Saturday, November 22, 2014
English|فارسی
View Articles
Minimize
Feasibility of the Implementation of Activity-Based Costing (ABC) in Operational Budgeting of Government Agencies
Created by host on 8/4/2012 3:02:07 PM


Feasibility of the Implementation of Activity-Based Costing (ABC) in Operational Budgeting of Government Agencies
(A Case Study of Government Agencies of Isfahan Province)

 

D. Foroghi (Ph. D.)[1]*, M. Haghighi Parapari[2], A. Rasaiian[3]

Received: 2011/12/07    Revised: 2012/05/18     Accepted: 2012/05/24

 

Abstract

 

Introduction: This research investigated the factors affecting implementation of activity based costing (ABC) in operational budgeting of government agencies in Isfahan province.

Methods: Being an applied, cross-sectional and descriptive research, this study made use of a questionnaire for gathering data. Governmental agencies that used provincial budget in Isfahan province in 1388 comprised the sample of this study.

Results: The results of the study indicate that with the exception of the ability to evaluate performance, the 50 governmental agencies of Isfahan lack other necessary requirements for the implementation of activity-based costing in operational budgeting, such as personnel’s capabilities, technical ability, authority (Legal authority, procedural authority, organizational authority), and acceptance (political acceptance, managerial acceptance, incentive compatibility).

Conclusion: The conclusion drawn from the current study is that governmental agencies of Isfahan province do not possess the necessary factors for implementation of Activity Based Costing in operational budgeting. Given the fact that new methods of operational budgeting, such as ABC are a must, reforms in budgeting and change of program budgeting into operational budgeting will be difficult if not impossible to perform.

Key words: Activity-Based Costing (ABC), Budget, Governmental Agencies, Operational Budgeting.



[1]. Assistant Professor of Accounting, Isfahan University

[2]. Master of Accounting, Isfahan University

[3]. Master of Accounting, Mazandaran University

*Corresponding author; Email:  d_foroghi@hotmail.com


References

 

Andrews, M. (2004). “Authority, Acceptance, Ability and Performance-Based Budgeting Reforms”. The International Journal of Public Sector Management, Vol. 17, pp. 332-347.

Asaadi, M.; Ebrahimi, M.; and J. Babashahi (2009). “Identifying the Barriers of Implementing Operational Budgeting in Customs of the Islamic Republic of Iran Based on Shah Model.” Second International Conference on Operational Budgeting, Tehran, 7 and 8 May. [In Persian]

Baghoomiyan, R. (2005). “The Application of Activity-Based Costing in Higher Education Institutions”. Journal of Knowledge and Research, No. 3, pp. 24-31, 72-79. [In Persian]

Baird, K. M.; Harrison, G. L.; and R. C. Reeve (2006). “Adoption of Activity Management Practices: a Note on the Extent of Adoption and the Influence of Organizational and Cultural Factors”. Journal of Management Accounting Research, pp. 383-399.

Chongruksut, W. (2004). “The Adoption of Activity-Based Costing in Thailand”. School of Accounting and Finance, Faculty of Business and Law, Victoria University.

Foltin, C. (1999). “State and Local Government Performance: It’s Time to Measure Up!”. The Government Accountants Journal, Vol. 48, No. 1, pp. 6-40.

Hooman, H. A. (1992). Statistical Inference in Behavioral Research. First Edition, Tehran: Diba Printery. [In Persian]

Innes, J. and F. Mitchell (1997). “The Application of Activity-Based Costing in the United Kingdom’s Largest Financial Institutions”. The Service Industries Journal, Vol. 17, Issue. 1, pp. 190-203.

Krumwiede, K. P. (1998). “The Implementation Stages of Activity-Based Costing and the Impact of Contextual and Organisational Factors”. Journal of Management Accounting Research, Vol. 10, pp. 239-277.

Major, M. and T. Hopper (2008). “Managers Divided: Implementing ABC in a Portuguese Telecom-munications Company”. Journal of Management Accounting Research, No. 16, pp. 205-229.

McGill, R. (2001). “Performance Budgeting”. The International Journal of Public Sector Management, Vol. 14 No. 5, pp. 376-390.

Namazi, M. (1999). “An Examination of the Behavioral Implications of Activity- Based Costing in Managerial Accounting”. Iranian Accounting and Auditing Review, Vol. 26 & 27, pp. 71-106. [In Persian]

Namazi, M. (2007). “The Contemporary Challenges of the Management Accounting”. Accountant Monthly, No. 181, pp. 3-12 [In Persian].

Namazi, M. (2008). “Introducing the Second Generation of the Activity-Based Costing (TDABC)”. Accountant Monthly, No. 193 (March), pp. 3-16. [In Persian]

Rajabi, A. (2003). “Designing an Activity-Based Costing System (ABC) to Calculate the Costs of Services in Public Hospitals: A Case Study on Faghihi Shiraz Hospital”. The Seventh National Conference on Accounting, Babolsar: September. [In Persian]

Sarookhani, B. (1997). Culture of Social Sciences. Third Edition, Tehran: Keyhan. [In Persian]

Shah, A. (1998). “Balance, Accountability, and Responsiveness: Lessons about Decentralization”. The World Bank Policy Research Working Paper Series, Paper 2021, World Bank, Washington, DC.

Shields, M. and S. M. Young (1989). “A Behavioral Model for Implementing Cost
Management Systems”. Journal of Cost Management, Winter, pp. 17-27.

Taher Kordi, M. R. (2003). “Using Activity-Based Costing systems (ABC) in the Offshore Oil Company in Iran”. M.A. Thesis, Faculty of Social Sciences and the Humanities of Mazandaran University. [In Persian]

Talaee Zavareh, S. H. (2011). “A Study on the Establishment of Performance-Based Budgeting Using the ABC Activity-Based Costing Technique in the Organization of Educational Research and Planning (OERP) of the Ministry of Education”. Review Quarterly Journal of Educational Innovations, Vol. 9, Issue. 36, pp. 150-172. [In Persian]

Vann, J. M. (2001). Government Uses of Activity-Based Costing. Knowledge Management Solutions, Inc.

Young, R. D. (2003). “Performance Based Budget Systems”. Public Policy and Practice, an Electronic Journal Devoted to Governance and Public Policy in South Carolina, Vol. 2, No. 2, pp. 1-24.

Yousefian, M. (2001). “A Review of the Conditions for Applying Activity-Based Costing System to Cement Companies Listed on Tehran Stock Exchange”. M.A. Thesis, Faculty of Administrative Sciences of Shahid Beheshti University. [In Persian]

 

PDF File Download

print
rating
  Comments

Privacy Statement  |  Terms Of Use
All rights reserved for journal of accounting health