BULE HORA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

Course title:- Advanced Cost and Management

Accounting

Group Assignment Article review on In the article ‘Adoption of Cost and

Management Accounting Techniques: Survey Study on Selected Manufacturing
Firms in and Around Addis Ababa, Ethiopia’ Mohammed Abdulselam and Mr.
Bekana Dembel, February2, 2020

By
1. Tigistu Gizaw
2. Zegeye Tiruneh
3.Fasika Selemon
4. Eyerusalem sisay
5. Jemal Umer
6.Mihret Balcha

February 3, 2022

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Contents

1. INTRODUCTION....................................................... Error! Bookmark not defined.

1.1. Problem statement.............................................................................................. 1

1.2. Objectives............................................................................................................ 1

2. Methodology ............................................................................................................. 1

3. Critiques .................................................................................................................... 2

3.1. Strength of the Author ....................................................................................... 2

3.2. Weakness of the Auhtor .................................................................................... 2

4. Discussions ................................................................................................................ 2

5. Conclusion................................................................................................................. 3

6. Recommendation ...................................................................................................... 3

References ...................................................................................................................... 5

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Citation

Title of the article: Adoption of Cost and Management Accounting Techniques:

Survey Study on Selected Manufacturing Firms in and Around Addis Ababa,
Ethiopia

Authors: Mr. Mohammed Abdulselam*, Mr. Bekana Dembel

Journal: International Journal of Scientific and Research Publications

First published year: February 2020

Available online: 26 April 2021.

Page number: p. 98-112

Volume no : Vol. 10.

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INTRODUCTION

In the article ‘Adoption of Cost and Management Accounting Techniques: Survey

Study on Selected Manufacturing Firms in and Around Addis Ababa, Ethiopia,
Mohammed Abdulselam and Mr. Bekana Dembel, examined the degree of
Adoption of cost and management accounting techniques in Selected
Manufacturing companies in and around Addis Ababa, Ethiopia. Further, factors
affecting the adoption of those techniques were examined. Finally, the perceived
effect of adopting these techniques on the company’s operating efficiency and
financial performance were evaluated.’

The Author suggested that, there was significant effect of adopting cost and
management accounting techniques on sample manufacturing firms operating
efficiency and financial performance. The author further suggested that,
management of Ethiopian manufacturing firms should give due consideration for
adoption and implementation of sophisticated cost and management accounting
techniques since it helps them to compete successfully and improve overall
performance of their organization.

According to The Authors modern cost and management accounting techniques

such as Activity based costing/management, Target costing/management, Just-in
time, Life-cycle costing, and Kaizen costing or management, should be adopted
by manufacturing firms for purpose of reducing and managing their cost.

While this article produced significant results showing essentiality of Cost and
management accounting tools are essential to exert control over cost and to
appraise management performance in different segments of an organization
particularly in manufacturing organizations there are limitations related to the
generalizabilityoFresults

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1.1. Problem statement

As the idea of the authors, there are no sufficient studies which directly related to
the problem under study. The authors also tried to identify that, several studies
have been conducted on significance of Cost management tools for decision
making in Ethiopian private limited manufacturing companies.

1.2. Objectives

As stated by the authors in the article, the aim of the study was examining the
adoption and practice of cost and management accounting techniques in the
operation of Ethiopian selected manufacturing firms and the authors clearly
identified both general and specific objectives in the study.

2. Methodology

In the article, the authors used descriptive and explanatory survey design, but
didn’t indicate limitations of the research design. Since descriptive and
explanatory survey design is appropriate for this study. The data was collected
from both primary and secondary sources.

The source of primary data were company’s finance vice president, finance
officers, budget and cost department employees who have the understanding
regarding the subject under study. The secondary sources of data were obtained
from published articles in business journals, books, thesis, company reports and
publications, websites and related documents.

The researcher explained they preferred this type of data because respondents
may not have time and willingness to answer all question specially regarding
financial performance effectively

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In addition, in the article Abdulselam and Mr. Bekana Dembel, clearly identified
source of data, Population and Sampling Techniques, the method in which the
data was Collected, and Method of data analysis.

The study conducted using a descriptive and Explanatory approach, data

collected by survey questionnaires were analyzed by using Statistical Package for
Social Sciences (SPSS V-20). The SPSS output was further presented by using
Graph like; bar, pie chart and histogram and Table. The discussion and analysis
made for these results by using descriptive and inferential statistics.

3. Critiques

3.1. Strength of the Author

The authors clearly provided an adequate statement of the problem, clearly

identified the study objectives, research methodology, stated somewhat study
significance, method of data collection, sources of data collection, the method in
which data was analyzed, results and discussion and tried to indicate conclusion
and recommendations. And again the authors indicated area of future research.

3.2. Weakness of the Author

When we see the weakness of the authors in this article, small sample size was
used. Sample used only from manufacturing firms in and around Addis Ababa.
So, the result cannot be generalized for all manufacturing firms in the country.
And also the method of data collection in this study was only Structured
questionnaire hence data validity might be low

4. Discussions

The authors suggested that, Company employee’s level of education, Availability

of management and Availability of specialist, and Company size and
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technological advancement are the most significant factors affecting the adoption
of cost and management accounting techniques in manufacturing firms in and
around Addis Ababa, Ethiopia.

5. Conclusion

The authors concluded that, Company size, employees’ experience, Age of the
firms, technological advancement and competition among the firms are
identified as influential factors that positively and significantly affect the
adoption of cost and management accounting techniques in the manufacturing
firms.

6. Recommendation

Based on the summary of major finding of the study, the researcher forwards the
following points as recommendations for manufacturing firms included the study
area;-

• Manufacturing 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.

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 • It is better for manufacturing companies in study area to have separate
cost and management accounting department since, the execution of
theory in to practice become easy and they become competent firms. The
segregation of duties is the core factor of success.
• Manufacturing firms included in this study area shall possibly create
strong relationship with other manufacturing firms specially with those
operated for long period of time because information regarding those
firm’s experience about significant cost and management accounting
techniques for making purposeful decision can be easily communicated. 
The Researcher recommends those manufacturing firms in and around
Addis Ababa, to give emphasis for improving product quality and setting
appropriate price since the achieved output would noticeably profit.
• Hiring experienced human power would be better for successful
implementation of cots and management accounting tools in the operation
of manufacturing firms in and around Addis Ababa. Because the finding of
this study revealed the positive and significant influence of Employee
experience on degree of Cost and management accounting techniques
adoption and implementation.

We have observed that the article directly relates to the topic of our course and it
significantly contributes in enhancing our knowledge about Cost and
Management Accounting Techniques.

Finally in our opinion small sample size used was the main limitation or
weakness of this article. On the other hand as a strength Most of the references
are relevant to the problem under investigation and help to inform the reader of
the study’s purpose.

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References

[1] AborYeshmin F, &. Fowzia R. (2010). Management Accounting practice: A

Comparative Analysis of Manufacturing and service Industry. ASA University
Review.

[2] Tessema, G. (2012). Significance of Cost Management Techniques in Decision

making in Case of Ethiopian Private Manufacturing Companies. International
Journal of Research in Commerce, IT and Management., pp.1-9.