JAMAR Winter 2014

Winter 2014 - THE JOURNAL OF APPLIED MANAGEMENT ACCOUNTING RESEARCH

JAMAR Information

 

Table of Contents

EDITORIAL

Costing Life: Air, Water and Food

Author: Janek Ratnatunga

Page        1

Air, Water and Food, are the fundamental requirements for life to exist on this Earth. However, emitting greenhouse gases into the atmosphere is not only causing climate change, but also air pollution.  Management accountants can provide policy related decision information on investments and other actions taken to mitigate the impact of greenhouse gases and other air pollutants. Water costs are related to the issues of climate change. It is clear that many industries depend on water in the supply chain for their workforce and production and to maintain a healthy operating environment. However, the average cost of water is so cheap that there's no incentive to conserve or protect it. Should the water price be reflective of its value or is water a basic human right? All these arguments should be backed by reliable cost calculations, and price demand forecasts, clearly an area for management accounting involvement. 

Finally, the paper addresses the issue of ‘food’, i.e. how big business has taken ownership of the genetically modified (GM) ‘seeds’ required to grow the food.   By using patents, they have taken away a farmer’s right to save seeds for the next season. The paper argues that management accountants need to undertake the calculations that favour humanity, rather than profits.

 

ARTICLES

Predicting Corporate Bankruptcy Risk in Australia: A Latent Class Analysis

Authors: Stewart Jones, Maurice Peat

Page 13

In this paper a latent class model (LCM) is applied to estimate corporate bankruptcy and insolvency risk in Australia using a number of financial, market and macro-economic variables and indicators.  LCMs represent a significant improvement on traditional techniques such as standard logit and linear discriminant analysis because they relax the highly restrictive IID condition which can distort parameter estimates and potentially undermine predictive accuracy (Jones and Hensher, 2004). 

While LCMs are more general (powerful) than standard approaches, they differ from many other non-IID approaches in that they are relatively straight forward to estimate and interpret.  In this study we demonstrate the application and interpretation of LCM models based on a large sample of corporate failures in Australia. We also consider the potential of LCMs for future research and practice in this field.

 

The Application of Time-Driven Activity-Based Costing In the Hospitality Industry: An Exploratory Case Study

Authors: Bas Basuki, Mertzha Dwiputri Riediansyaf

Page 27

In managing a company, the management and the board need accurate information about operational cost structures and profitability in order to help them in the decision making processes. To provide accurate information, a cost calculation system is generally used to show how the company has allocated its resources to supply its products/services. 

This paper looks at the application of Time Driven Activity-Based Costing (TDABC) in a service company. The cost object of this research is a Hotel and the Room Division that is the main source of the hotel’s revenue. Approximately 80% of the hotel’s revenue comes from room rent activity.

Both direct and indirect costs are recalculated using the TDABC method. The results from the TDABC are then compared to the results from the initial cost calculation method used by the company. This research shows that the TDABC method is applicable for Hotel services costing and also that the capacity cost rate can be more accurately and flexibly used in cost compilation.

 

The Impact of Changes in Environment and AMT on Management Accounting Practices and Organizational Strategy, Structure and Performance

Authors: Tuan Zainun Tuan Mat, Malcolm Smith

Page 55

This study investigates the impact of changes in business environment and manufacturing technology on organizational strategy, structure and management accounting practices, and the effect of these changes on the organizational performance of manufacturing companies in Malaysia

A quantitative research design was adopted and structural equation modelling was employed as the main statistical technique to test the hypothesized model.

The results revealed a positive alignment among the external environmental factors and organizational factors with management accounting practices, which in turn positively impacted on organizational performance. Results also showed that neither market competition nor advanced manufacturing technology (AMT) influenced change in organizational structure.

This study also provides evidence of an interrelationship between management accounting practices and structure, but no evidence of a reciprocal relationship between management accounting practices and strategy.