Impact of Automation on Cost Accounting

Although production methods have been highly developed and now make use of very advanced technologies, management accounting systems have lagged behind. Before introducing new cost accounting systems, however, it is necessary to have a clear view of practice. The empirical results described in this paper constitute the output of a large scale research project into manufacturing companies located in Belgium. Extensive data on cost accounting systems were gathered through the use of a questionnaire. There is an indication that technological change has an impact on both cost composition and cost structure. The widespread hypothesis that the proportion of direct labour cost within total costs is lower in companies with automated production process is confirmed. As to the traceability of costs, there is a shift from indirect costs towards direct costs in companies with automated production. However, it appears that only a few companies are concerned about the efficiency of their cost calculation on a permanent basis. Moreover, no differences could be detected in the use of cost accounting in decision making between companies with automated production and those with mechanical production.     

The quality improvement customers didn't want

Is investing in new technology always the right choice for a company and its customers? Allan Moulter, the CEO of Quality Care, isn't sure he wants to invest in the computerized reception system that consultant Jack Zadow has outlined for him. But in this HBR case study, the argument Zadow makes is impossible to ignore. Quality Care's rivals have invested in similar systems or are planning to do so. The new system promises to take care of routine busywork, freeing staff up for other interactions with patients. It seems as if the competition hasn't even cut staff and is counting on increased customer retention to pay for the investment. And yet, Quality Care's surveys of its own customers show that they prefer the human touch when checking in. How would customers feel if the first ?person? they met when they came in the door turned out to be a machine? Moulter prides himself on his responsiveness to customers. And with 86% of Quality Care's customers either satisfied or completely satisfied, aren't things fine as they are? Has Moulter considered all the facets of his predicament? How will Quality Care's staff be affected by a decision one way or another? What about the costs of upgrading the system? Can Quality Care maintain its standing without going high-tech? Would customers rebel when confronted with the proposed reception area or would they appreciate the increased efficiency? Six experts weigh the costs and benefits of technology in a service industry.     

CRM done right

Disappointed by the high costs and elusive benefits, early adopters of customer relationship management systems came, in the post dot-com era, to view the technology as just another overhyped IT investment whose initial promise would never be fulfilled. But this year, something unexpected is happening. System sales are rising, and executives are reporting satisfaction with their CRM investments. What's changed? A wide range of companies are successfully taking a pragmatic, disciplined approach to CRM. Rather than use it to transform entire businesses, they've directed their investments toward solving clearly defined problems within their customer relationship cycle. The authors have distilled the experiences of these CRM leaders into four questions that all companies should ask themselves as they launch their own CRM initiatives: Is the problem strategic? Is the system focused on the pain point? Do we need perfect data? What's the right way to expand an initial implementation? The questions reflect a new realism about when and how to deploy CRM to best advantage. Understanding that highly accurate and timely data are not required everywhere in their businesses, CRM leaders have tailored their real-time initiatives to those customer relationships that can be significantly enhanced by "perfect" information. Once they've succeeded with their first targeted CRM project, they can use it as a springboard for solving additional problems. CRM, in other words, is coming to resemble any other valuable management tool, and the keys to successful implementation are also becoming familiar: strong executive and business-unit leadership, careful strategic planning, clear performance measures, and a coordinated program that combines organizational and process changes with the application of new technology.     

Custom fabric ventures: An instructional resource in job costing for the introductory managerial accounting course

Job costing is a core foundational concept in the introductory managerial accounting course. The purpose of this instructional resource (IR) is to provide a thorough hands-on, active learning resource that will allow introductory students to experience a full set of accounting and management activities necessary to produce a job and assign production costs to it. For example, the IR requires students to analyze overhead costs, determine the optimal job size, schedule production, calculate the amount of materials to purchase, complete material requisitions, update raw materials records, analyze labor time records, complete a job cost record and address critical thinking questions. The IR was developed for use in a “flipped classroom” in which students work under the guidance of the instructor, but could alternatively be assigned as an unsupervised out-of-class assignment or on-line project. Since the IR was specifically developed as a learning tool for novice introductory managerial accounting students, adequate guidance is provided throughout the activity. However, to add realism and challenge students to think beyond the confines of simple mechanics, management and accounting issues are seeded throughout. Student feedback indicates that the IR not only helps students learn how a job costing system operates, but also helps students become aware of management decisions and accounting issues that impact the costs assigned to a job.     

The Credibility Of Australian Financial Reporting: Are The Co-regulation Arrangements Working?

Credible financial reporting is hard to achieve without an accounting regulatory system. In Australia a system of co-regulation has evolved, based on collaboration between the federal government and its agencies and the accounting profession. Compared with overseas systems, the Australian approach to regulation has unique as well as derivative features. Is the system working effectively for the delivery of dependable, internationally comparable financial reports that make reporting entities transparent and enhance investor confidence?     

Public Policy and Accounting Research: What Is to Be Done?

Abstract

Singleton-Green [2010. The communication gap: Why doesn't accounting research make a greater contribution to debates on accounting policy? Accounting in Europe, 7(2), 129–145] argues that a communication gap between researchers and those involved in public debates on accounting problems significantly reduces the impact of accounting research. A new ICAEW report, The Effects of Mandatory IFRS Adoption in the EU: a Review of Empirical Research, tries to bridge the communication gap on the subject that it covers. The report found not only a significant amount of relevant research, but also that its usefulness was limited in various ways. The paper makes a number of recommendations to researchers: they should point out any biases in the data they use, address some issues through field work, not assume that surrounding institutions are unchanged, be careful to understand the specific features of the countries they cover, investigate differences in previous research, and state the economic significance of their findings. The paper also makes recommendations for non-academic participants in public policy debates, including: they should actively promote relevant research, help researchers get access to information, and help ensure that researchers have the incentives to do what is needed to benefit public policy.     

Total efficient risk priority number (TERPN): a new method for risk assessment

Safety is one of the most important issues in modern industrial plants and industrial activities. The Safety Engineering role is to ensure acceptable safety levels of production systems, not only to respect local laws and regulations, but also to improve production efficiency and to reduce manufacturing costs. For these reasons, the choice of a proper model for risk assessment is crucial. In this context, the present research aims to propose a new method, called Total Efficient Risk Priority Number (TERPN), able to classify risks and identify corrective actions in order to obtain the highest risk reduction with the lowest cost. The main scope is to suggest a simple, but suitable model for ranking risks in a company, to reach the maximum effectiveness of prevention and protection strategies. The TERPN method is an integration of the popular Failure Mode Effect and Criticality Analysis (FMECA) with other important factors in risk assessment.     

“No accounting for these people”: Shell in Ireland and accounting language

Accounting lays claims to be the language of business: a clear, technical, unambiguous means of communication for decisions on investment and economic development. Accounting concepts have increasingly entered mainstream debate on issues affecting society at large. This makes the fairness and effectiveness of accounting as a mode of communication more important for social justice than ever before. In a contentious development, if the discussion is framed primarily in accounting terms, this may disenfranchise those parties to the dispute whose issues are not readily expressed in the common vocabulary of business. Their concerns may become invisible in the debate. If this happens, then accounting has failed as a means of communication, and that failure is non-neutral in that it favours those whose position is best supported by economic arguments.This paper explores this phenomenon using the case of a dispute between Royal Dutch Shell and a local community in Ireland concerning a gas refinery located in an environmentally sensitive area. The issues in conflict are complex and at times intangible. I explore how the limitations of accounting as a language blinded the protagonists to an understanding of each other's concerns, marginalised the concerns of protestors from the public discourse, shifting power from objectors within the local community to those whose primary concern was the economic exploitation of natural resources. I argue that accounting failed as a mode of communication to progress a resolution of the dispute, and that this failure was both unnecessary, and systematic in its support of economic interests.     

Progenitors of modern management accounting concepts and mensurations in pre-industrial England

Edwards and Newell (1994: 407) noted that 'the application of accounting techniques in business management continues to be a largely unexplored area of business history'. Outcomes of this lack of research and knowledge are simplistic conclusions such as 'accounting systems for managerial decisions and control can be traced back to the origins of hierarchical enterprises in the early nineteenth century' (Johnson and Kaplan, 1987). In contrast, the case and conclusion presented in this paper hold that innovative measurements for decisions and control attributed to industrial revolution managers were adaptations of concepts used by auditors, stewards and bailiffs who, on behalf of lords of the manor, controlled agricultural activities on landed estates. In addition, evidence is presented which shows that concepts of production standards and standard costs were used in pre-industrial England to control the manufacture and sale of bread. Much of the evidence used to build the case was drawn from translations of medieval management, accounting and legal treatises and is presented under six headings. In each of the six sections evidence of the use of a progenitor of a modern management accounting concept and associated mensuration (action of measurement) is presented and discussed. The headings are: production capacity; production standards; standard costs; cost allocation; performance analysis; and relevant costs.     

ACCOUNTING FOR INSECURITY

This paper argues that modern systems of budgetary control are implicated in the exploitation and production of insecure forms of employment. The flexibility of direct labour is assumed at a very basic level in some of the core techniques of costing and budgetary control. Previous historical studies of the development of these forms of control, moreover, have shown that they were used to shift the costs of economic fluctuation from capital to labour as well as to encourage the efficient utilisation of human effort. In the light of these observations, it is to be expected that the use of budgetary targets which incorporate direct labour costs will: (1) be more prevalent where the workers are least able to resist the various forms of “flexibility”; and (2) encourage recourse to redundancies where the performance of business units within a company falls below expectation. The paper then tests these hypotheses against data from a recent survey of industrial relations practice in large UK companies. The results show, firstly, that there is a strong and positive association between the proportions of females and part-timers within the workforce and the use of unit labour costs and the direct labour cost/sales ratio as performance targets. Secondly, the use of return-on-investment (R.O.I.) targets is associated with the declaration of redundancies in business units which have failed to perform satisfactorily. For those to whom insecurity of employment constitutes a social problem rather than a managerial convenience to be celebrated as “flexibility”, these findings indicate that the accounting control systems typical of the modern company constitute part of the problem. The achievement of the long-standing trade union aim of security of income and employment will depend, in part, on changing these systems of control.     

Evaluating the Implementation of a Mandatory Dual Reporting System: The Case of Indonesian Local Government

Informative and transparent financial information in the public sector is crucial for improving public sector management and eradicating corruption. Given this, Indonesia has reformed its public sector accounting, reporting and accountability systems by implementing a dual reporting system known as ‘cash towards accrual’, following similar reforms in developed countries. Drawing on the experience of five local governments (districts) in Indonesia, this study finds that the implementation of the dual reporting system has helped local governments to produce transparent and informative reports. However, the accrual‐based contents of the dual reports produced by the new reporting system are underused for decision making. In addition, there has been a significant increase in costs associated with the implementation of the new accounting regime in the jurisdictions studied. The study also finds that the ability of the users to use information generated by the new accounting system is more important than just a legal and mandatory requirement to use the new system.     

An investigation of the emerging trend towards a laptop requirement for accounting majors in the USA

The dramatic technological revolution that has taken place in the last decade makes it imperative for students to emerge from their undergraduate education technologically proficient, comfortable with technology, and ready to pursue their chosen fields. Computers, like pencils and notebooks, have become an integral part of the college experience. In the last five years there has been an emerging national trend to require laptop computers for accounting majors as well as in other disciplines. A laptop computer requirement can be extremely beneficial to accounting majors. While courses in accounting information systems have typically required students to gain hands-on experience using software such as Microsoft Access, Peachtree, QuickBooks, Great Plains and others, incorporation of technology into the other accounting courses has generally been more limited and has varied from programme to programme. The implementation of a laptop requirement necessitates a thorough analysis of the entire accounting curriculum and should result in the incorporation of information technology in all accounting courses. This also requires that faculty become technologically proficient and thus able to incorporate the laptop use into the curriculum so that the value of the laptop computer is realized. This paper: (1) examines the laptop requirement trend for accounting majors and the related aspects/characteristics in a sample of US institutions accredited and not accredited by AACSB International, and (2) provides a case study of the implementation of a laptop requirement for undergraduate accounting majors in an AACSB-accredited institution and feedback based on student evaluations of the requirement over a two-year period.     

寻求政府会计改革的稳定形式

中国目前的制度环境使得政府会计改革刻不容缓。政府会计在公共产权的界定和保护中处于最基础、最重要和最具操作性的地位,其改革涉及政府部门既得产权利益的调整,改革成本与改革收益并存,须稳步推进。政府会计改革的稳定形式即为改革成本最低的改革方案,它决定了改革的过渡性与渐进性;最优政府会计改革速度取决于改革实施成本与摩擦成本的权衡。据此,本文从政府预算会计与财务会计的协调、改革过程和"二元"结构准则体系维度探寻了政府会计改革稳定形式的实施方案。     

关于建立国家统一会计核算制度的若干问题

建立国家统一会计核算制度非常必要。在建立过程中 ,有两个基本问题需要澄清 ,即会计标准的表现形式不是唯一的、会计标准也不存在绝对的优劣之分 ;有五个基本关系需要处理好 ,即会计核算制度与会计准则的关系、会计核算制度与税法的关系、会计核算制度与财务制度的关系、会计核算制度“新”和“旧”的关系、会计核算制度与国际会计惯例的关系。此外 ,为建立好国家统一会计核算制度 ,还需要设计好会计核算制度框架     

Does Risk Management Add Value? A Survey of the Evidence

The fact that 92% of the world's 500 largest companies recently reported using derivatives suggests that corporate managers believe financial risk management can increase shareholder value. Surveys of finance academics indicate that they too believe that corporate risk management is, on the whole, a valueadding activity. This article provides an overview of almost 30 years of broadbased, stock‐market‐oriented academic studies that address one or more of the following questions:

• ? Are interest rate, exchange rate, and commodity price risks reflected in stock price movements?
• ? Is volatility in corporate earnings and cash flows related in a systematic way to corporate market values?
• ? Is the corporate use of derivatives associated with reduced risk and higher market values?

The answer to the first question, at least in the case of financial institutions and interest rate risk, is a definite yes; all studies with this focus find that the stock returns of financial firms are clearly sensitive to interest rate changes. The stock returns of industrial companies exhibit no pronounced interest rate exposure (at least as a group), but industrial firms with significant cross‐border revenues and costs show considerable sensitivity to exchange rates (although such sensitivity actually appears to be reduced by the size and geographical diversity of the largest multinationals). What's more, the corporate use of derivatives to hedge interest rate and currency exposures appears to be associated with lower sensitivity of stock returns to interest rate and FX changes. But does the resulting reduction in price sensitivity affect value—and, if so, how? Consistent with a widely cited theory that risk management increases value by limiting the corporate “underinvestment problem,” a number of studies show a correlation between lower cash flow volatility and higher corporate investment and market values. The article also cites a small but growing group of studies that show a strong positive association between derivatives use and stock price performance (typically measured using price‐to‐book ratios). But perhaps the nearest the research comes to establishing causality are two studies—one of companies that hedge FX exposures and another of airlines' hedging of fuel costs—that show that, in industries where hedging with derivatives is common, companies that hedge outperform companies that don't.     

Management accounting innovations for rationalizing the cost of services: The reassessment of cash and accrual accounting

ABSTRACT

Management accounting can be a useful tool in austerity government because it produces information about the costs of public services and can be used for informed decision-making. Spanish local governments are required to submit data on the cost of their services to central government, which publishes this information online. The calculation of costs is based on budgetary cash accounting instead of accrual accounting; therefore cash accounting is being used for decision-making and accrual accounting has no role in this process. This paper critically analyses the innovation from three perspectives: the use assigned to the cost information in the legal framework; the opinion of academics and experts; and the perception of professionals about the usefulness of the information produced with the new system.     

A space for time: accounting and Time Based Management in a high technology company

Time Based Management is often presented as a managerial technology that is useful in all areas of management and possibly one that makes cost accounting useless and perhaps in some situations a direct impediment to management control. In this paper, however, we argue that Time Based Management cannot exist without the construction of a space within which time—as a one-dimensional decision parameter—can function. Here, cost accounting provides some of the mechanisms which seal off a production space, free it from external uncertainties and disruptions and make it possible to manage by time alone.     

The interaction between a standard time incentive payment scheme and a simple accounting information system

Under a standard time incentive payment scheme, workers “manage” their recorded job times. A job cost accounting system allocates labour costs and sometimes overheads on the basis of the recorded job times. By simulating the interaction of two such systems at a medium sized engineering firm, it is found that the direct labour costs for a product could be over-estimated by up to 35%. Further, these over-estimates occur on those products on which the workers earn their highest bonuses and, hence, whose discontinuation could damage industrial relations.     

法务会计与司法会计研究之比较

法务会计是适应市场经济发展需要从英美法系国家引进的;而司法会计是在计划经济背景下,适应司法机关办理贪污案件的需要从大陆法系国家引进的.会计界和法律界从各自的角度对同一问题展开研究,从而产生了法务会计与司法会计,两者之间的区别缘于研究的经济背景和诉讼制度不同.     

The international decentralisation of US commercial aircraft production: implications for US employment and trade

This paper examines the role of industrial offset agreements in the global decentralisation of US commercial aircraft production. Particular attention is given to the manufacturing processes involved in the design and assembly of large passenger jets (100 seats or more). It is argued that the current geography of aircraft production at the global level has been shaped by a new international distribution of input costs and technological capability. Specifically, low-cost producers within several of the newly emerging markets (NEMs) have acquired front-end manufacturing expertise as a direct result of industrial offset contracts and/or other forms of technology transfer (e.g. international joint-ventures, imports of advanced machine tools). We find that the growth of international offset agreements portend the transformation of Boeing from an aircraft manufacturer to a systems integrator. The economic implications of this potential reconfiguration of the US commercial aircraft industry are discussed in the context of several techno-market futures, some of which look rather bleak for US workers in this industry.