The Relationships Between Technological Environmental Factors And Implementation Of Abc Accounting Essay

Abstraction

In the recent old ages, there has been a considerable involvement in utilizing the advanced cost or direction accounting systems worldwide that can supply relevant information to companies runing in a changing and competitory concern environment. Activity-based costing ( ABC ) is the most of import cost accounting invention which was developed for get the better ofing the merchandise cost deformation due to the usage of traditional costing system.

This paper attempts to look into the relationships between some technological and environmental factors and execution of ABC. Data were collected through a study questionnaire sent to Chief Financial Officer ( CFO ) of fabricating companies selected from Tehran Stock Exchange ( TSE ) . A binary logit arrested development analysis was used to look into the relationships between technological and environmental factors and the execution phases of ABC. Strong support was found for the hypothesis that the consequence of the contextual factors ( degree of information engineering quality, degree of merchandise diverseness, degree of operating expenses, perceived environmental uncertainness, and degree of competition ) alteration in ABC execution phases. Furthermore, from Miles and Snow ‘s typology of scheme, consequences revealed that analysers are more likely to be in the higher ABC execution phases.

Cardinal words: Activity-based costing ; Implementation ; Adoption, extract

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

1. Introduction

Cost accounting measures the cost of merchandises or services and its information is used for direction accounting intents in the fiscal coverage procedure every bit good as in determination devising procedures such as sell or purchase determinations, transportation pricing, value stock list, cost control, and public presentation finding. Traditional cost accounting systems ( TCA ) were designed for fabricating environments in which direct costs were a larger per centum of entire costs. This system allocates overhead costs to merchandises, utilizing on volume-based measuring associating direct costs. Although its overhead cost allotment was non rather accurate, this system worked good, since direct labor and stuff, represented the bulk of the entire cost while overhead cost was merely a little fraction. But for the past three decennaries, many companies have experienced important alterations in their cost construction. Overhead cost becomes the dominant cost constituent of many merchandises. Many research workers highlight the alteration of cost construction for illustration Baker ( 1994 ) asserted that today direct labor cost is frequently less than 15 % of the entire cost and overhead cost may show 50 % or more of entire cost. During the same clip period, much unfavorable judgment was raised that traditional cost accounting has failed to fix progress, related, seasonably, and highly accurate information for bettering direction determinations. To get the better of the failing of traditional cost accounting, several direction accounting inventions were introduced during the 1980s and 1990s.

Activity Based costing ( ABC ) is a new type of cost accounting system and it is one of the chief cost and direction accounting invention systems in the 20th century ( Shields, 1995 ; Anderson, 1995 ; Gosselin, 1997 ; Askarany et al. , 2007 ) . Bjornenak ( 1997 ) believed that one of the most of import modern-day accounting inventions is activity-based bing. Gosselin ( 1997 ) claimed that ABC is one of the most of import cost accounting inventions of the 20th century.

The chief different between ABC and TCA is related to the manner of delegating overhead cost to merchandise. ABC provides more elaborate trailing and differential assignment of overhead costs, creates more costs pools, and provides more accurate merchandise costs. Another difference is in the measuring of the constituent of cost. TCA measures the cost based on three constituents including: direct stuff, direct labor, and overhead but in the ABC system, the cost of merchandises includes activities.

Krumwiede ( 1998 ) defined activity-based costing ( ABC ) as a bing methodological analysis that allocates costs to single activities based on more than one cost allocated base. The current survey efforts to foretell and prove the influence of certain contextual factors on the execution phases of activity-based costing ( ABC ) among Persian fabrication houses.

Activity based costing in this survey is referred to as an invention and ABC is considered as an administrative invention ( as compared to a proficient invention ) . However, the current survey follows the theory that is used by most of the ABC acceptance research, which is named the theory of organisational acceptance of invention or invention diffusion theory. This theory is a widely accepted theoretical footing for analyzing ABC execution ( Anderson, 1995 ; Innes & A ; Mitchell, 1995 ; Gosselin, 1997 ; Innes et al. , 2000 ; Brown et al. , 2004 ; Pierce, 2004 ; Al-Omir & A ; Drury, 2007 ) .

Since the outgrowth of activity-based costing ( ABC ) , it has received a great trade of attending as a cost direction invention which provides more accurate merchandise costs information than the traditional cost system ( e.g. Kiani and Sangeladjiai 2003 ; Krumwiede, 1998 ) . However, the bing literature shows that despite the claimed benefits of utilizing activity-based costing ; the degree of execution of this system is still lower than the traditional 1. Gosselin ( 1997 ) describes this fact as the “ ABC paradox ” . He asserted that it seems a spread exists between the great involvement of direction comptrollers in utilizing ABC and the figure of organisations that have really implemented it. In Iran, for illustration, Tabrizi ( 1999 ) surveyed the CFOs of 290 fabrication houses and found that a few Persian makers adopted ABC to cipher merchandise costs.

Hence, the chief aim of this survey is to analyze how certain contextual factors include information engineering, merchandise diverseness, overhead degree, perceived environmental uncertainness, competition, and concern scheme influence the execution phases of activity-based costing ( ABC ) among the Persian fabrication houses.

2. Literature Reappraisal

2.1 ABC execution procedure

Activity-based costing is a new type of cost accounting system and it is an invention in a house ‘s cost information system ( Shields 1995 ; Anderson 1995 ) . Askarany et Al. ( 2007 ) identified an invention as an thought, pattern, or object that is perceived as new by an person or other unit of acceptance. Cooper and Zmud ( 1990 ) provided grounds from the information engineering ( IT ) execution, organisational alteration, and engineering diffusion literature and developed it into an IT invention diffusion theoretical account. In Cooper and Zmud ‘s theoretical account, alteration occurs in phases and five major contextual facA­tors influence the phases. These five classs factors included single features, organisational factors, technological factors, the undertaking features, and environmental factors.

Anderson ( 1995 ) performed a really thorough instance survey of ABC acceptance at General Motors ( GM ) . She used Cooper and Zmud ‘s phase theoretical account as a construction for depicting the execution of ABC and finds grounds back uping the theoretical theoretical account. Her theoretical theoretical account included 2 parts: it foremost examines the phases houses go through in ABC execution and so considers the impact of a selected scope of factors through these phases of ABC execution.

2.2. Framing the execution procedure: Phases of execution

Harmonizing to invention diffusion theory alteration occurs in phases. Cooper and Zmud ( 1990 ) established a six-stage theoretical account of organisational alteration. Anderson ( 1995 ) adopted the Cooper and Zmud phase theoretical account and many ABC research workers followed her theoretical account. Some research theoretical accounts in ABC and IT stages relevant are summarized in table 1.

2.3. Explaining the execution procedure: Contextual Factors

Cooper and Zmud ( 1990 ) place five major contextual facA­tors which influence successful transiA­tions between the phases of execution: single features ; organisational factors ; technological factors ; undertaking features ; and environmental factors. Four surveies, Cooper and Zmud ( 1990 ) , Anderson ( 1995 ) , Anderson and Young ( 1999 ) , and Brown et Al. ( 2004 ) , found 50 contextual factors which may act upon the execution procedure.These factors are summarized in Table 2.

2.3.1. Technological factors

It is expected that the technological factors such as: information engineering quality, merchandise diverseness, and degree of operating expense will hold a greater impact on ABC execution than the other technological factors.

ABC System and Level of Information Technology Quality ( IT )

The literature proposes two conflicting effects for the interaction degree of information engineering with ABC acceptance. Maelah and Nasir Ibrahim ( 2006 ) argued that directors who were satisfied with information provided from the bing system might be loath to put their resources in ABC, and the quality of IT is negatively related to ABC acceptance. Anderson and Young ( 1999 ) found the quality of the inA­formation system is negatively related to the direction ‘s rating of ABC ‘s overall value.

On the other manus, Krumwiede ( 1998 ) and Cagwin and Bouwman ( 2002 ) argued that detailed of operational informations needed for activity analysis and an integrated ABC system needs high degrees of information engineering. An information system supplying elaborate historical informations and easy entree to users may supply much of the driver information needed by ABC. Furthermore, Krumwiede ( 1998 ) found that high quality IT besides appears a necessary status to enable the accomplishment of the last execution phase. Cagwin and Bouwman ( 2002 ) found that there was a positive relationship between information engineering edification and the efficaciousness of ABC. Therefore, it is expected that higher degrees of IT quality may hold a positive impact on the ABC execution phases.

Execution of ABC System and Level of Product Diversity ( DIVER )

Product diverseness relates to the assortment of type and/or volume of merchandises and/or merchandise lines that are manufactured by a house. Gilbert ( 2007 ) argued that the of import factor impacting the acceptance of ABC is the diverseness of merchandises. In high degrees of diverseness of merchandises, traditional cost systems may non accurately allocate disbursals to each merchandise and may falsify the cost of merchandises. Many research workers identified merchandise diverseness as a primary ground why houses need more accurate bing systems such as ABC ( e. g. Bjornenak 1997 ; Clarke et al. , 1999 ; Brown et al. , 2004 ) .Therefore, it is expected that higher degrees of merchandise diverseness will be positively associA­ated with the execution of ABC.

Execution of ABC System and Level of Overheads ( OVER )

The early published ABC literature argued that operating expenses were going an progressively larger constituent of merchandise cost, for illustration, Chen ( 1996 ) found that overhead costs represent 50 per cent while direct labor cost is every bit low as 5 per cent of the entire fabrication cost. Because of the failing of the traditional costing system to apportion operating expenses accurately, higher degrees of overA­heads is one of the primary grounds for altering the traditional costing system to new systems such as ABC. Many research workers found that higher degrees of fabricating overhead disbursals evidently pushed the houses to follow more accurate bing systems such as ABC ( Narong 2009 ; Xiong et al. , 2008 ; Clarke et al. , 1999 ; Brown et al. , 2004 ) . Cooper and Kaplan ( 1991 ) argues that the overhead allotment system distorts the cost in traditional costing systems. Therefore, it is expected that the degrees of operating expenses will be positively associated with the execution of ABC.

2.3.2. ABC and Environmental Factors

Krumwiede ( 1998 ) defined environmental factors as phenomena external to the organisation that may act upon its direction accounting systems. This survey will concentrate on three environmental factors: degree of competition, concern scheme and perceived environmental uncertainness. These three factors were chosen because they are closely related to the possible benefits of ABC execution.

Execution of ABC System and Competition ( COMPT )

Degree of competition refers to the grade of competition a house faces in a peculiar market. Several surveies have examined the relationship between the strength of competition ABC acceptance ( e.g. , Mia and Clarke, 1999 ; Dekker and Smidt, 2003 ; Al-Omiri and Drury, 2007 ) . Cagwin and Bouwman ( 2002 ) showed that non-competitive state of affairss such as a monopoly can take to the usage of traditional cost accounting instead than ABC. Bjornenak ( 1997 ) found that competition has a positive consequence on ABC acceptance. Johnson and Kaplan ( 1987 ) believed that traditional cost accounting systems are disused in the new environment described by intensive competition. From this suggestion, it is expected that Level of competition has a positive consequence on ABC execution phase.

Execution of ABC System and Business Strategy ( STRA )

Many research workers believed that houses will put more accent on peculiar accounting techniques or information, depending on which scheme they adopt. ( e.g. Bhimani et al. , 2005 ; Jusoh et al. , 2006 ) . Bhimani et Al. ( 2005 ) asserted that scheme plays a cardinal function in the diffusion procedure for invention. This survey applied the Miles and Snow ( 1978 ) typology scheme. Miles and Snow ‘s typology identified four strategic types of organisations harmonizing to the rate at which they change their merchandises and markets: prospectors ; guardians ; analysers ; reactors ( Snow and Hrebiniak, 1980 ; Gosselin, 1997 ) . The cardinal difference among these types is the rate of alteration in the organisational sphere. Gosselin ( 1997 ) believed that Miles and Snow ‘s typology is more appropriate for analyzing the acceptance of ABC as an invention in direction accounting systems. Miles and Snow ‘s typology has been tested in several surveies in ABC acceptance ( e.g. Gosselin, 1997 ; Frey and Gordon, 1999 ; Bhimani et al. , 2005 ) . It is expected that from Miles and Snow ‘s typology of scheme, prospectors are more likely to be at higher phases of ABC execution phases.

ABC System and Perceived Environmental Uncertainty ( PEU )

Perceived environmental uncertainness ( PEU ) is an of import contextual variable in accounting information system and direction information system design ( Fisher, 1996 ) . The construct has besides been conducted as a variable in direction accounting systems ( MAS ) ( e.g. Gul, 1991 ; Lat and Hassel 1998 ; Jusoh, 2008 ) and ABC ( e.g. Anderson, 1995 ; Gosselin, 1997 ) . Anderson ( 1995 ) found PEU had a negative consequence on the two first execution phases of ABC. Gosselin ( 1997 ) found that competitory scheme related to ABC acceptance and competitory scheme has three constituents: environmental uncertainness, merchandise diverseness, production procedure complexness. On the other manus, Iran ‘s economic system has been badly disrupted by old ages of uncertainness environing economic activities. Samimi and Motameni ( 2009 ) found grounds that high degrees of rising prices lead to economic activities to higher uncertainness in Iran. In current survey overall mean mark for PEU is more than 3.0, proposing that Iran ‘s environment is rather unpredictable. In these conditions, it is expected that the sensed environmental uncertainness plays an of import function in the execution phases of ABC in Iran.

2.3.3. Execution of ABC System and Firm Size ( SIZE ) as Control variable

The size of the respondents ‘ houses is measured by the degree of one-year gross revenues gross and it consider as a control variable. The literature has suggested that there is a positive relationship between house size and ABC. Many research workers found grounds that there is a relationship between ABC execution and SIZE as a control variable ( Cagwin and Bouwman, 2002 ; Kruimwiede, 1998 ; Banker et al. , 2008 ) . Krumwiede ( 1998 ) found that SIZE was a important control variable in the acceptance analysis, but it did non look to be important for extract analysis. Bjornenak ( 1997 ) believed that big houses have the needed resources, such as clip, and forces to finance the substructure and, hence, are more capable of following ABC.

H1: The consequence of the contextual factors ( degree of information engineering quality, degree of merchandise diverseness, degree of operating expenses, perceived environmental uncertainness, degree of competition and concern scheme ) alteration in ABC execution phases.

3. Research method

3.1. Data Collection Method

Data was collected from a mail-clad questionnaire study. Krumwiede ( 1998 ) asserted that because most of the informations needed for statistical analysis was non available from other beginnings, a study instrument is merely manner to roll up the sum of cross-sectional information. Gosselin ( 1997 ) introduced two grounds for choosing the appraising method including: First, the information needed for the research was non available from archival beginnings. Second, other informations aggregation techniques would be excessively inefficient.

3.2. Sample and Questionnaire Design

The sampling houses for the study method are fabricating houses listed on the Tehran Stock Exchange ( TSE ) . The TSE opened inA February 1967. Today, the TSE has evolved into turning market place where investor trade securities of over 450 companies. Furthermore, there are three grounds to take companies listed on the Tehran Stock Exchange. First, these companies are in-between and big sized houses that should hold greater resources available for investing in new systems, such as ABC. Second, the informations about the houses is easy available from the Tehran Stock Exchange database. Third, based on the demand for the company to be listed on the TSE, the usage of a cost accounting system is mandatory. The questionnaire in this survey was foremost constructed in English. Sing that people in Iran speak Persian as their first linguistic communication, a interlingual rendition of the questionnaire was required. Sekaran et Al. ( 2000 ) stated that “ it is of import to guarantee that the interlingual rendition of the instrument to local linguistic communication is tantamount to the original linguistic communication ” . In the current survey, to interpret the study instrument the dual interlingual rendition method was applied in two phases.

3.3. Variable Measurement

3.3.1. ABC Implementation phases

Table 3 outlined the phases of ABC execution used in the present survey, which is adopted from Krumwiede and Suessmair ( 2005 ) . They used this theoretical account in a survey for proving the factors that affect the acceptance, extract, and accomplishment of high degrees of German cost accounting method ( GPK ) execution. They believed that because both GPK and ABC are more sophisticated bing systems with higher execution and care costs than simpler systems, they can be shared in many of the execution issues. Besides, they indicated that, in many ways, the consequences of their survey were similar to what Krumwiede ( 1998 ) had found with ABC.

3.3.2. Contextual Variables

Information Technology Quality ( IT )

The inquiry sing information engineering quality was adopted from Krumwiede ( 1998 ) . The measurings included five statements and asked the respondents to bespeak the degree of understanding to each statement. To mensurate the extent of understanding with the statements, a five-point Likert graduated table was used from Strongly Disagree to Strongly Agree. The mean of five points was calculated for the IT variable.

Product Diversity ( DIVER )

Degree of merchandise diverseness was measured by an instrument developed by Khalid ( 2005 ) . With this instrument, houses were classified into five uninterrupted groups based on the figure of merchandises. These groups included: 1 = less than 5 merchandises, 2 = five to ten, 3 = eleven to twenty merchandises, 4 = 21 to fifty merchandises and 5 = more 50 merchandises.

Overheads ( OVER )

Degree of operating expenses was measured by an instrument developed by Krumwiede ( 1998 ) . This inquiry was involved with the house ‘s cost construction and mensural constituents of cost including direct stuff, direct labor, and production operating expenses. Then the per centum of operating expenses was calculated and applied as a measuring. Firms were classified into five uninterrupted groups based on the per centum of operating expenses. The degree of overhead groups included: 1 = less than 14 per centum, 2 = 14 per centum to 19 per centum, 3 = 20 per centum to 24 per centum, 4 = 25 per centum to 29 per centum, and 5 = more than 29 per centum.

Perceived Environmental Uncertainty ( PEU )

With Iran economic conditions efforts were made to happen a perfect instrument to cover more dimensions of PEU. Questions sing PEU were adopted from Jusoh ( 2008 ) . In this instrument, Jusoh ( 2008 ) focused on mensurating the respondents ‘ perceptual experiences of the predictability of seven facets which included their organisation ‘s providers, rivals, clients, financial/capital markets, authorities ordinances, labour brotherhoods, and economic sciences, politics/technology. All of the points were measured on a five-point Likert-type graduated table ( changing from “ extremely predictable ” to “ extremely unpredictable ” ) . The mean of the constituents served as the overall sensed environmental uncertainness mark for a house.

Competition ( COMPT )

Degree of competition refers to the grade of competition a house faces in a peculiar market. In this survey, a individual point index was used for the measuring of the degree of competition. Level of competition was assessed utilizing the figure of rivals. This measuring was developed from Cohen et Al. ( 2005 ) . This measuring used five- places of degree competition from 1 to 5 ( 1 = Not rivals, 2 = one to three,

3 = four to ten, 4 = 10 to twenty rivals, and 5 = more than 20 rivals ) .

Business Strategy ( STRA )

This survey examined the concern scheme types proposed by Miles and Snow ( 1978 ) . This typology identified four strategic types of organisations harmonizing to the rate of alteration of merchandises and markets: prospectors ; guardians ; analysers ; reactors. The inquiry sing concern scheme was adopted from Jusoh and Parnell ( 2008 ) .This instrument included 48 points in 12 inquiries. Each inquiry consists of four statements each of which was related to each possible scheme type. Respondents were asked to bespeak understanding or dissension with each statement refering their organisation by utilizing a five-point Likert graduated table including: from strongly differ to strongly hold. Business scheme was operated by taking the mean mark across the 12 points in four strategic types. Then, for each house the grade of the mean value which was classified into four strategic types was compared. The highest value indicated which house emphasizes a given scheme.

3.4. Validity and Factor Analysis

In the current survey based on Sekaran et Al. ( 2000 ) suggestion three of import types of cogency were conducted including face cogency, content cogency and factorial cogency. For face cogency, a pre- testing was conducted to 30 single fiscal directors for lucidity and significance. Content cogency was established by a reappraisal of the instrument by 10 adept judgements consisting experient comptrollers and faculty members. This survey did non try to look at the dimensions of concern scheme, therefore factor analysis was non employed for the scheme points. For five points of ( IT ) factor analyses was conducted but merely one factor was extracted. The cumulative per centum of discrepancy for this factor was more than 85 % .

For perceived environmental uncertainness ( PEU ) a collateral factor analysis is besides applied. Of the 28 points of PEU, three points have factor burden of less than the 0.50 and one point has high burdens in more than one factor. This factor lading analysis suggests that 4 points should be deleted from the analysis. Furthermore, the Scree Plot form suggested three factors with characteristic root of a square matrixs transcending 1.00 and covering a sum of 62.47 % of discrepancy.

From this analysis three constituent factors were extracted. Factor one included 10 points including: authorities policies sing fiscal patterns, labour Torahs, selling, and accounting processs, action of labor brotherhood sing alterations in rewards, hours, and working conditions, brotherhood security, grudge processs, alterations in the economic system, alterations in fabrication engineering, and alterations in scientific finds. Factor one which covered 43.20 % of discrepancy were combined and named “ sensed environmental uncertainty-economic ( PEU-ECO ) .Second dimension of PEU included 11 points including: for providers of natural stuff sing monetary value, design, and debut of new stuffs alterations, for rivals sing monetary value, merchandise quality, debut of new merchandises, and competition for work force alterations and for clients sing demand for bing merchandises, demand for new merchandises, and gustatory sensations and penchants alterations. These Items were combined and named “ sensed environmental uncertainness -industrial “ ( PEU-IND ) . Factor 3 included 3 points which covered 7.30 % of discrepancy. Under this factor, the financial/capital markets involvement rate alterations, handiness of recognition alterations, and alterations in fiscal instruments available, were combined and named “ sensed environmental uncertainty-financial ( PEU-FIN ) .

3.5 Dependability

Dependability of the multi-item measuring graduated table in the questionnaire was estimated by utilizing Cronbach ‘s alpha, the grade of internal consistence among points in the multipoint-scaled points in the questionnaire ( Sekaran et al. , 2000 ) . The coefficient alpha varies from 0 to 1 and the value of 0.60 or above indicates satisfactory internal consistence dependability ( Malhotra, 2004 ) . Table 4 nowadayss Cronbach ‘s alpha coefficient of the multi-items.

4. Consequences

4.1. Descriptive Statisticss

Table 5 contains the descriptive statistics for the variables. As shown overall mean mark for PEU is more than 3.0, proposing that Iran ‘s environment is rather unpredictable.

4.2. Hypothesiss Testing

H1 states that the effects of contextual variables in this survey will change harmonizing to the ABC execution phases. This survey used the seven phases implementation theoretical account as proposed by Krumwiede and Suessmair ( 2005 ) ( see Table 3 ) . Datas from this survey reveal that there were no responses for phase 2, 4, and 6. The four staying phases were phases 1, 3, 5, and 7 which are used to find if the effects of the factors vary harmonizing to the phases ( see table 5, Descriptive Statistics ) . For this analysis, three theoretical accounts are interpreted by utilizing binary logit arrested development. Tables 6, 7, and 8, present the consequence of these three double star logit arrested developments theoretical accounts.

The first theoretical account, named panel A, investigated the consequence of contextual factors ( independent variables ) on ABC execution phases where the dependant has two values ( 0 vs. 1 ) . In panel A phase one labeled as 0 and phases 3 or 5 or 7 was recorded as 1. Besides the ABC execution phases, panel Angstrom tests the consequence of contextual variables on traveling from phase one ( Not see to ABC ) to present 3 ( Initiation/evaluating of ABC ) . The 2nd theoretical account, called panel B, in this panel houses are recoded as 0 when they are in phases 1 or 3 and are labeled as 1 when are in phases 5 or 7. Finally, the last theoretical account is called panel C where the houses is recoded as 0 when they are in phases 1 or 3 or 5 and labeled as 1 when they are in phase 7 ( 0 vs. 1 ) . These three double star logits provided grounds that any of the independent variables affect the patterned advance from phases 1 to 3 or from, 3 to 5 or from, 5 to 7 otherwise.

4.3. Findingss for involvement in ABC Enterprises

Panel A trials the consequence of contextual factors on traveling from phase one ( Not see to ABC ) to present 3 ( Initiation/evaluating of ABC ) . The odds ratio exp ( B ) in the binary logits analysis indicates the expected alteration in dependant variable when independent variables change by one unit. For proving the control function for SIZE, 2 Binary logit arrested development theoretical accounts applied including: Binary arrested development without control by the SIZE and with control by the SIZE. After run the theoretical account with SIZE as control variable the SIZE has important consequence on the panel A ( p-values = 0.066 ) and changed the -2 log likeliness value indicated the control function for SIZE. This consequence suggested that the large size houses are more likely to be in phase 3, 5 or 7 than smaller size houses.

As shown in table 6 the consequence of PEU-FIN on panel A is negative and important ( p-value = 0.011, B = – 0.43 ) . The negative B coefficients indicate that if the PEU-FIN increases the chance of to be in phases 3 and above lessenings. The odds ratio exp ( B ) shows that a one-unit addition in the value of PEU-FIN decreases the chance of to be in phases 3 and above from 1 to 0.65. The consequences suggest that houses which face lower PEU-FIN tend to be in phase 3, 5 or 7. As explained concern scheme is a categorical variable consisting four types of scheme: prospectors ( STRA-P ) ; guardians ( STRA-D ) ; analysers ( STRA-A ) ; and reactors ( STRA-R ) and three silent person variables were used. Reactors ‘ scheme ( STRA-R ) is considered as a mention group. In panel A STRA-A is important at P & lt ; 0.01 ( B = + 1.36 ) which indicated that the STRA-A has a more positive consequence on panel A than STRA-R. The odds ratio exp ( B ) for STRA-A is equal to 3.92 which means the chance of to be in phases 3 and above in houses who are utilizing STRA-A is 3.92 times bigger than STRA-R. These consequences show the analyser houses are more motivated to be in phase 3, 5 or 7.

Findingss for ABC Adoption

Adoption has traditionally been the cardinal event in invention surveies. In this survey adoptive parent houses defines as houses who attain the last four phases. Panel B is a binary logit theoretical account which dependant variable has merely two values, nothing for houses on phase 1 or 3 and one for houses on phases 5 or 7. Therefore, panel B look into the consequence of contextual factors on following ABC. The consequence for panel B shows in table 7. The consequence besides indicated the control function for SIZE in ABC acceptance. This consequence suggested that the large size houses are more likely to entree phases 5 or 7 and to be ABC adoptive parents than smaller size houses. As shown in Table 7 all variables are important for Panel B ( following ABC ) . More treatment about this panel B is presented as follows: IT is important at P & lt ; 0.10, the B parametric quantity for IT is equal to – 0.44. The negative B coefficients indicate negative consequence of IT on ABC acceptance. The odds ratio exp ( B ) is equal to 0.65 ; this parametric quantity indicated that one unit addition in value of IT decreases the chance of acceptance taking topographic point from 1 to 0.65. These consequences suggest that houses without high IT may be more able to be ABC adoptive parents. DIVER has a positive effects on ABC acceptance at P & lt ; 0.01 degree ( b = + 0.61 ) . The odds ratio exp ( B ) is equal to 1.84, this consequence demoing that a one-unit addition in the value of DIVER increases the chance of acceptance go oning from 1 to 1.84. The consequence suggests that houses with a high diverseness of merchandises are more likely to follow the ABC system. OVER has positive and important on ABC acceptance or panel B. ( p-values = 0.002, B = + 0.78 ) . This consequence suggests that houses with high OVER are more likely to follow the ABC system. All three factors of sensed environmental uncertainness ( PEU ) have negative and important consequence on ABC acceptance ( At P & lt ; 0.01 degree ) . The consequence shows perceived environmental uncertainness appears to play a major function in the acceptance of ABC. The consequences suggest that more houses which face lower PEU tend to follow the ABC system. COMPT is important at P & lt ; 0.01 degree ( b = + 0.67 ) . The positive B coefficient indicates that COMPT increases the chance of the ABC acceptance. These consequences suggest that non-competitive state of affairss such as a monopoly can take to the usage traditional cost accounting instead than utilizing ABC. STRA-A has positive and important consequence on ABC acceptance. Adoption consequences show that the analyser houses are more motivated to follow the ABC system.

4.5. Findingss for ABC extract

In this survey, houses were labeled as infusers if they attain stage seven. Some research workers named the extract of ABC as ABC success, while acceptance means using ABC and is a starting point for implementing ABC.Panel C is a binary logit analysis that dependent variable value is zero for houses on phase 1 or 3 or 5 and one for houses on phase 7. Therefore, panel B look into the consequence of contextual factors on extract ABC. The consequence for R panel C is reported in Table 8. As shown, Under the Model Summary, the -2 Log Likelihood statistics is equal to 28.18. The Cox and Snell R2 is equal to 0.14 that can be identified as R2 in a multiple arrested development as demoing goodness of tantrum in the theoretical account. The Nagelkerke R2 parametric quantity is equal to 0.35. The Hosmer and Lemeshow trial was besides conducted to guarantee the goodness of tantrum of the theoretical account. The determination shows non significance of the p-value for Hosmer and Lemeshow ( p-value = 0.676 ) indicating that the predicted theoretical account is non significantly different from ascertained values and theoretical account tantrums good. The consequence for panel C besides indicated the control function for SIZE. This consequence suggested the large size houses are more likely to be in the last phase ( present 7 ) . As shown in Table 8, DIVER, PEU- IND, and STRA-A are important for panel C. The consequences suggest that houses which face higher DIVER and lower PEU-IND tend to be ABC infuser. And the analyser houses are more motivated to entree phase 7.

4.6. Discussion of consequences

H1 states that the effects of contextual variables in this survey will change harmonizing to the ABC execution phases. As the consequence shows, PEU- FIN and STRA-A, are important for panel A ( traveling from phase one: Not see to ABC to present 3: Initiation/evaluating of ABC ) . All variables are important in panel B ( ABC acceptance ) , and DIVER, PEU- IND and STRA-A are important for panel C ( ABC extract ) . The consequences of these three panels are summarized in Table 9. As a shown, of the 8 variables merely 1 variables ( STRA-A ) have the same consequence on the assorted phases. So H1 is partly supported.

As shown, each factor affects the patterned advance from panel A to the others otherwise. Based on the overall findings in this survey, Figure 1 shows the cardinal factors for each of the ABC execution phases. Thus the theoretical account is equal based on the residuary arrested development analysis for back uping the organisational alteration theory. Cooper and Zmud ( 1990 ) believed that alteration occurs in phases and the significance effects of factors might change across the phases.

Not considered

Initiation/evaluating

Used on occasion

Used extensively

STRA-A ( + ) PEU-IND ( – )

COMPT ( + ) DIVER ( + ) OVER ( + ) STRA-A ( + ) PEU-IND ( – ) PEU-FIN ( – )

PEU-ECO ( – ) IT ( – )

DIVER ( + ) PEU-IND ( – )

STER-A ( + )

Figure 1: Cardinal Factors for ABC Implementation Stages

5. Decisions

In the current survey test the effects of several contextual factors on the execution of ABC. These contextual factors were classified as technological, environmental factors. Three theoretical accounts were developed to capture the consequence of certain factors ( independent variables ) on different phases of ABC. All three theoretical accounts are interpreted by utilizing binary logit arrested development.

The first theoretical account, named panel A. tests the consequence of contextual factors on traveling from phase one ( Not see to ABC ) to present 3 ( Initiation/evaluating of ABC ) . The 2nd theoretical account, called panel B, look into the consequence of contextual factors on following ABC. Finally, the last theoretical account is called panel C investigates the consequence of contextual factors on inculcating ABC.

The findings show that the consequence of certain contextual factors change harmonizing to the ABC execution phases. This determination is consistent with some ABC surveies ( e.g. , Anderson, 1995 ; Krumwiede, 1998 ; Gosselin, 1997 ) which found that the effects of selected factors vary from phase to present. Although they use a different phase theoretical account and different factors, they found the same consequence that different factors are associated with the different phases. Furthermore, this determination is consistent with information systems ( IS ) invention theory which is widely accepted by most of the ABC research workers. The theory suggested that alteration occur in phases and the grade of importance for each contextual factor differs in several ABC execution phases.

This survey found grounds that perceived environmental uncertainness ( PEU ) plays an of import and negative function in the execution phases of ABC. It is besides of import to observe that Iran is confronted with an unpredictable environment. The findings suggest that under unsure conditions, the director does non supply resources for implementing an invention system such as ABC. Furthermore, the consequences suggested that the large size houses are more likely to be at higher phases of ABC execution phases than smaller size houses. Furthermore, interesting consequences to emerge from this survey were: the negative consequence of IT on the acceptance of ABC, and from Miles and Snow ‘s typology of scheme, analysers house are more likely to be at higher phases of ABC execution phases.

Table 1: ABC Implementation Models

Writer, Title

Beginning

Execution phases

Cooper and Zmud ( 1990 ) “ Information Technology Implementation Research: A Technological Diffusion Approach,

MS* ,

Vol.36, pp, 123-139.

( 1 ) Initiation ( 2 ) Adoption

( 3 ) Adaptation ( 4 ) Credence

( 5 ) Routinization ( 6 ) Infusion

Anderson ( 1995 ) ”A model of measuring cost direction system alterations: the instance of activity-based bing execution at General Motors

JMAR* , Vol. 7,

pp.

1-51.

( 1 ) Initiation ( 2 ) Adoption

( 3 ) Adaptation ( 4 ) Credence

Gosselin ( 1997 ) ”The consequence of scheme and organisational construction on the acceptance and execution of activity-based costing ”

AOS* , Vol. 22, No. 2, pp.

105-122

( 1 ) Adopted AM ( 2 ) Adopted AA

( 3 ) Adopted ACA ( 4 ) Adopted ABC

Krumwiede ( 1998 ) ”The execution phases of activity-based costing and the impact of contextual and organizational

factors ”

JMAR* , Vol. 10, pp.

239-277.

( 1 ) Not considered ( 2 ) Initiation/ measuring ( 3 ) Evaluated so rejected ( 4 ) Evaluated and approved for execution ( 5 ) Analysis ( 6 ) Deriving credence ( 7 ) Implemented so abandoned ( 8 ) Restricted Use ( 9 ) Used slightly ( 10 ) Used extensively

Innes et Al. ( 2000 ) ”Activity-based costing in the UK ‘s largest companies: a comparing of 1994 and 1999 study consequences

MAR* , Vol. 11, pp.

349-362.

( 1 ) No consideration of ( 2 ) Rejected after appraisal ( 3 ) Presently sing ( 4 ) Presently utilizing

Joshi ( 2001 ) “ The international diffusion of new direction accounting patterns: the instance of India ”

JIAAT* Vol. 10, pp.58-109.

( 1 ) Low acceptance ( 2 ) Moderate acceptance ( 3 ) High acceptance

Pierce ( 2004 ) “ Activity-Based costing ”

AI* ,

Vol.36,

pp,28-33.

Innes et Al. ( 2000 ) stages theoretical account.

Brown et Al. ( 2004 ) “ Technological and organisational influences on the acceptance of activity-based costing in Australia ”

AAF* ,

Vol. 44

Pp,

329-356.

Krumwiede ( 1998 ) stages theoretical account.

Khalid ( 2005 ) ” Activity-Based Costing in Saudi Arabia ‘s Largest 100 Firms ”

JAABC* ,

Vol. 6, Pp,

285-292.

( 1 ) Never considered ( 2 ) Soon sing ( 3 ) Cull after rating

( 4 ) Abandoned after utilizing ( 5 ) Soon apply.

Cohen et Al. ( 2005 ) ” ABC: adoptive parents, protagonists, deniers and unawares ”

MAJ* , Vol.20, Pp,981-100,

( 1 ) ABC unawares ( 2 ) ABC deniers

( 3 ) ABC protagonists ( 4 ) ABC adoptive parents

Maelah and Ibrahim ( 2006 ) “ Activity Based Costing ( ABC ) Adoption among Manufacturing Organizations – The Case Of Malaysia ”

IJBS* , Vol.7,

Pp,

70-101.

Krumwiede ( 1998 ) phases

*Note:

JMAR: Journal of Management Accounting Research ; MAR: Management Accounting

Research ; AOS: Accounting, Organizations and Society ; MS: Management Science ;

JIAAT: Journal of International Accounting, Auditing and Taxation ; AAF: Accounting and Finance ; AI: Accountancy Ireland ; JAABC: Journal of American Academy of Business, Cambridge. MAJ: Managerial Auditing Journal ; IJBS: International Journal of Business and Society.

Table 2: Factors and ABC Implementation

1-Individual Characteristic

Job term of office

Education

Critical mass

Role engagement

Cosmopolitanism

Disposition to alter

Informal support

Unit professionally orientated

2-Organizational factors

Top direction support

Local direction support

Local brotherhood

support

Vertical distinction

Champion

Advisers

Informal web

Formalization

Size

Other houses following

Fit

Specialization

Internal communications

Formal support in accounting map

Extrinsic wages systems

Centralization

3-Task features

Task uncertainness

Training

Resource adequateness

Job store

Autonomy

Assortment

Duty

Thin production

4-Technological factors

Laterality of operating expenses

Product line complexness

Relevance to determination devising

New application portfolio

Decreasing monetary value

IT quality

Decision utility

Trainability

Relative advantage

Product diverseness

Compatibility

Absorbability

Complexity

Accuracy

5-Environmental factors

Likelihood of

layoffs

External communicant

Inter-organizational dependance

Importance of site to company

Competition

Heterogeneity

Concentration

Growth chances

Scheme

Labor dealingss

Uncertainty

Table 3: Seven Stage Model of Study

Phases

Krumwiede and Suessmair ( 2005 )

The present survey

1

Not considered: GPK has non been earnestly considered. We use either individual or departmental /multiple plant-wide allotment methods merely

Not considered: ABC has non been earnestly considered. We use either individual or departmental / multiple plant-wide allotment methods merely

2

Considered so rejected: GPK has been considered but subsequently rejected as a costing method.

Evaluated so rejected: ABC has been evaluated ( but non implemented ) and was subsequently rejected as a cost assignment/ direction method.

3

Considering: GPK Implementation is possible in the hereafter but has non been approved

Initiation/evaluating: ABC is being

evaluated and execution is possible, but execution has non yet been approved.

4

Implemented so abandoned: GPK was antecedently implemented but is non presently being used.

Implemented so abandoned: ABC was antecedently implemented but is non presently being used.

5

Used on occasion: Occasionally used by non-accounting direction or sections for determination devising.

Used on occasion: Occasionally used by non-accounting direction or sections for determination devising.

6

Used often: Frequently used for direction determination devising ; considered normal portion of information system

Used often: Frequently used for direction determination devising ; considered normal portion of information system

7

Used extensively: Used extensively for direction determination devising ; clear benefits of GPK can be identified.

Used extensively: Used extensively for direction determination devising ; clear benefits of ABC can be identified.

Table 4: Dependability of the Multi-Items

Factor

Alpha

Number of Item

Business scheme: Prospector

0.88

12

Business scheme: Defender

0.81

12

Business scheme: Analyzer

0.85

12

Business scheme: Reactor

0.80

12

Perceived environmental uncertainty-Industrial

0.91

11

Perceived environmental uncertainty-Financial

0.83

3

Perceived environmental uncertainty- Economic

0.94

10

Level of information engineering quality

0.96

5

Table 5: Descriptive Statisticss

Competition position

Frequency

Percentage

Cumulative %

No Rivals

31

16.50

16.50

1-3 Rivals

37

19.70

36.20

4-10 Rivals

37

19.70

55.90

11-20 Rivals

44

23.40

79.30

More than 20 Rivals

39

20.70

100.00

Number of merchandises:

Frequency

Percentage

Cumulative %

Less than 5

41

21.80

21.80

5-10

57

30.30

52.10

11-20

30

16.00

68.10

21-50

28

14.90

83.00

More than 50

32

17.00

100.00

Business Scheme

Frequency

Percentage

Cumulative %

Analyzers

40

21.30

21.30

Defenders

51

27.10

48.40

Prospectors

36

19.10

67.60

Reactors

61

32.40

100.00

Degree of operating expense

Frequency

Percentage

Cumulative %

Less than 14 %

41

21.80

21.80

14 % -19 %

48

25.50

47.30

20 % – 24 %

43

22.90

70.20

25 % – 29 %

31

16.50

86.70

More than 30 %

25

13.30

100.00

Degree of IT

Frequency

Percentage

Cumulative %

1.00-1.99

19

10.10

10.10

2.00-2.99

48

25.53

35.63

3.00-3.99

45

23.93

59.56

4.00.5.00

76

40.44

100.00

ABC Implementation Stages

Frequency

Percentage

Cumulative %

Phase one-Not considered

112

59.58

59.58

Phase Two-Evaluated so rejected

0

0.00

59.58

Stage Three -Initiation/evaluating

43

22.87

82.45

Stage Four -Implemented so abandoned

0

0.00

82.45

Phase Five -Used on occasion

20

10.64

93.09

Phase Six -Used often

0

0.00

93.09

Stage Seven -Used extensively

13

6.91

100.00

Environmental uncertainty- Factors

Minute

Soap

Mean

PEU-ECO

1

5

3.50

PEU-IND

1

5

3.62

PPEU-FIN

1

5

3.39

Table 6: Binary Logistic Result: Panel A Implementation Stages

Factor

B-Estimate

Std.Error

Wald Chi-Square

df

p-value

Exp ( B )

Changeless

– 2.36

0.84

7.96

1

0.005

0.09

Information technology

-0.05

0.14

0.15

1

0.703

0.95

Diver

0.19

0.12

2.60

1

0.106

1.21

OVER

0.07

0.13

0.33

1

0.568

1.08

PEU-IND

– 0.03

0.17

0.05

1

0.830

0.96

PEU- FIN

– 0.43

0.17

6.50

1

0.011

0.65

PEU-ECO

– 0.08

0.16

0.24

1

0.626

0.92

COMPT

0.13

0.12

1.17

1

0.280

1.14

STRA-A

1.36

0.46

8.99

1

0.003

3.92

STRA-D

0.15

0.42

0.13

1

0.717

1.16

STRA-P

– 0.52

0.52

1.04

1

0.307

0.59

Size

0.24

0.13

3.37

1

0.066

1.27

Trial

Wald Chi Square

df

P

Omnibus trial of theoretical account coefficients

29.77

11

0.02

Goodness-of-fit trial ( Hasmer & A ; Lemeshow )

10.02

550

0.264

Note: -2 log likelihood=223.91, Cox and Snell R2 = 0.15, Nagelkerke R2 =0.20

Table 7: Binary Logistic Result: Panel B Implementation Stages

Factor

B-Estimate

Std.Error

Wald Chi-Square

df

p-value

Exp ( B )

Changeless

– 11.70

2.10

29.52

1

0.001

0.00

Information technology

– 0.44

0.24

3.09

1

0.078

0.65

Diver

0.61

0.23

7.07

1

0.008

1.84

OVER

0.78

0.25

9.33

1

0.002

2.19

PEU-IND

-0.98

0.33

8.83

1

0.003

0.37

PEU- FIN

– 0.91

0.30

8.83

1

0.003

0.40

PEU-ECO

– 0.60

0.28

4.39

1

0.036

0.55

COMPT

0.67

0.22

8.69

1

0.003

1.96

STRA-A

3.45

0.91

14.15

1

0.001

31.67

STRA-D

0.84

0.95

0.77

1

0.377

2.33

STRA-P

0.91

0.85

1.15

1

0.283

2.49

Size

0.95

0.26

12.77

1

0.001

2.59

Trial

Wald Chi Square

df

P

Omnibus trial of theoretical account coefficients

89.89

11

0.001

Goodness-of-fit trial ( Hasmer & A ; Lemeshow )

10.46

8

0.230

Note: -2 log likelihood=84.78, Cox and Snell R2 = 0.38, Nagelkerke R2 =0.63

Table 8: Binary Logistic Result: Panel C Implementation Stages

Factor

B-Estimate

Std.Error

Wald Chi-Square

df

p-value

Exp ( B )

Changeless

-7.95

2.10

14.35

1

0.000

0.00

Information technology

-0.29

0.31

0.86

1

0.352

0.74

Diver

0.50

0.26

3.81

1

0.051

1.66

OVER

0.09

0.27

0.10

1

0.744

1.09

PEU-IND

– 0.68

0.36

3.57

1

0.059

0.50

PEU- FIN

-0.10

0.35

0.09

1

0.764

0.90

PEU-ECO

-0.09

0.31

0.09

1

0.757

0.90

COMPT

0.10

0.24

0.18

1

0.665

1.11

STRA-A

1.71

0.93

3.38

1

0.066

5.56

STRA-D

0.44

1.12

0.15

1

0.696

1.55

STRA-P

0.49

1.03

0.22

1

0.636

1.63

Size

0.86

0.32

7.28

1

0.007

2.37

Trial

Wald Chi Square

df

P

Omnibus trial of theoretical account coefficients

28.19

11

0.003

Goodness-of-fit trial ( Hasmer & A ; Lemeshow )

4.74

8

0.676

Model sum-up: -2 log likelihood=66.35, Cox and Snell R2 = 0.14, Nagelkerke R2 =0.35

Table 9: The Roles of Predictors on ABC Implementation Stages

Panels

Independent variables ( Forecasters )

Information technology

Diver

OVER

PEU-IND

PEU-FIN

PEU-ECO

COMPET

STRA-A

A

N.S

N.S

N.S

N.S

N.S

N.S

+

Bacillus

+

+

+

+

C

N.S

+

N.S

N.S

N.S

N.S

+

* N.S: It is non important.