Title: The implementation of activity-based costing and the financial performance of the Jordanian industrial shareholding companies
Authors: Husam Aldeen Al-Khadash, Mahmoud Nassar
Addresses: Hashemite University, P.O. Box 330125, Zarqa 13133, Jordan. ' Accounting Department, Applied Science Private University Amman, P.O. Box 926296, Amman 11931, Jordan
Abstract: The purpose of this study is to investigate the improvement in financial performance associated with the use of activity-based costing (ABC). Data were obtained through a cross-sectional mail survey of financial managers who furnished information regarding company financial performance, the extent of ABC usage, and the enabling conditions that have been identified in the literature as affecting ABC efficacy. Data were obtained from the Jordanian shareholding companies as of the end of 2009. Regression analysis is used to test the association between the awareness level of using ABC and the level of adopting ABC. It is also used to identify the improvement in ROA as a mean of financial performance which associated with ABC initiatives. Results show that the awareness level of using ABC is high among the financial managers, but ABC implementation is not high; also it is found that there is a positive association between ABC and improvement in ROA.
Keywords: performance improvement; financial performance; ABC success factors; structural equation modelling; Jordan; activity-based costing.
Afro-Asian Journal of Finance and Accounting, 2010 Vol.2 No.2, pp.135 - 153
Available online: 01 Dec 2010 *Full-text access for editors Access for subscribers Purchase this article Comment on this article