of
ABC adoption is still considered low. Many organizations still use the traditional cost accounting
methods in dealing with overhead costs. This study investigates the status of ABC adoption among
manufacturing organizations in Malaysia, and the factors influencing its adoption. Mail survey questionnaires
were distributed to manufacturing organizations throughout the country using purposive
judgment sampling. The questionnaires were directed to the accountants or heads of accounts of selected
manufacturing organizations. The study found that ABC adoption in Malaysia is at infancy
stage, with 36% adoption rate. The factors that influence ABC adoption are decision usefulness of
accounting information, organization support, and internal measures of performance.
NONE
FACTORS INFLUENCING ACTIVITY BASED COSTING (ABC) ADOPTION IN MANUFACTURING INDUSTRY
Accounting
English
Investment Management and Financial Innovations,
2007
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