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Factors Influencing the Implementation of Activity-Based Costing: A Study on Malaysian SMEs

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  • Sudhashini Nair
  • Xin Tan

Abstract

Literature has indicated that factors such as--the external environment, cost saving mechanisms, user attitude and company size--may have an effect on the implementation of activity-based costing (ABC). Furthermore, literature has revealed that there is still lack of research on the effect of these factors on the implementation of ABC among small and medium sized enterprises (SMEs) in Malaysia. As such the aim of this research is to test the relationships of these factors on the implementation of ABC among SMEs in Malaysia with the aim of contributing to existing research on the ABC system in the area of management accounting. A total of 200 respondents participated in this research. The results of the study revealed that all four factors; the external environment, cost saving mechanisms, user attitude and company size have significant relationships with the implementation of ABC among SMEs in Malaysia.

Suggested Citation

  • Sudhashini Nair & Xin Tan, 2018. "Factors Influencing the Implementation of Activity-Based Costing: A Study on Malaysian SMEs," International Business Research, Canadian Center of Science and Education, vol. 11(8), pages 133-141, August.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:8:p:133-141
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    References listed on IDEAS

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    1. Trevor Hopper & Mathew Tsamenyi & Shahzad Uddin & Danture Wickramasinghe, 2009. "Management accounting in less developed countries: what is known and needs knowing," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 22(3), pages 469-514, March.
    2. Kamilah Ahmad, 2017. "The Implementation of Management Accounting Practices and its Relationship with Performance in Small and Medium Enterprises," International Review of Management and Marketing, Econjournals, vol. 7(1), pages 342-353.
    3. Anderson, Shannon W. & Young, S. Mark, 1999. "The impact of contextual and process factors on the evaluation of activity-based costing systems," Accounting, Organizations and Society, Elsevier, vol. 24(7), pages 525-559, October.
    4. Sorin Briciu & Sorinel Căpuşneanu, 2010. "Effective Cost Analysis Tools Of The Activity-Based Costing (Abc) Method," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(12), pages 1-2.
    5. Azzouz ELHAMMA & Zhang YI FEI, 2013. "The Relationship between Activity Based Costing, Business Strategy and Performance in Moroccan," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 12(1), pages 22-38, March.
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    Cited by:

    1. Anthony MWILA & Vincent MASAKA & Kaombe TUKUMANA, 2022. "The Impact of the Activity-Based Costing on SMEs’ Financial Performance in Lusaka, Zambia (I)," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 3(6), pages 42-50, June.
    2. Anthony MWILA & Vincent MASAKA & Kaombe TUKUMANA, 2022. "The Impact of the Activity-Based Costing on SMEs’ Financial Performance in Lusaka, Zambia (II)," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 3(7), pages 43-54, July.

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    More about this item

    Keywords

    company size; cost saving mechanisms; implementation of activity based costing; the external environment; user attitude;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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