Accounting For Manager

IMMA UNIVERSITY BUSINESS AND ECONOMICS
COLLEGES DEPARTMENT OF MANAGEMENT
MBA PROGRAM EVENING

Accounting for manager’s individual assignment on review literature in case of
Adoption of Cost and Management Accounting Techniques: Survey Study on
Selected Manufacturing Firms in and Around Addis Ababa, Ethiopia
BY
ANWAR JIHAD ABADIGA
SUBMITTED TO:
MENGISTU. (ASS. PROF.)
Date Aug 3 2021
SUMMARY OF THE ARTICLE
PURPOSE OF THE STUDY
  What are the adoption and practice of cost and management accounting techniques in the
operation of Ethiopian selected manufacturing firms for the last five years?
  What Factors affecting adoption and perceived effect of adopting cost and management
accounting techniques on those firm’s operating efficiency and financial performance?
OBJECTIVES OF THE STUDY
  To assess the adoption of cost and management accounting techniques in selected
manufacturing firms in and around Addis Ababa, Ethiopia.
  To investigate the factors affecting adoption of this techniques in selected manufacturing
firms of study area.
  To evaluate the perceived effect of adopting cost and management accounting techniques
on those firm’s operating efficiency and financial performance
DATA USED
  Both primary and secondary data is used in the study. Primary sources of data include
questionnaire, whereas secondary sources data was generated through a review of relevant
documents. Questionnaire is used to collect primary data and being the dominant tool of
collecting first hand data is developed to collect required data from selected respondents, survey
study instrument.
METHOD OF DATA ANALYSIS
  The relevant data after collection are processed and analyzed through the use of a
statisticalsoftware package called Statistical Package for Social Sciences (SPSS) and
coding/theming.SPSS was used, allowing the researcher to present the information in form of
tables and figures. The data from questionnaire will be sorted out and at the same time
information checked for completeness. Then, responses on the questionnaires are examined to
derive relationship amongvariables of financial information on adoption of cost and management
accounting and firm’s operating efficiency and financial performance. A descriptive data
analysis is chosen for its simplicity and clarity of presentation in drawinginferences. Average and
percentage computations employed for analysis purpose when it isnecessary.
FINDINGS, CONCLUSIONS, AND POLICY RECOMMENDATIONS
  According to the result analyzed in preceding chapter, 60 percent of manufacturing firms in
and round Addis Ababa city were manufacturer of food and beverages which are privately
owned followed by eight companies which are manufacturer of non -metallic products.
Manufacturer of rubber and plastics product found to be Small number of manufacturing firms in
and Around Addis Ababa, Ethiopia.
  This implies food and beverages are still dominant agro processing industries in Ethiopia as
well as in the study area (AACCSA, 2019).
  The finding also revealed nearly 68 percent of total respondent firms were owned by
domestic private and approximately 23 percent of respondent company was owned by public
(government). The remaining 6 companies were foreign owned firms. This shows current
environment encourages the participation of private investors in the manufacturing sector of
economy. As a result, there might be high competition among the sectors through implementing
productive tools, reducing and managing the cost of production, drafting new competitive
strategies and so, on. This rivalry leads to adoption of Cost and management accounting
techniques for overcoming and winning such stiff competition. Thus, according to Hilton, (2000)
the more the development of the market economy indicates the more the significance of the cost
and management accounting techniques adopted.
  To improve and enhance efficiency and financial performance, themanufacturing firms in
and around Addis Ababa city need to turn their face toward adopting of most sophisticated cost
and management accounting techniques because Cost and management accounting tools are
essential to exert control over cost and to appraise various organization’s performance in
different segments of an organization particularly in manufacturing organizations.
  Competition among manufacturing firms have to be encouraged since, competitive
environment enriched development of recent technologies like; cost and management accounting
practices which can be used to keep cost down, proper utilization of asset, generate reliable and
timely information and obtain continuous profitability and optimizing the value/wealth of the
firm.
THEORIES DISCUSSED IN THE PAPER AND HOW DO THEY COMPARE.
According to Garrison et al., (2010); managers use Management accounting information
to develop, communicate, and implement strategy. They also use management
accounting information to coordinate product design, production and marketing
decisions and to evaluate the overall company’s operating performance including their
employees. Management needs helpful cost management systems, employees who are
proficient in understanding some important cost terms and cost flows in organization,
proper handling of indirect cost and overhead allocation particularly in a manufacturing
environment that uses either job order or process systems. Additionally, Andreas,
(2013), Garrison et al., (2010), & Weygandt et al., (2008) introduced the use of
environmental and target costing, just-in time manufacturing, kaizen costing, and
benchmarking scheme to minimize the cost of making and keeping a product for a long
period of time. Likewise, their books highlighted and call the attention of using budgets
for planning and coordination functions, by way of determining the level of capacity-
related and flexible resources, managing the budgeting process, interpreting the
production plan, comparing actual and planned results, preparing periodic and
continuous budgeting, controlling discretionary expenditures and the role of budgeting in
service and not-for profit organizations.
The researcher Analyzed data regarding the purpose of Cost and management
accounting techniques after response from 65 usable questionnaires collected back
from manufacturing firms in and around Addis Ababa, for comparing the reality on the
ground with that of theoretical perception. Respondent firms were asked to answer the
purpose for which their companies apply those mentioned Cost and management
accounting techniques and their response were analyzed by using descriptive statistics.
The result was summarized by Frequency table that developed using SPSS V-20.
CONTRIBUTION OF WORK TO OUR COURSE
The management of organization is responsible for making various decision after
relevant information were provided by responsible bodies whose supported by Cost and
Management Accounting techniques adopted. For that reason, companies operating in
developing countries like Ethiopia are also liable for adopting and implementing cost
and management accounting tools which initially adopted by developed countries in
order to make effective and significant decision, Thus the article contribute practical
result for adoption of cost and management accounting on firms efficiency and financial
performance.
STRENGTHS AND WEAKNESSES OF THE PAPER
As Weakness
  The scope of this study was limited to investigating the degree of Adoption of Cost and
management accounting techniques and assessing factors affecting adoption of those tools based
on sample of 65 usable responses from manufacturing firms in and around Addis Ababa. So, the
result cannot be generalized for all manufacturing firms in the country. Further, there are
numerous cost and management accounting tools practiced by manufacturing firms over this
world but for this study only few of them were investigated. Additionally, the method of data
collection in this study was only structured questionnaire hence data validity, might be low.
There are only few factors affecting the adoption of cost and management accounting techniques
included in the model
As strength
  The article clearly stated that Abstract and Introduction which generalize and highlights the
purpose and objective of the article.
  The conclusion of the article relies on the research question.
  The paper used different and appropriate literatures as a base for its further study.
  The reference used in the paper clearly listed

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IMMA UNIVERSITY BUSINESS AND ECONOMICS

COLLEGES DEPARTMENT OF MANAGEMENT

MBA PROGRAM EVENING

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