Activity Based Costing knowledge: empirical study on small and medium-size enterprises

Abstract

The objective of this paper is to analyze the percentage rate of use and knowledge of activitybased costing (ABC) in small and medium-sized Portuguese enterprises and at the same time searching for the existence of any factors that might explain why this method is not is used among most companies. The collected data allow us to conclude that none of these enterprises uses the ABC and that the majority of respondents did not have any knowledge on the subject. Hierarchical level, age and academic qualifications are the reasons why the knowledge of the ABC is associated to the individual characteristics of people responsible for management accounting.Keywords: Activity-based costing. SMEs (small and medium sized enterprises). Portugal. ResumoO objetivo deste artigo é analisar a taxa percentual de uso e o conhecimento do custeio baseado em atividades (ABC) nas empresas de pequeno e médio porte portuguesas e, ao mesmo tempo pesquisar a existência de quaisquer fatores que poderiam explicar a razão pela qual este método não é usado entre a maioria das empresas. Os dados coletados permitem concluir que nenhuma dessas empresas utiliza o ABC e que a maioria dos entrevistados não têm conhecimento algum sobre o assunto. Nível hierárquico, idade e qualificação acadêmica são as razões pelas quais o conhecimento do ABC está associado às características individuais das pessoas responsáveis pela contabilidade gerencial. Palavras-chave:Custeio baseado em atividades. PME. Portugal

Quality in management accounting: approach by activities in large companies

“…The approach by activities continues to be considered as the most innovative method of products or services valuation (Abdallah and Li, 2008;Arsénio and Machado, 2013;Machado, 2012). Standing apart from the older methods, in which the product cost is influenced by the production volume, the approach by activities calculates the product cost using the number of setups, number of machine hours, number of commands, number of orders, etc.…”

“…Three studies conducted in the same year, but in different countries, showed very close ABC utilization rates: the study of Tomás et al (2008), conducted in Portugal in the 500 largest non-financial companies had a rate of 22%; Kallunki and Silvola (2008) reported an utilization rate of 21% in 500 Finnish companies from various activity sectors; Banker et al (2008) analyzed 27,000 American industrial companies, and found an ABC utilization rate of 20%. After the study of Tomás et al (2008), another research was conducted in Portugal with widely varying results (Machado, 2012). This study, conducted in small and medium industrial companies, classified by a public institute as excellent, reported that none of the companies surveyed used the ABC.…”

“…This study, conducted in small and medium industrial companies, classified by a public institute as excellent, reported that none of the companies surveyed used the ABC. Machado (2012) also reports that most financial officers do not know this approach. This study follows, in terms of the ABC utilization rate, another study by Arsénio and Machado (2013) in listed Portuguese companies, which reports a utilization rate of 31%.…”

“…Regarding the second group of variables responsible for disseminating the management accounting methods, several authors (Clarke et al, 1999;Cohen et al, 2005;Machado 2012Machado , 2013 have analyzed some financial officers' characteristics such as the educational background, gender and age. Clarke et al, (1999) concluded that the officers' poor educational background is one of the main inhibitors to change in the methods used by the Irish companies.…”

“…continuing this approach to merit the attention of researchers. Thirdly, several authors (Clarke et al, 1999;Cohen et al, 2005;Haldma and Lääts, 2002;Machado 2012Machado , 2013Nunes and Machado, 2014) consider that it is important to know the contingency variables responsible for the dissemination of knowledge on management accounting methods, associated with the company and the financial officers' characteristics. Jha and Nanda (2013) concluded that they are large organizations that are more concerned with the quality of information.…”