SUMMARY cost systems structure attributes and cost

The article I selected is Cost accounting systems structure and information quality properties: An empirical analysis written by two authors Sandra Cohen and Efrosini Kaimenaki.
This article explains relationship between cost accounting system and information quality properties through a framework of cost system design. More specifically, the study tries to explore whether specific attributes that are indicative of cost accounting systems complexity exert an influential role on the quality of information used for decision making.
The research paper has to provide insight into the associations among cost accounting systems structure characteristics and cost information quality properties. In order to test research hypotheses, used the responses provided by 119 leading manufacturing firms in Greece. The collected data provides supportive evidence that positive associations among cost systems structure attributes and cost information quality properties exist.

More specifically, the cost accounting structure in terms of detailed information existence, variance calculation and frequency in reports preparation exerts an influential role on the relevance, accuracy, timeliness, usability, compatibility, up-to-datedness, reliability, and thoroughness of information for decision-making purposes.

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However, the empirical results of this article indicate that the correlations among the cost accounting systems structure features are statistically significant albeit of medium magnitude. This finding indicates that the cost accounting systems used in practice share heterogeneous attributes. Additionally, as the correlations that exist among the information quality characteristics are also positive and medium magnitude .Cost information quality dimension reflects a different feature in relation to cost information usefulness for decision-making purposes.

Thus we conclude from this article that the research paper presents an integrated model that captures various aspects of the design and use of cost accounting systems. Both researchers present an application of this model in the manufacturing sector and the study indicates that managers recognize the importance of receiving complicated cost information during the decision making process, while at the same time the design of cost systems was found to be a significantly explanatory factor of the quality of cost information.

After thoroughly read this article, the article suggests that this study constrained to manufacturing firms only, limits the ability to generalize the results to other industries. Thus, the study would be repeated in other sectors of the economy, so as to achieve a better generalization of the results. Finally research framework has relied on perceptual measures of both cost systems structure and information quality. Future research could examine the effects of cost system design choices in quantifiable measures of firm performance such as the profitability and cost structure.


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