ACCT 403 Saudi Electronic University Accounting Research and Practice Paper

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Question 1: The correct and complete sequence of steps in conducting research is as follows:
1.
2.
3.
4.
5.
6.
7.
Identify broad area,
Select topic,
Decide approach,
Formulate plan,
Collect information,
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Using our Saudi Digital library (SDL) you should find two papers in accounting field and determine
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Paper 1
1.The broad area of the
paper
2.The topic
3.Approach used
4.Data source
5. Data analysis
6.Findings
Paper 2
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Question 6: Define ANOVA and Regression Analysis [2.5 mark]
Alqudah et al., Cogent Business & Management (2022), 9: 2150119
https://doi.org/10.1080/23311975.2022.2150119
ACCOUNTING, CORPORATE GOVERNANCE & BUSINESS ETHICS |
RESEARCH ARTICLE
Difficulties in accounting system implementation
for service costs in the public sector
Obiedah Mohammad Alqudah1*, Noorhayati Mansor2 and Safrul Izani Mohd Salleh3
Received: 17 October 2022
Accepted: 17 November 2022
*Corresponding author: Obiedah
Mohammad Alqudah, Ph.D.
Candidate in Accounting, Faculty of
Business and Management, Universiti
Sultan Zainal Abidin Terengganu,
Malaysia,
Email: obaidah2@hotmail.com
Reviewing editor:
Collins G. Ntim, Accounting,
University of Southampton,
Southampton United Kingdom
Additional information is available at
the end of the article
Abstract: The current study aims to identify the role of difficulties in implementing
a public service cost accounting system in Jordan. The methodology of this study
focused on applying a quantitative approach. The survey sample consisted of 53 of
his employees who gained knowledge about the survey process of Jordan’s service
cost system. A questionnaire (90) was distributed, and each participant used
a targeted sampling technique. This is because few workers are interested in the
cost system for services. The study finds several results that play an important role
in calculating the cost of services in Jordan, including public sector factors (institu­
tional objectives, institution-specific issues, human resources, and mechanisms at
internal and state levels). Current research helps improve the performance and
development of the financial system. Its main goal is to improve the effectiveness
of government services while increasing budget realism and increasing savings and
openness in public spending.
Subjects: Accounting; Production, Operations & Information Management; Public &
Nonprofit Management; Corporate Social Responsibility &Business Ethics
Keywords: cost accounting system service; institutional difficulties; human resource
difficulties; internal mechanisms; state mechanisms; institutional objectives; public sector;
Jordan
1. Introduction
Originally, cost accounting was thought to be a mechanism for valuing inventory and calculating
the cost of sales for a certain time. Therefore, The costs were kept to a minimum by using
a mechanical and relatively simple procedure (Owusu, & Alhassan, 2021). However, cost account­
ing has exceeded financial accounting as a critical information system in both public and com­
mercial enterprises. Furthermore, cost accounting has evolved beyond the mathematical formula
and has evolved into a managerial activity in which accountants play an important role (Hasyim &
Jabid, 2019). Implementing a cost accounting system provides continuous updates on the beha­
viour and structure of expenditures and the efficiency of producing services. Recorded spending is
also used to examine the relative efficiency of resource allocation by each administration (Miraj &
Wang, 2019). On the other hand, general utility accounting serves as a starting point for applying
analytical and government accounting. New governmental frameworks are being used (as in other
European countries) as part of accounting standards Like New Zealand when it updated its cost
system in 2015 (Kajüter & Schröder, 2019).
The institution had an advantage or sufficient funds when operating in the non-profit sector.
Moreover, businesses are simpler than they are today, with less variety and complexity of goods,
© 2022 The Author(s). This open access article is distributed under a Creative Commons
Attribution (CC-BY) 4.0 license.
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services, and consumers. Firms can therefore make mistakes that are offset by revenue, thereby
obscuring mistakes and bad decisions (Hilorme et al., 2019). The margin of error is small.
Businesses can no longer make as many mistakes as they did in the past. Preparing offers and
investment decisions today requires the use of a very sharp pencil. Most of our competitors are
aware of the causality that creates costs (Modugno & Di Carlo, 2019). However, in other situations,
the systems for determining costs are inadequate and the process of producing accounting results
for strategic decisions may be inaccurate and not reflected in management reporting (Hokkinen,
2021).
Jordan has a dialectical process in the field of management accounting. However, this involves
the process of redesigning key accounting disciplines. The position of public sector accountants,
who are now basic collectors of information and preparers of financial statements and tax
information, needs to be developed by participating in management teams and providing decisionuseful information and sticking to the system that has been activated in developed countries such
as New Zealand and Sweden (Tahat et al., 2018). This study, therefore, shows the trend and even
greater need to establish cost accounting systems suitable for the operation of Jordanian public
institutions. Furthermore, this research aims to develop a cost system and link it with financial
accounting and identify the stock dynamics in the process and elucidate the structure of the
process, the stream, that adds value to a product or service. increase. Evolving costs and account­
ing dynamics in public institutions in Jordan (Hilorme et al., 2019). Similarly, the study should build
a system that informs not only the cost of a product or service, but also the cost of providing it,
including the type of customer or user, or the activity associated with the distribution channel
through which it is delivered is intended for the place. Accordingly, a questionnaire will be built in
this study until solutions are identified in the cost-service system.
This research contributes to the government’s financial planning, which determines to spend on
government services. Spending on services is most valuable, especially in developing countries like
Jordan. Therefore, analytical accounting schemes must be formalized to allow the public sector to
reverse its control based on management reports. Services and products must be improved and
redesigned to create non-commercial services and delivery processes improved to ensure future
viability. The structure of this document contains the following elements: The study design is
presented in Section 3. Section 5 uses descriptive analysis methods to examine data, test hypoth­
eses, and draw conclusions. Section 6 reviews the results, considers potential theoretical and
practical implications and highlights the limitations of the study.
2. Literature review
This section highlights various empirical and theoretical investigations into the implementation
issues of public sector accounting systems, which are fundamental aspects of the accounting
approach specified in global accounting standards. In addition, we provide detailed empirical
analysis. This is an important step in all types of research, both academic and scientific.
2.1. Cost accounting
The purpose of cost accounting in non-profit public institutions is to provide decision-making
information to various users and improve overall operational efficiency. Government agencies
that carry out manufacturing processes (Mohsin, et al, 2022). In addition, bodies responsible for
the regulation and supervision of financial and administrative processes, and higher government
authorities (Mohsin, et al, 2022). On the other hand, people who are end users of public production
can understand the cost of these items and the measures taken to reduce them without compro­
mising the quality of the goods and services produced (Hasyim & Jabid, 2019).
Costing techniques are defined as processes that transform input data to produce informational
outputs that enable the production of an organization’s products and services to be determined
(Haghipour et al., 2022; Hilorme et al., 2019). This approach requires operating information on the
financial execution of spending budgets and human resources, purchasing and contracting,
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inventory and asset management systems (Kajüter & Schröder, 2019; Love et al., 2021). As
a central premise, the methodology given emphasizes the relationship between capturing costs,
defining “cost centers”, and program categories used in the budgeting process. As a result, it
complements and strengthens the criteria for reviewing program category expenditure allocations
established when budgets are drawn up (Hokkinen, 2021).
Cost accounting should not only provide the management information necessary for decision
making, but also support general accounting in its role of inventory measurement and results
measurement (Acharya et al., 2022; Miraj & Wang, 2019). Accounting and financial regulations
influence the overall organizational performance of government (Rahayu et al., 2022). According to
Beeri et al., 2019) and Rokhayati et al., 2022), economic and organizational success depends on
better judgment. This requires an effective system for measuring results. Accounting in this
environment is under pressure to provide users with economic, financial, physical and productive
statements and analysis related to the subject of accounting (Mohr, 2019).
Accounting is an evolving science whose primary purpose is to classify, measure and evaluate
the financial operations performed by a company, record, integrate and is to create an appropriate
information base for execution. Receive management and decision-making in external and inter­
nal contexts (Biondi, 2011; Modugno & Di Carlo, 2019). Furthermore, cost accounting is the act of
quantifying the monetary expenditures made to achieve an organization’s goals. This application
helps businesses estimate economic losses due to product consumption, asset depreciation, and
deductions (Yatsenko, 2018, May). Nevertheless, cost accounting and financial accounting are her
two central aspects of accounting. Both stem from the need for clearly defined goals and expertise
(Mohr, 2019).
2.2. Service costs
Carrying out carrier service costs in an enterprise is important as it permits the short evaluation of
fees worried in generating merchandise and handing over offerings required for the enterprise to
retain operations (Sjödin et al., 2020). This permits the corporation to acquire the earnings
announcement right away in place of ready till the give up of the length whilst the overall
accounting is calculated (Tahat et al., 2018). Cost records withinside the public quarter are
important for figuring out the performance and exceptional spending. In phrases of the countries
that use this system, they have greater slender awareness of completely technical issues
(Lapuente & Van de Walle, 2020). According to Choi (2021). investigates requirement institutional
concept for such changes withinside the regular lives of servants have to entail adjustments in
organizational norms, values, and practices.
The suits this quest through the institutional lens to investigate how the governments integrated
current control technologies (Miraj & Wang, 2019). As a result, having a fee accounting plan allows
agencies to reply to disaster situations greater quickly. This is due to the fact this era makes it less
difficult to degree expenditures, which allows you to compel the deployment of plans to guard the
company’s potential to retain operations (Hasyim & Jabid, 2019). Businesses have needed to
interact in virtual transformation a good way to adapt to the brand new normal, which has led
to faraway paintings and the introduction of measures to enhance their operations. These cor­
porations may also discover themselves navigating a sea of numerous limitations if they do now
no longer have well-timed and actual pricing records (Tseng & Pilcher, 2017). The agile and brief
fee evaluation will assist them to make the route figure and keep away from turning stuck (Kajüter
& Schröder, 2019).
Service costing is an information system that can be used to record, determine, distribute,
accumulate, analyze, interpret, regulate, and report costs of production, sales, administration,
and financing. However, it is important for any business. When businesses lack proper cost
accounting, they are hit hard by: (Loft, 2020). Efficient pricing tactics are therefore hampered
and sales prices must be determined with manufacturing costs in mind. Therefore, without
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accurate and up-to-date cost figures, it is difficult to troubleshoot properly and make adjustments
over time. Ultimately, this can have a significant impact on corporate profits (Guerreiro & Amaral,
2018; Minoufekr, & Flapper, 2019).
In addition, it prevents you from knowing the most profitable activities. Cost accounting shows
which operations are profitable and which are loss-making (Trujillo-Ponce, 2013). So if you don’t do
this activity correctly, you’ll find it difficult to develop a strategic plan of action, and you’ll end up
focusing on work that may not bring you the money you need. Moreover, it makes firms less
competitive (Carleton et al., 2022). Costs Understanding a company’s competitive advantage
requires analysis. In this way, you can determine which parts of the production chain can be
improved to increase customer value, which parts can be cut to reduce costs, and eliminate costgenerating but non-profitable operations (Almatarneh et al., 2022). In addition, combined with
a study of competition and supplier relationships, you can find competitive advantages that can
help your company protect and strengthen its market position. It is a barrier to innovation and
investment. Cost information is important in answering questions about the feasibility of innova­
tion (Sun et al., 2020). Nevertheless, it interferes with budget control. Fair cost estimating is
a technique for detecting waste and expenses, cost overruns in work processes, and losses due
to staff and machine non-operation, among other costs that have a significant financial impact on
an organization (Fang et al., 2017).
2.3. The Jordanian government faces difficulties in developing a cost accounting system in
the public sector
Even if a company does not have a proper cost accounting system in place, it is easy to make
erroneous decisions, lose complete control of funds, plan, control and evaluate work processes to
make a profit. not (Hokkinen, 2021). The cost system shows some principles and how to implement
them. These are described in more detail in this work, and although they apply to a wide range of
organizations, they are characterized by the fact that such practices are more common in the
private sector. relatively new and little studied in the current literature (Steiss, 2019). Several
factors contribute to the fact that much of what we know about public sector costs remains
untapped. The mere fact that public institutions generally do not pursue commercial objectives
and therefore do not operate in competitive markets means that they do not have the “competi­
tiveness requirement” to control costs as systematically as private enterprises (Liu et al., 2022).
Despite astounding progress in Jordan’s public accounting, there are insufficient administrative
tools to directly monitor the expenditures of certain public institutions, for example, the accuracy
of the municipal products and services they provide. It is impossible to know the exact cost (Mohr,
2019).There is a wealth of approaches and information on the use of cost systems and cost
management in the private sector. Such procedures have existed for many years. Originally
developed in industrial firms, it eventually spread to service industries and evolved through various
accounting and control practices (Alkarawy et al., 2021; Alqudah, et al., 2019).
However, with a better understanding of private sector management and accounting, Jordan’s
public sector has seen significant changes in management paradigms in recent years, with the
bureaucratic state becoming more flexible to the administrative state. One of the most serious
accounting problems in the public sector is work backlog due to the lack of time to put in place
a systematic work system and the inability to access all records and reflect them in accountants’
accounts. . Additionally, not documenting cash movements will make it impossible to track your
money. Furthermore, with a qualified technical staff that is part of the workforce, cost control
strategies are typically implemented in large organizations, enabling them to improve their
competitiveness and longevity. Developing a service costing system is difficult because there are
few calculation experts (Al-Doori, 2021; Al-Kharabsheh, 2021; Al-Qudah et al., 2020; Nimri et al.,
2015).
The Jordanian government struggles to develop cost accounting systems in the public sector due
to lack of information and technical expertise. Discovering and applying approaches to managing
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costs that are perceived and used by large enterprises can improve control (Alkarawy et al., 2021).
Therefore, preliminary preparations are necessary for the work of building a management system.
This requires a professional technical approach, an understanding of human interaction, and good
data processing skills of the company. Some basic aspects of system implementation. B. Full
support from top management, an analysis of the costs and benefits of information generated
by the system, and the recognition that the system itself does not generate information and must
be continually revised and updated explain this care. Yes (Hammitt, 2021; Alqudah et al., 2021,
September).
2.4. Hypothesis development
Research on the effectiveness of government services is developing in four main areas. Initially,
some studies focused on measuring and improving efficiency in real-world applications, often
focused on specific types of government services in one country. Second, government efficiency
was treated quantitatively using statistics on government service input, but no results were
used. Third, some studies assess the efficiency of public services based on outputs rather than
inputs. Finally, some looked at both inputs and outputs. However, these studies do not consis­
tently compare the efficiency of government services across countries. (Niasti et al., 2019) argue
that institutional goals eliminate bias in standard costing systems and provide a more repre­
sentative cost metric for better decision-making. The institution’s goals have been cited as one
of the most important managerial breakthroughs of the past century (Attanayake & Aktan,
2015). This shifts management’s focus away from the traditional emphasis on short-term
planning, oversight and decision-making, and product costing to a more integrated, strategic,
and competitive focus on the company’s cost structure. A cost management method that
moves to a sensitive approach (Quesado & Silva, 2021). Institutional difficulties have become
an essential tool for improving the competitiveness of business organizations by opening up
new ways of allocating overhead costs when determining the cost of products and other cost
items. Placement issues are not a new concept in the public sector (Bozorgmehriana et al.,
2012). Many companies are effectively using internal and state-level mechanisms to adjust
pricing structures and better manage resources. The benefits of well-structured internal and
governmental mechanisms go beyond increased cost awareness. Internal and governmental
mechanisms are primarily focused on the operations necessary to achieve corporate objectives,
so managers must increase operational efficiency and eliminate or reduce non-value added
operations (Nielsen, 2022). Information extracted from the government services system was
used for product pricing, procurement, new product development, and product profitability
analysis (Lu et al., 2017). Product mix selection (Baki & Cheng, 2021; Homburg et al., 2018).
Customer Profitability Analysis (Bataineh, 2018). Cost of quality analysis (Tran & Tran, 2022).
Commons decision (Mowen, et al, 2022). Environmental management (Viranda et al., 2020).
Project management (Kusuma & Bima, 2022), software development (Abdo et al., 2021; Lee
et al., 2022; Wangrow et al., 2015), etc.
This study is based on the following assumptions, which are informed by the investigation of past
and theoretical studies linked to the subject of this research, and are based on the study question
and its objectives:
H1: The institution’s objectives have a positive influence on the Services cost accounting in Jordan’s
public sector.
H2: The difficulties specific to the institution have a positive influence on the Services cost accounting
in Jordan’s public sector.
H3: The difficulties specific to human resources have a positive influence on the Services cost
accounting in Jordan’s public sector.
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H4: The mechanisms at the internal level have a positive influence on the Services cost accounting in
Jordan’s public sector.
H5: The mechanisms at the state level have a positive influence on the Services cost accounting in
Jordan’s public sector.
3. Methodology
The interest of this research is to discover the relationships between different variables. The
quantitative approach was used to examine the relationships between variables effect of public
sector factors that influence on services cost accounting in Jordan’s public sector. Data was
collected using a questionnaire and a quantitative analysis method was done (Punch, 2013).
The desire to better grasp a problem scenario that has to be researched and understood justifies
scientific study endeavors. There are additional practical reasons for conducting this research
effort because the end result is a set of guidelines that can effectively guide the practical applica­
tion of the knowledge gained during the investigation process so that services cost systems can be
built using some of the fundamentals discovered in this work.
3.1. Sampling population
The survey was limited to Jordanian public sector employees. This group demonstrates a good
awareness and growing interest in the cost of services. The research unit was made up of people
from different sectors of the Jordanian public sector. The Jordanian government has hired workers
interested in service cost accounting. Therefore, the qualifications of employees interested in
service costing in the Jordanian public sector were used as a reference. The sample should meet
employees interested in service cost accounting (Birmingham & Wilkinson, 2003).
Figure 1. Theoretical
framework.
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3.2. Sampling size
We used the SPSS program to calculate the sample size. For an effect size of 0.15, a confidence
level of 95%, a significance level of 0.05, and a statistical power of 95%, you should collect at least
50 samples. However, (Krejcie & Morgan, 1970) recommend using at least 70 samples for con­
sistent results when using statistics. Statistics is a powerful statistical software platform (SPSS).
A sample size of less than 70 can lead to unstable parameter values and insufficient statistical
significance (Birmingham & Wilkinson, 2003). As a result of this policy, the minimum sample size
for this study was set to 70 to allow for adequate statistical analysis. because of very few
employees are familiar with the service cost of the system.
3.3. Procedure of data collection
The study relied on primary data collected from individuals working in the fields of cost accounting,
operations management, services, and business excellence in the Jordanian government and
collected 53 questionnaires from 38 government agencies, including the general budget depart­
ment. General social insurance agencies, tax offices, etc. Interested in hosting services and need
access to the Internet. Data were collected using an online questionnaire. Therefore, the data
collection period was approximately 4 weeks (10 June 2022 to 30 August 2022). At the end of the
data collection process, we received 53 valid questionnaires that were used for analysis. In fact,
questionnaires are used to achieve research objectives based on the above concepts. This ques­
tionnaire includes all variables, each based on previous research. The questionnaire consists of four
sections. Preface, Demographic Questions, Respondent Answers, and public sector factors
Affecting Costs of Public Sector Services in Jordan.
4. Data analysis and findings
4.1. Background of respondents
Using the SPSS.26 technique a statistical analysis was performed. Whereas, the SPSS was used as
a preliminary and advanced analysis (coding the data and Descriptive Statistics), which is useful for
research that has a relatively small sample size with a (complicated) interaction effect model (Cronk,
2017; Hinton et al., 2014). According to (Hinton et al., 2014), the SPSS.26 technique is particularly
suitable in situations where the “study is exploratory” in nature. It is also relevant when the study
objectives emphasize predicting and explaining variance in the main indigenous variable using differ­
ent variables (Hinton et al., 2014). These cases are applicable to this study where the main objective is
to develop a model that explains employee retention in the Jordanian public sector context.
This section consists of demographic information of respondents including gender, age, and
experience. Table 1 illustrates the demographic information.
As indicated in Table 1, the majority of the respondents were male comprising (54.7%), while the
remaining are female (45.3%). In terms of educational qualification, the majority of the respon­
dents belong to the educational qualification group “BA” (43.4%), while the least educational
qualification group of respondents were those “Business management diploma” at (1.9%).
Regarding career level, the majority of the respondents belong to the career level group “Head
of the Department” (35.8%), following the career level group “Manager” (28.3%), the career level
group of “accountant” at (13.2%), while the least career level group of respondents were those
“Engineer” at (1.9%). Regarding age, the majority of the respondents belong to the age group
“From 40 to less than 50” (43.4%), following the age group between “from 30 less than 40” years
(52.8%), the age group of “From 50 to less than 60” at (11.3%), while the least age group of
respondents were those “From 20: less than 30” at (3.8%). In terms of experience, (45.3%) had
“less than 5 years”, (15.1%) had “From 5: less than 10”, (11.3%) had “From 10: less than 15”,
(15.1%) had “From 15: less than 20”, and (13.2 %) had “from 20 and over”.
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Table 1. Demographic information of respondents (N = 53)
Variables
Gener
Educational
Qualification
Career Level
Age
Years of Experience
Count
Percentage
Male
29
54.7
Female
24
45.3
master
21
39.6
BA
28
52.8
Business management diploma
1
1.9
PhD
3
5.7
Researcher
8
15.1
Head of the Department
19
35.8
Internal Auditor
3
5.7
Manager
15
28.3
accountant
7
13.2
Engineer
1
1.9
From 20: less than 30
2
3.8
from 30 less than 40
22
41.5
From 40 to less than 50
23
43.4
From 50 to less than 60
6
11.3
less than 5 years
24
45.3
From 5: less than 10
8
15.1
From 10: less than 15
6
11.3
From 15: less than 20
8
15.1
from 20 and over
7
13.2
total = 53
4.2. Descriptive analysis of variables
Responses to the variables in this study were measured using a 5-point Likert scale. 1 represents
“strongly disagree” and 5 represents “strongly agree”. Based on the descriptive statistics shown in
Table 1, the mean values of the variables range from 3.247 to 4.226, with perceived utility having
the lowest mean and the public sector factor having the highest mean. All variables average above
3, indicating that the majority of respondents agree that these factors affect the cost of public
sector services in Jordan. The median cost of service is 3.96, meaning that respondents are
between neutral and cost of service, closer to the latter than the former. Regarding the variability
of the responses, we observe that all variables have a standard deviation of less than 1, which is
considered reasonable.
4.3. Measurement model analysis
The theoretical framework presented in the literature review was modeled in SPSS software using
real-world data collected from research studies as showm in Figure 1. The independent variable for
the public sector factor has five subvariables. 13 points for agency goals, 10 points for agencyspecific issues, 8 points for human resources-specific issues, 8 points for internal-level mechan­
isms, and 8 points for national-level mechanisms. There are six dependent variables for investment
decisions. Since constructs are reflective, single-headed arrows point outward from the construct
towards its indicator. Only reliable (consistent) valid constructs are suitable for causality testing.
Therefore, it is important to test reliability and validity (Sekaran & Rani, 2010). All items are
therefore reliable because, according to the findings of the current investigation, all the variables
fall within the range of.76 and 84. Finding the variable with the greatest mean will help to show
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Table 2. Descriptive statistics of the study variables
Variables
N
Minimum
Maximum
Mean
Std. Deviation
Institution’s
objectives
53
2.35
4.42
3.50
.441
Difficulties
specific to the
institution
53
3
5
3.81
.406
Difficulties
specific to
human
resources
53
3
5
4.00
.478
Mechanisms at
the internal
level
53
3
5
3.79
.296
Mechanisms at
the state level
53
3
5
3.92
.390
Services cost
accounting
53
3
5
3.96
.452
Valid N (listwise)
53
how respondents responded to the survey (DeSimone et al., 2015). Therefore, the items in this
study were ranked by mean, highest to lowest, as shown in Table 2. The services cost accounting
had a mean of (3.96) and a standard deviation of (0.478), while difficulties unique to human
resources had the greatest mean (4.00) and lowest standard deviation (0.478). (0.452).
Mechanisms at the state level come next, with a mean of (3.92) and a standard deviation of
(0.390), followed by Difficulties specific to the institution, with a mean of (3.81) and a standard
deviation of (0.390). (0.406). Mechanisms at the internal level received a mean of (3.79) and
a standard deviation of (0.296). The variable Institution’s objectives received the lowest mean,
with a mean of (3.50) and a standard deviation of (0.441).
Table 3 presents the Minimum, Maximum, Mean, Std. Deviation SMA, and, relative weight to (13)
paragraphs regarding (the objectives of applying service cost accounting in the public sector).
The previous tables depict descriptive statistics according to the objectives of applying service
cost accounting in the public sector. The first order of cost accounting provides decision-makers
with the right information at the right time, the relative weight of 90.6% and Std. Deviation 0.586.
In the second place, both cost accounting raises the level of financial efficiency, cost accounting
helps to ensure the effectiveness of the cost control system with a relative weight of 88.3% and
Std. Deviation 0.465, 0.772. In third place, both came from cost accounting supports the require­
ments of total quality management systems, cost accounting facilitates the process of comparing
the ways of providing service to choose the best among them relative weight 86.4% and Std.
Deviation are 0.65, 1.021, and in fourth place cost accounting helps prioritize improvement in
service delivery processes relative weight 85.3%. In last order, Cost Accounting aims to achieve the
company’s vision relative weight 81.1% and Std. Deviation 0.394.
institution’s objectives Table 4 presents the Minimum, Maximum, Mean, Std. Deviation SMA, and,
relative weight to (10) paragraphs regarding (the difficulties specific to the institution in applying
service cost accounting in the public sector).
The previous table shows the distribution of sample members based on the difficulty of applying
service cost accounting in the public sector (difficulties specific to the institution). In the first order,
both came from the lack of an advanced operations management system, and the routine
management negatively affects the application of service Cost Accounting relative weight 81.9%
and Std. Deviation 0.586, 1.085. In the second place, there is no integration and interdependence
Page 9 of 29
N
53
53
53
53
53
53
53
Paragraph
Cost accounting aims
to achieve the
company’s vision
Cost accounting
raises the level of
financial efficiency
Cost accounting
raises the level of
government services
provided to clients
Cost accounting
helps prioritize
improvement in
service delivery
processes
Accounting for fair
pricing of
government services
based on the cost of
each service
provided
Cost accounting
provides the right
information to
decision-makers at
the right time
Cost accounting
helps to ensure the
effectiveness of the
cost control system
2
2
2
3
3
3
3
Minimum
5
5
5
5
5
5
5
Maximum
3.98
4.34
4.28
3.88
4
3.95
3.66
Mean
0.772
0.586
0.662
0.376
0.5
0.465
0.394
Std. Deviation
Table 3. Descriptive statistics according to the objectives of applying service cost accounting in the public sector
4.4
4.5
4.1
4.3
4.1
4.4
4.1
SMA
(Continued)
88.3
90.6
81.9
85.3
82.6
88.3
81.1
relative weight
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Page 10 of 29
53
53
53
53
53
Cost accounting
supports the
requirements of
institutional
excellence programs
Cost accounting
supports the
requirements of total
quality management
systems
Cost accounting
facilitates the
process of comparing
the ways of providing
service to choose the
best among them
Cost accounting
guides service
developers towards
innovation and smart
transformation of
government services
Cost accounting
systems contribute
to advancing
development and
achieving prosperity
53
53
Cost accounting
helps measure
organisational
performance
Valid N (listwise)
N
Paragraph
Table 3. (Continued)
2
2
2
3
2
2
Minimum
5
5
5
5
5
5
Maximum
4.28
3.72
3.64
4
3.7
4.04
Mean
0.662
0.818
1.021
0.65
0.774
0.831
Std. Deviation
4.2
4.2
4.3
4.3
4.2
4.1
SMA
83.8
83.8
86.4
86.4
83.8
82.6
relative weight
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Page 11 of 29
N
53
53
53
53
53
Paragraph
The absence of
legislation (laws—
regulations)
supporting the
application of
accounting for
service costs in the
government sector
The electronic
financial systems
used do not meet
the current
necessary and
expected
requirements for
calculating the costs
of services
Failure to provide
clear and published
evidence in more
than one means for
government services
Heterogeneity and
harmony of
government services
provided in various
agencies
Lack of an advanced
operations
management
system
2
2
1
2
2
Minimum
5
5
5
5
5
Maximum
4.34
4.28
3.49
3.72
3.72
Mean
0.586
0.662
0.993
0.818
0.818
Std. Deviation
4.1
3.9
3.9
3.8
3.8
SMA
Table 4. Descriptive statistics according to the difficulties specific to the institution in applying service cost accounting in the public sector
(Continued)
81.9
78.5
78.1
75.8
76.6
relative weight
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Page 12 of 29
53
53
53
53
Lack of information
supporting the
application of service
cost accounting in
the government
sector
Weak cooperation
between employees
and each other in the
relevant
departments on the
same side
Routine
administration
negatively affects
the application of
service cost
accounting
There is a dearth of
specialists in the cost
accounting of
government services
53
53
There is no
integration and
interdependence
between the internal
systems such as the
operations system,
the services system,
the financial system,
the innovation
system and others)
Valid N (listwise)
N
Paragraph
Table 4. (Continued)
2
1
2
1
2
Minimum
5
5
5
5
5
Maximum
4
3.49
3.57
3.55
3.98
Mean
0.734
1.085
0.636
0.992
0.772
Std. Deviation
3.9
4.1
3.8
3.9
4.1
SMA
78.1
81.9
77
78.5
81.5
relative weight
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between the internal systems such as the operations system, the services system, the financial
system, the innovation system, etc., with a relative weight of 81.5% and Std. Deviation 0.772. In
third place, both came from lack of information supporting the application of service Cost
Accounting in the government sector, heterogeneity and harmony of government services pro­
vided in various agencies relative weight 78.5%, Std. Deviation 0.992 and in fourth place equally in
the ratio between the lack of clear and published evidence in more than one means of government
services; there is a dearth of specialists in the field of accounting for government services costs
relative weight 78.1% and Std. Deviation 0.993, 0.734. In last order, the electronic financial
systems used do not meet the current necessary and expected requirements for calculating the
costs of services relative weight 75.8% and Std. Deviation 0.818.
Table 5 presents the Minimum, Maximum, Mean, Std. Deviation SMA, and, relative weight to (6)
paragraphs regarding (the difficulties specific to human resources in applying service cost account­
ing in the public sector).
The previous table shows the distribution of the sample members according to difficulties in
applying service cost accounting in the public sector (difficulties specific to human resources). In
the first order, both came from failure to provide a clear mechanism for accounting for service
costs; taking into account the privacy of the public sector failure to provide a clear means of
accounting for service costs that take into account the privacy of the public sector relative weight
of 84.2% and Std. Deviation 0.818. In the second place, the scarcity of training programs that
support the application of service accounting in the public sector relative weight of 79.6%, Std.
Deviation 0.772 and in the third place, existing expertise is not specialized in the application of
service cost accountants in the public sector relative weight of 77.0%, Std. Deviation 0.818 and in
fourth place the presence of some costs that are shared by more than one institution relative
weight of 75.8%, Std. Deviation 0.993 and in order fifth unwillingness of service cost accountants in
the public sector to develop their innovative skills in line with the rate of global changes weight
relative of 70.6%, Std. Deviation 0.586 and in sixth place poor accounting skills for public sector
workers relative weight of 69.4% and Std. Deviation 0.662.
Table 6 presents the Minimum, Maximum, Mean, Std. Deviation SMA, and, relative weight to (8)
paragraphs regarding (the mechanisms at the internal level that help implement service cost
accounting in the public sector).
The previous table shows the distribution of the sample members according to mechanisms that
help implement service cost accounting in the public sector (at the internal level). In the first order,
came the development of current accounting systems relative weight of 92.5%, Std. Deviation
0.627 and in second place strengthening the concepts of institutional excellence and the total
quality management system and spreading its culture relative weight of 92.1%, Std. Deviation
0.530, and in third place provides a modern and automated operations management system that
defines all activities of service delivery operations relative weight of 91.7%, Std. Deviation 0.511
and in fourth place develop professional training programs for accounting staff relative weight of
90.6%, Std. Deviation 0.419,0.456 and in order fifth both educating employees about the services
guide and its role in calculating service costs, supporting and spreading the culture of change
management as a tool that helps to apply modern service cost accounting with weight relative of
90.2%, Std. Deviation 0.0.456 and in sixth place implementation of field visits to see the best
global, regional and local practices and experiences the relative weight of 89.1% and Std. Deviation
0.339.
Table 7 presents the Minimum, Maximum, Mean, Std. Deviation SMA, and, relative weight to (8)
paragraphs regarding (the mechanisms at the state level that help implement service cost
accounting in the public sector).
Page 14 of 29
53
53
53
53
The presence of
some costs that are
shared by more than
one institution
Poor accounting skills
for public sector
workers
The unwillingness of
service cost
accountants in the
public sector to
develop their
innovative skills in
line with the rate of
global changes
The scarcity of
training programs
that support the
application of service
accounting in the
public sector
53
53
Existing expertise is
not specialized in the
application of service
cost accounting in
the public sector
Valid N (listwise)
N
53
Paragraph
Failure to provide
a clear mechanism
for accounting for
service costs that
take into account the
privacy of the public
sector
2
2
2
1
2
2
Minimum
5
5
5
5
5
5
Maximum
3.98
4.34
4.28
3.49
3.72
3.72
Mean
0.772
0.586
0.662
0.993
0.818
0.818
Std. Deviation
4
3.5
3.5
3.8
3.8
4.2
SMA
79.6
70.6
69.4
75.8
77
84.2
relative weight
Table 5. Descriptive statistics according to the difficulties specific to human resources in applying service cost accounting in the public sector
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Page 15 of 29
N
53
53
53
53
53
53
Paragraph
Develop professional
training programs for
accounting staff
Development of
current accounting
systems
Interconnection and
integration of
internal systems
electronically and
directly
Implementation of
field visits to see the
best global, regional
and local practices
and experiences
Provide a modern
and automated
operations
management
system that defines
all activities of
service delivery
operations
Educating employees
about the services
guide and its role in
calculating service
costs
2
3
3
3
2
2
Minimum
5
5
5
5
5
5
Maximum
4.19
4.02
3.64
3.83
3.39
3.71
Mean
0.576
0.511
0.339
0.456
0.627
0.419
Std. Deviation
4.5
4.6
4.5
4.5
4.6
4.5
SMA
(Continued)
90.2
91.7
89.1
90.6
92.5
90.6
relative weight
Table 6. Descriptive statistics according to the mechanisms at the internal level that help implement service cost accounting in the public sector
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N
53
53
53
Paragraph
Support and
disseminate the
culture of change
management as
a tool that helps to
implement modern
service cost
accounting
Strengthening the
concepts of
institutional
excellence and the
total quality
management
system and
spreading its culture
Valid N (listwise)
Table 6. (Continued)
3
3
Minimum
5
5
Maximum
3.72
3.82
Mean
0.530
0.m
Std. Deviation
4.6
4.5
SMA
92.1
90.2
relative weight
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N
53
53
53
53
53
53
Paragraph
He issued binding
legislation for all
government
agencies to calculate
the costs of
government services
Promote the
concepts of
government cost
accounting
Develop strategic
performance
indicators for
government services
costs
Hiring specialists
outside expertise
Adopting an
integrated project at
the country level,
especially in
calculating the costs
of government
services
Interest in
exchanging
accounting
experiences at the
level of government
agencies
2
2
2
2
2
2
Minimum
5
5
5
5
5
5
Maximum
3.7
4.04
4.28
3.72
3.72
3.72
Mean
0.774
0.831
0.662
0.818
0.948
0.948
Std. Deviation
4.4
4
3.8
4.5
4.4
4.4
SMA
(Continued)
87.5
80
77
90.2
88.3
88.7
relative weight
Table 7. Descriptive statistics according to the mechanisms at the state level that help implement service cost accounting in the public sector
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N
53
53
53
Paragraph
Activating the
integration between
the cost accounting
system and other
systems (accounting,
operations, services,
etc.)
Promote innovative
accounting studies in
the field of service
costs
Valid N (listwise)
Table 7. (Continued)
2
3
Minimum
5
5
Maximum
4.28
3.88
Mean
0.662
0.376
Std. Deviation
4.4
4.5
SMA
88.3
90.6
relative weight
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The previous table shows the distribution of the sample members according to mechanisms that
help implement service cost accounting in the public sector (at the state level) .In the first order
activating the integration between the cost accounting system and other systems (accounting,
operations, services, etc.)The relative weight of 90.6%, Std. Deviation 0.376 and second place
develop strategic performance indicators for government services costs relative weight of 90.2%
and Std. Deviation 0.818. In third place, he issued binding legislation for all government agencies
to calculate the costs of government services relative weight of 88.7% and Std. Deviation 0.948. In
fourth place, both promoted the concepts of government cost accounting and promoted innova­
tive accounting studies in the field of service costs relative weight of 88.3%, Std. Deviation 0.662
and in order fifth, interest in exchanging accounting experiences at the level of government
agencies weight relative of 87.5%, Std. Deviation 0.774 and in sixth place adopting an integrated
project at the country level, especially in calculating the costs of government services relative
weight of 80.0%, Std. Deviation 0.831 and in the seventh rank, the use of specialized external
expertise, with a relative weight of 77.0% and Std. Deviation 0.662.
4.4. Correlation analysis
On the other hand, the association between subjective norms and taxpayers who engage in tax
evasion is shown to be r = 0.394 (p 0.05) Table 8ʹs analysis of the correlation between variables,
indicating that there is a statistically significant relationship between the two variables. The
Pearson correlation coefficient for the relationship between services cost accounting and institu­
tional difficulties, human resource difficulties, internal mechanisms, state mechanisms, institu­
tional objectives, and those variables is r = 0.608 (p 0.05), r = 0.908 (p 0.05),773,789, and r = 0.197
(p 0.05), respectively. Besides a statistically significant level of p 0.05 and n = 53, it suggests that
the independent factors and the study’s dependent variable have a positive association.
According to Table 8, there was a lower correlation between difficulties special to the institution
and the services cost accounting (.608; p. 05) and a higher correlation between difficulties specific
to human resources (.908; p. 01). In contrast, the connection between Institutional goals and
Services cost accounting was (.197; p. 01), and the correlation between Difficulties Specific to
Mechanisms at the Internal Level was (.773; p. 01). The findings show that all of the variables are
significantly correlated at (p.01, p. 05).
4.5. Linear regression analysis
Table 9 shows the regression coefficients for tax evasion as independent variables to the dependent
variable. Where (p0.01), all variables are significant. The services cost accounting had the highest
t-value, which was found to be (t-value = 8.049). This showed that the independent variables had the
most impact on explaining the services cost accounting, the dependent variable. The lowest t-value
(t-value = −2.152) showed that with Institution’s objectives. The greatest t-value for Difficulties
specific to human resources was at (1.349), whereas mechanisms at the internal level had
a t-value of (1.349). (8.349). The independent variable highly correlated with the dependent variables,
according to the results of the testing hypotheses. Therefore, all theories are accepted.
5. Discussion
The study’s goal was to learn more about the challenges involved in implementing a cost account­
ing system in the public sector. Likewise, the model used in this study has undergone evaluation by
the public sector, highlighting the significance of a cost accounting system in obtaining exceptional
results. Jordan’s entire public sector can oversee and allow the implementation of any methods or
tools, including the cost accounting system (Quesado & Silva, 2021). Therefore, Jordan’s total
performance might not be enhanced by the cost accounting method. The study’s findings can also
provide light on connections between institutional difficulties, human resource difficulties, internal
mechanisms, state processes, and institutional objectives in the context of services cost account­
ings. The findings of this study, which emphasize services cost accounting as a relationship super­
visor, can also support results-based care.
Page 20 of 29
.197
.158
53
N
53
N
Sig. (2-tailed)
.000
Pearson Correlation
.789**
53
N
Sig. (2-tailed)
.000
Pearson Correlation
.773**
53
N
Sig. (2-tailed)
.000
Pearson Correlation
.908**
53
N
Sig. (2-tailed)
.000
Sig. (2-tailed)
Pearson Correlation
.608**
Pearson Correlation
*. Correlation is significant at the 0.05 level (2-tailed).
53
.011
.347*
53
.004
.390**
53
.000
.797**
53
.002
.410**
53
1
53
53
N
.608**
.000
1
Difficulties
specific to the
institution
Sig. (2-tailed)
Pearson Correlation
Services cost
accounting
**. Correlation is significant at the 0.01 level (2-tailed).
Institution’s
objectives
Mechanisms at the
state level
Mechanisms at the
internal level
Difficulties specific
to human resources
Difficulties specific
to the institution
Services cost
accounting
Variables
Table 8. Correlation analysis of the study variables
53
.123
.214
53
.000
.771**
53
.000
.652**
53
1
53
.002
.410**
53
.000
.908**
Difficulties
specific to human
resources
53
.015
.331*
53
.000
.576**
53
1
53
.000
.652**
53
.000
.797**
53
.000
.773**
Mechanisms at
the internal level
53
.066
.254
53
1
53
.000
.576**
53
.000
.771**
53
.004
.390**
53
.000
.789**
Mechanisms at
the state level
53
1
53
.066
.254
53
.015
.331*
53
.123
.214
53
.011
.347*
53
.158
.197
Institution’s
objectives
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Page 21 of 29
Services cost
accounting
Dependent
Variable
0.351
R2
R
0.593
ANOVA
Model
Summery
15,534
F
Coefficient
0.083*
Sig
F
Table 9. Linear regression analysis of the study variables
172/6
Df
−0.482
0.248
0.59
0.181
0.206
−0.101
Difficulties
specific to
the
institution
Difficulties
specific to
human
resources
Mechanisms
at the
internal level
Mechanisms
at the state
level
Institution’s
objectives
B
(Constant)
State
0.047
0.079
0.134
0.071
0.082
0.271
Std. Error
−0.099
0.178
0.119
0.623
0.223
Beta
−2.152
2.604
1.349
8.349
3.035
−1.774
T
T
0.037
0.012
0.184
0
0.004
0.083
Sig
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Even though the first hypothesis was confirmed by utilizing Pearson correlation and linear
regression analysis to determine the impact of the institution’s objectives and services cost
accounting in Jordan’s public sector. The results reveal a statistically significant correlation
between the two variables, indicating a strong connection between an institution’s objectives
and its services cost accounting. It is clear that cost accounting in the public sector determines
the cost of carrying out the activity and promptly provides decision-makers with the necessary
information, meeting the strategic goal of financial efficiency and enabling getting the best results
given the available resources. Additionally, it does the necessary comparisons to estimate the
performance costs of comparable organizational units over time. Projects and programs that aim
to accomplish economic and social growth as well as deliver government services at the needed
level and at the lowest cost must be properly implemented by the government administration.
These results agree with earlier studies (Choi, 2021; Lapuente & Van de Walle, 2020; Sjödin et al.,
2020). H1 is therefore approved.
Although the influence of the difficulties specific to the institution and services cost accounting in
Jordan’s public sector was determined by using Pearson correlation and linear regression analysis,
the second hypothesis was validated. The findings show a statistically significant association between
the two variables, showing a strong link between institutional-specific challenges and public sector
services cost accountings. The aforementioned makes it evident that there have been a number of
improvements in the cost systems that have caused people to reevaluate the old cost accounting
systems, which have come under heavy fire for the information they provide that is inaccurate and
irrelevant. The activity-based costing system (ABC) was developed in response to the contemporary
environment and those old costing systems’ detractors. However, it was also the target of numerous
criticisms, particularly because it requires a contemporary integrated infrastructure made up of
a sophisticated accounting system, an automated processes management system, and others. In
addition to the high expenditures associated with conducting extensive research and worker inter­
views necessary to compile the data and information needed to finish the ABC system the use of
discretion and personal judgment in deciding how much time to devote to facility activities, as well as
the difficulty of maintaining the system due to changes in operational procedures and changes in the
amount of resources used, such as an increase in the number of products and distribution channels
and a change in customer preferences. These findings support past research (Alkarawy et al., 2021;
Hammitt, 2021; Alqudah et al., 2021, September). Therefore, H2 is approved.
Whereas using Pearson correlation and linear regression analysis to assess the influence of the
challenges particular to human resources and services cost accountings in Jordan’s public sector,
the third hypothesis was shown to be correct. The findings show a statistically significant associa­
tion between the two variables, pointing to a close relationship between services cost accountings
and issues unique to human resources. The aforementioned makes it abundantly evident that the
activity cost accounting system was originally created to fulfill the needs of industrial enterprises
(products), and that it was later applied to satisfy those of the services sector, which saw a rapid
expansion in the private sector. It was discovered that the method does not take the public
sector’s privacy into account through the government sector’s recent trend to quantify the price
of government services. Due to the lack of specialized capabilities in this area and the novelty of
the notion of calculating the costs of government services, there is currently no mechanism in
place to address the needs of the public sector, which results in price distortions for services and
goods. The outcomes of preceding investigations (Hokkinen, 2021; Kajüter & Schröder, 2019; Love
et al., 2021) are in agreement with these outcomes. Therefore, H3 is approved.
Even though the impact of the internal processes and the services cost accounting in Jordan’s
public sector was determined using Pearson correlation and linear regression analysis, the fourth
hypothesis was still supported. The findings demonstrate a statistically significant association
between the two variables, pointing to a close relationship between internal mechanisms and
services cost accountings. The aforementioned makes it clear that the current cost accounting
application mechanisms must create accounting systems and automate the systems that support
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them, as well as assess the effects of using cost data and its calculation outputs on improving
financial efficiency, service efficiency, and the rationalization of public spending. Along with
educating all public sector stakeholders on the value of cost accounting and striving to strengthen
human resources. These findings support past research (Biondi, 2011; Modugno & Di Carlo, 2019;
Yatsenko, 2018, May; Mohr, 2019). Therefore, H4 is approved.
But even though the influence of the state-level procedures and the services cost accounting in
Jordan’s public sector were determined using Pearson correlation and linear regression analysis,
the fifth hypothesis was nevertheless supported. The findings demonstrate a statistically signifi­
cant association between the two variables, pointing to a close relationship between state-level
mechanisms and services cost accountings. The requirements listed above make it abundantly
evident that cost accounting must be performed through an automated, integrated system with
a commitment to excellence if timely delivery of accurate data and information is to be guaran­
teed, as well as efficiency in the handling of accounting tasks. It is advisable to work on the
enactment of legislation requiring government agencies to apply the calculation of government
service costs while bolstering this legislation with a comprehensive guide for calculating the costs
of government services prepared by specialized researchers to assist cost accountants work in
a systematic, institutional, and consistent manner at the state level in a manner that ensures the
achievement of the concept of one government. The findings of preceding investigations (Choi,
2021; Lapuente & Van de Walle, 2020; Sjödin et al., 2020) support these findings. Therefore, H5 is
approved.
6. Conclusion and suggestions for future research
The Jordanian government has made it clear in recent years that it is interested in fixing the cost
of public service delivery. Various agencies within the government are being asked to improve the
effectiveness of their services. Currently, the King Abdullah II Center for Excellence evaluates
government agencies against the criteria set out in the King Abdullah II Government Excellence
Awards. The most prominent award categories for excellence deal with services and the methods
of delivering those services. Because of the importance of determining government service spend­
ing, the service efficiency (cost) criterion is considered one of the highest requirements. The King
Abdullah Center for Excellence aims to draw the attention of Jordan’s public sector decisionmakers to the importance of improving service efficiency. Lower prices because it puts a heavy
strain on the state budget. Furthermore, it emphasizes the need for accurate estimates of
government service expenditures by allowing the Jordanian government to: supplying sound
judgment components for budget negotiations with the federal government, nations, and other
organizations who give loans, grants, and financial resources to sustain the financial system.
●
assisting government organizations in achieving their primary goals of assessing service costs and
finding high-priority areas for improvement in service delivery operations, particularly high-cost
procedures and activities.
●
ensuring knowledge of the mechanisms governing the evolution of service costs and, consequently,
of the degrees of improvement or degradation in the management efficiency of public institutions,
in order to adopt the necessary steps.
●
evaluating the evolution of the costs incurred for the production of goods or the supply of services to
complement and enrich the analysis conducted on the physical-financial execution of the budget.
●
enhancing and broadening external and budget system-governing body public management
oversight.
●
presenting its financial statements in a way that is suitable and compliant with international public
sector accounting standards, which includes revealing its service-related expenses, which make up
the majority of the budget, in a way that is compatible with accounting principles.
To know what works and what doesn’t, the Jordanian government needs to be able to compare
results and better understand the costs associated with providing public goods and services.
Therefore, you need information about whether the resources you have invested in are delivering
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https://doi.org/10.1080/23311975.2022.2150119
the desired success. For example, why some schools, hospitals and prisons are more expensive to
serve than others and whether the results achieved by these units meet the needs and expecta­
tions of the public. You have to judge.
For accurate and accurate knowledge and control of expenses. Facilitating the costing of
government services in an appropriate and broadly applicable manner, not limiting the work to
previous or current methodologies and theoretical frameworks, as it has so far proven to be wholly
ineffective Creating a model or mechanism is essential. The main purpose of service cost calcula­
tion is to increase the efficiency and economics of service. If new mechanisms were developed and
used to properly account for the costs of government services, this would facilitate the review and
improvement of service delivery processes, as well as increase the level and effectiveness of
financial management in the public sector.
The pandemic has changed cost structures and created a range of new goods and services. As
a result, they are no longer profitable. This fact allows companies to change their pricing strate­
gies. Reimagine your production processes and reshape your service portfolio. Transform supply
networks and redesign goods and services. Pay attention to what benefits you and even adjust
your tactics. This is now also true for the public sector, especially against the backdrop of
privatization and outsourcing of public services to the private sector.
Determining the provision and pricing of government services that form the basis of government
budgets. Considering that services are the biggest financial burden, the most well-known general
techniques for creating a cost accounting system currently accessible, which will assist us in
creating a system in the future that is expressly intended for the public sector and also applicable
to service businesses as follows:
●
In order to diagnose something, we need to be aware of the entity, its mode of operation, and the
setting in which it was created, whether public or private.
●
That is required to understand the official requirements for cost information as well as the demands
of managers, shareholders, and directors.
●
That must identify the cost objects and construct the cost centers based on the diagnostic and the
information needed. Using data from cost accounting, determine the registration, distribution,
integration, comparison, and reporting processes. Accounting dynamics
●
Creating thorough cost analysis reports, in general, by processes, at the balance point, for fixed and
variable costs, and reports compared to revenue, as well as gathering data on profitability by
operation, customer, manufacturing line, service, etc.
●
providing input on the system to enable further improvement.
●
Implement the changes and handle the data in the cost accounting system.
Based on the findings of study, it is now urgently necessary to estimate the costs of government
services. Governments from Dubai, Australia, New Zealand, and other nations are among those
working on this. This significance results from the contemporary rivalry between the public and
private sectors in the provision of numerous services, particularly in industrialized nations. In
addition, several nations outsource their services to the private sector in quantities that don’t
reflect the true cost of providing public services. A predetermined fee for each transaction,
however, is successful in attempting to reduce the sector. After learning from its mistakes, it
went back to work on more precise cost estimations for government services, notably the Diamond
Project for Dubai. Therefore, in order to accurately determine the costs of its services, comply with
international accounting standards for the public sector, and produce value-added outputs that
help increase the financial efficiency of the public sector, every government in the world must
meet the following fundamental requirements:
●
a highly adaptable, contemporary, and sophisticated accounting system that is linked and inte­
grated with other systems.
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●
All service delivery processes and activities are defined by an integrated and automated processes
management system.
●
a manual or comprehensive description of the services offered and how they interact with other
internal or external services provided by other government entities.
●
A skilled and knowledgeable non-traditional human cadre equipped to handle the demands and
advancements associated to figuring out the price of government services.
●
In order to achieve the primary goal of calculating service costs, which is to increase service
efficiency, an integrated system for innovation in services is provided as an added value. Through
this system, all ideas and suggestions related to developing services and improving service delivery
processes are listed.
In the conclusion, there are still a lot of academics and professionals working hard to advance this
field, which we support and urge to continue. We also anticipate that these experts will offer
methodical, scientific solutions that aid accountants in properly and precisely estimating the
expenditures of government services.
Funding
The authors received no direct funding for this research.
Author details
Obiedah Mohammad Alqudah1
E-mail: obaidah2@hotmail.com
Noorhayati Mansor2
E-mail: nhayatimansor@unisza.edu.my
Safrul Izani Mohd Salleh3
E-mail: safrulizani@unisza.edu.my
1
Ph.D. Candidate in Accounting, Faculty of Business and
Management, Universiti Sultan Zainal Abidin
Terengganu, Malaysia.
2
Professor of Accounting, Faculty of Business and
Management, Universiti Sultan Zainal Abidin
Terengganu, Malaysia.
3
Accounting, Faculty of Business and Management,
Universiti Sultan Zainal Abidin Terengganu, Malaysia.
Disclosure statement
No potential conflict of interest was reported by the
author(s).
Correction
This article has been republished with minor changes.
These changes do not impact the academic content of
the article.
Citation information
Cite this article as: Difficulties in accounting system
implementation for service costs in the public sector,
Obiedah Mohammad Alqudah, Noorhayati Mansor &
Safrul Izani Mohd Salleh, Cogent Business & Management
(2022), 9: 2150119.
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PRACE NAUKOWE UNIWERSYTETU EKONOMICZNEGO WE WROCŁAWIU
RESEARCH PAPERS OF WROCLAW UNIVERSITY OF ECONOMICS AND BUSINESS
2019, vol. 63, nr 9
ISSN 1899-3192
e-ISSN 2392-0041
Grzegorz Lew
Rzeszow University of Technology
e-mail: lewgrzes@prz.edu.pl
ORCID: 0000-0002-0067-8562
USE OF COST ACCOUNTING
IN COST MANAGEMENT
WYKORZYSTANIE RACHUNKÓW KOSZTÓW
W ZARZĄDZANIU KOSZTAMI
DOI: 10.15611/pn.2019.9.14
JEL Classification: M41, O16
Summary: Cost accounting is the basic accounting tool used to optimize costs in companies.
The evolution of accounting also concerned changes in cost accounting. In the second half of
the twentieth century many new cost accounting methods were created, the main task of
which was to support managers in increasing the financial performance of companies. The
aim of the article is to analyze the possibility of using different cost accounting by companies
to manage their customers’ costs. The main thesis is that companies are aware of the possibility
of using management accounting tools to manage their customers’ costs. In the article
literature studies and the results obtained from the responses to the questions in the
questionnaire were used. The study was conducted among 71 companies in south-eastern
Poland. Based on this research, it was determined that, despite the possibility of using different
cost accounting methods, Polish companies prefer to use traditional cost accounting to manage
their costs.
Keywords: cost accounting, finance, management accounting, cost management.
Streszczenie: Rachunek kosztów jest podstawowym narzędziem rachunkowości wykorzystywanym do optymalizacji kosztów w przedsiębiorstwach. Ewolucja rachunkowości dotyczyła
także zmian zachodzących w rachunku kosztów. W drugiej połowie XX wieku powstało wiele
nowych rachunków kosztów, których głównym zadaniem było wspieranie zarządzających
w zwiększaniu finansowej efektywności działania przedsiębiorstw. Celem artykułu jest analiza
wykorzystywania przez przedsiębiorstwa różnych rachunków kosztów do zarządzania
kosztami. Przy pisaniu artykułu wykorzystano badania literaturowe oraz wyniki badań
osiągniętych dzięki odpowiedziom na pytania zawartych w kwestionariuszu ankiety. Badania
przeprowadzono wśród 71 przedsiębiorstw południowo-wschodniej Polski. Na podstawie
tych badań określono, że mimo możliwości zastosowania różnych rachunków kosztów
zarządzający polskimi przedsiębiorstwami preferują wykorzystywanie do zarządzania
kosztami tradycyjnego rachunku kosztów.
Słowa kluczowe: rachunek kosztów, finanse, rachunkowość zarządcza, zarządzanie kosztami.
162
Grzegorz Lew
1. Introduction
Enterprises operate under the pressure of an increasingly competitive market and
growing customer demands. The consequence of operating in globalizing markets is,
on the one hand, a process of increasing the difficulty of managing such enterprises
and, on the other hand, easier access to the knowledge and experience of enterprises
from different regions of the world in solving increasingly complex decision-making
problems. Globalization also affects the flow of intellectual capital between
developed and developing countries, regions and enterprises. These phenomena
imply an increase in the level of advancement of systems enabling the effective
support of decisions taken by managers. There is also growing awareness among
managers of companies of the possibility of applying more complex methods of
managing particular functions or areas of these companies.
The evolution of corporate governance is to a large extent correlated with the
evolution of the systems, methods or tools supporting or enabling this evolution.
Among these systems, accounting plays an important role in which, also as a result
of evolution, two main subsystems have developed: financial accounting and
management accounting.
The aim of the article is to analyze the possibility of using different cost
accounting by companies to manage their customers’ costs. The main thesis is that
companies are aware of the possibility of using management accounting tools to
manage their customers’ costs. The article was written with the use of literature
research and the results of research obtained by responding to the questionnaire.
The research was conducted among 71 enterprises in south-east Poland.
2. Cost management
Cost accounting is a tool to measure the costs of doing business. The main
objective of the project is to provide information related to the costs of separate cost
objects, which are of interest to business managers. In order for cost accounting to
work properly, financial accounting procedures are used, often integrating it with
management accounting tools. One important feature of cost accounting is the
continuous and systematic collection of information on costs. Properly prepared
information is used to control costs, which allows to optimize their structure and
size.
Cost management is aimed at reducing costs, but in practice the possibilities of
cost reduction have many limitations and therefore cost reduction in most cases will
concern their optimization in relation to the effects achieved by incurring them.
The essence of cost management is to take actions that are to lead to the optimization
of incurred costs. This is done by increasing the efficiency and effectiveness of the use
of resources owned by the company [Nowak (ed.) 2006, p. 15].
Use of cost accounting in cost management
163
Modern cost management theories have their roots in, besides German or Anglo-American, Japanese economic practice and have been developed with the significant
participation of Japanese researchers (see [Howell, Sakurai 1992; Monden (ed.)
2000; Okano, Suzuki 2007]). In their considerations, they pay special attention to
planning the level, structure and dynamics of costs in the first stages of product life
or the initial links of the value chain, which results from the fact that decisions taken
at this stage largely determine the costs in subsequent processes taking place in
enterprises. Reducing costs in the initial phases of the sequence of actions gives the
most effective results.
In analyzing the Japanese solutions, A. Jarugowa presented the definition of cost
management as a process of continuous improvement, which supports the
development and application of appropriate management policy and procedures.
This process requires the development of a proper information system generating
relevant data on significant costs. This system should inform primarily about the
acquisition and use of resources so that the company can do it in the most efficient
way [Jarugowa, Nowak, Szychta 1998, p. 22].
In order to manage costs, it is necessary to identify the factors influencing their
formation. Using the Japanese experience, six stages of this process can be
distinguished [Jarugowa, Nowak, Szychta 1998, pp. 22-23]:
1) cost planning, this stage determines the costs incurred in subsequent periods,
2) formalization of plans in the form of specific, partial budgets, which should
result in allocating costs to the places and persons responsible for them,
3) determination of external relations influencing the costs incurred; this
concerns mainly the suppliers and the terms of their supplies,
4) acquisition of resources, this applies not only to those shown in the assets of
the company, but also to those used by the company on other terms,
5) use of resources,
6) emergence of a liability or payment for the acquired resources.
The main objectives of cost management depend on the specificity of the
company, the type of business, the strategy adopted and its competitive position.
The main objective is to improve the financial results of the company by increasing
the efficiency of the use of resources at the company’s disposal and improving the
course of activities carried out in the company.
When applying cost management in practice, it is necessary to have an adequate
set of information on the costs of involvement and the use of particular company
resources and activities. This information should be relevant for the needs related to
the achievement of specific company objectives, which are determined by the
adopted strategy of the company.
Business costs are identified, recorded and processed by the cost accounting
system, which is a source of information for cost management. The integration of
both systems must take account of the nature of the decision-making and control
situation and conditions of the company concerned.
164
Grzegorz Lew
To achieve this it is necessary to select and implement an appropriate cost
accounting model that will measure and report on costs. The cost accounting model
used should ensure that costs are allocated to the distinguished reference sites taking
into account their cause and effect relationship with the costs incurred. This will
create the conditions for shaping the costs at a rational level and enable the
implementation of measures resulting in their reduction [Nowak (ed.) 2006, p. 17].
3. Cost accounting
Cost accounting has long been recognized as the most important instrument for
managing companies [Jarugowa 1986, p. 7]. It is therefore necessary to build a client
cost accounting model that combines the most efficient (and therefore also the most
common in practical applications) features of management accounting tools.
There are different definitions of cost accounting in the literature. The authors
dealing with the subject of cost accounting present the following:
1) “generality of activities aimed at reflecting the processes of sourcing, production
and sales taking place in the enterprise, by including, grouping and interpreting in the
applied sections of the cost of own production and sales of the enterprise’s own work
products, measured quantitatively and qualitatively, for a certain period of time, in
order to obtain the most comprehensive information necessary to determine the results
and to manage the enterprise or its team” [Fedak 1962, pp. 8-9],
2) “all actions aimed at determining and interpreting in different sections and
interpreting the value of living and objectified labor inputs expressed in money,
performed in an enterprise during a specified period of time and with a specified
purpose” [Mała… 1971, p. 652],
3) T. Peche speaks of “the grouping of own costs […] in order to obtain a proper
picture of their structure, in each classification section” [Mała… 1974, p. 400],
4) “covers the measurement of costs, their current record, settlement according to
the places of origin, directions of activity and types of products or services, preparation
of unit cost calculations and financial reporting” [Hellwig (ed.) 1985, p. 23],
5) “cost accounting consists in examining and transforming, according to the
adopted model and standards, information on costs and revenues of past, current and
intended activities in order to support the management of the entity” [Jaruga (ed.)
2000, p. 7],
6) “cost accounting is defined as the measurement and delivery of financial and
other information relating to the acquisition and consumption of resources and
provides information for both financial and management …

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