Title: Examining a moderated-mediation model of the impact of contextual factors on costing system design: new insights from the Saudi manufacturing sector

Authors: Abdulrahman Aljabr

Addresses: School of Business, King Faisal University, P.O. Box 400, 31982, Al-Ahsa, Saudi Arabia

Abstract: An optimal costing system design (CSD), which aligns with business and production environments, contributes towards achieving optimal performance levels and enhancing sustainability. Prior research adopted contingency theory to understand the impacts on optimal CSD, yet produced inconsistent findings, possibly due to the employment of simple models. Hence, this paper aims to examine a moderated-mediation model that combines mediation and moderation analysis to investigate the effect of key contingency factors on CSD. Using questionnaire data collected from 200 Saudi manufacturing business units and analysed using partial least squares structural equation modelling (PLS-SEM), this paper provides interesting direct, mediation, moderation, and moderated-mediation effects of contingency factors on CSD. It contributes towards lessening the inconsistencies found in the prior literature regarding the effect of the level of competition (COMP), production complexity (PC), and indirect costs (INDIRECT-COSTS) on CSD.

Keywords: costing system design; costing system complexity; CSC; activity-based costing; ABC; contingency factors; moderated-mediation; partial least squares.

DOI: 10.1504/AAJFA.2025.149797

Afro-Asian Journal of Finance and Accounting, 2025 Vol.15 No.6, pp.723 - 744

Received: 13 Jun 2023
Accepted: 29 Dec 2023
Published online: 13 Nov 2025 *

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