analysis and conclusion

Abstract 3

Bibliographic Citation

Almusawi, E., Almagtome, A., & Saheb Shaker, A. (2019). Impact of Lean Accounting Information on the Financial performance of the Healthcare Institutions: A Case Study. Journal of Engineering and Applied Sciences, 14(2), 589–599. https://doi.org/10.36478/jeasci.2019.589.599

Authors

Enaam Almusawi, Akeel Almagtome, Ameer Saheb Shaker

Research Concern

There is very little literature correlating lean accounting and financial performance indicators, discussing relationship between value stream costing and financial performance in healthcare setting. This research is intended to fill this literature gap.

Research Purpose Statement

The purpose of the research is to examine the impact of lean accounting on financial performance of healthcare institutions.

Precedent Literature

According to Momoy et al., 2012; “Lean accounting is the philosophy of recognizing and eliminating the non-value added activities within the lean production system in order to reduce the production costs”. Furthermore, lean accounting was created to assist businesses in overcoming the issues associated with typical costing accounting systems in terms of supplying accounting information for decision-making. According to Haskin, 2010; “Lean accounting provide different cost reports over value stream on the basis of separating the value added and non-value added activities” which can be very useful for managers in identifying value added costs and non-value added costs. Womack and Jones (1996) suggests that the structure of healthcare processes on patient’s perspective through increasing service value and decreasing lead time

Methodology

The study used a case study approach and Alameer Private Hospital was chosen for this case study. The Orthopedic center of the Alameer Private Hospital was chosen as the value stream for this case study. Semi structured interviews and APH records, as well as the hospital's database for the financial year2017, are the primary sources of data. Lean accounting procedures, pricing strategies, lean accounting information, and cost reports are the four primary topics covered in a semi structured interview. Executive directors, clinical center managers, and management departments are among those who took part in these interviews. The hospital’s financial performance is measured using a quantitative methodology with two measurement dimensions: profitability and cost.

Instrumentation

The orthopedic center is considered the unit which create value stream for this study. Two types of data sources were used to examine the current state of the costing system in APH: financial reports from APH for the year 2017 and interviews with hospital administration. A value stream analysis is done on the orthopedic center. Four medical units: Patient data unit, Medical inspection unit, Patient nursing unit and Medical support unit were created as four value streams in value stream mapping.

Findings

Based on the cost information on patient data unit (Value stream A) there were reduced costs in this value stream after eliminating all wastes and idle capacity costs. Medical inspection unit (Value stream B) also have reduced costs, after value stream analysis it was found out that there were several non-value added activities like unnecessary medical staff, unused medical devices and extra medical materials and supplies which are eliminated. Value stream analysis of Patient nursing unit (Value stream C) revealed 3 non value added elements and total costs can be reduced by eliminating these. The medical support unit (Value stream D) also has reduced costs relating from waiting time wastes, extra staff and empty beds.

Conclusions

Based on the results from this research we can conclude that implementing value stream mapping reveled the real costs of the value streams. Implementation of lean accounting tool Value stream costing has led to eliminate waste and increased the efficiency and quality of healthcare processes.

Suggestions for Further Research

The finding from these study is specific to private hospitals in Iraq but can be implemented in other hospitals in other countries to see if quality of healthcare process can be improved for hospitals in other countries as well.

Abstract 4

Bibliographic Citation

Emeakponuzo, D., Eno, J., & Etim, O. (2018). Lean Accounting and Waste Management in Brewery Industry in Nigeria. Advances in Research, 15(1), 1–11. https://doi.org/10.9734/air/2018/40484

Authors

Daferighe, Emmanuel Emeakponuzo, James, Emmanuel Eno and Offiong, Patience Etim

Research Concern

Conventional cost reduction techniques were not always successful in reducing costs. According to Boston Consulting Group application of lean accounting principles and tools can reduce process wastes and costs.

Research Purpose Statement

The purpose of the research is to examine the impact of lean accounting on waste management in Brewery industry in Nigeria.

Precedent Literature

Maskell B, Baggaley B (2006) describes lean accounting to have tools which include “simple accounting, visual performance measures, value stream boards, value stream costing, target costing, visual management, and box scores for decision making”. Kennedy and Brewer (2005) introduces two lean accounting concepts value stream cost analysis and lean income statement both can be very useful in reveling non value added costs which are otherwise hidden in traditional accounting methods. Woehrle and Abou- Shady (2010) says that most companies trying to eliminate waste have found that lean philosophy to be a very promising solution.

Methodology

The researchers used survey research design for this study. A results from a structured questionnaire was used as primary data for the study. A total of 50 copies of this questionnaire was distributed to senior and intermediate level managers of Champion Breweries. “Ten copies each to staff of Production, Research & Development, Purchasing, Marketing, and Accounting & Finance Departments”. The data is then analyzed using Chi square statistic at 5% significance level

Instrumentation

A semi structured questionnaire was used for this study. 50 copies of this questionnaire was distributed to senior and intermediate level managers of Champion Breweries. “Ten copies each to staff of Production, Research & Development, Purchasing, Marketing, and Accounting & Finance Departments”. The responses for these questions are five point Likert scale response options as follows: Strongly Agree, Agree, Disagree, Strongly Disagree and Undecided.

Findings

All 50 copies of questionnaire were returned back which give a response rate of 100%. Questions 4, 6, 8, 10 and 12 are the questions which evaluates the awareness and usefulness of lean accounting in managing waste in brewery industry in Nigeria. The computed Chi- Square statistic for this is 144.355 which is greater than critical chi-square value at 5% significance. Therefore, the level of awareness and usefulness of the principles of lean accounting in managing waste is very low in brewery industry in Nigeria. The results also indicate that 58.5% say that long implementation period is due to lack of adequate skills. Based on results from all questions which evaluates the influence of lean accounting in waste management since the Chi square value computed is greater than the critical chi square value the basic assumption that lean accounting significantly influence waste management in brewery industry in Nigeria was rejected.

Conclusions

Based on the results from this research we can conclude that there is low awareness and usefulness of principles of lean accounting in waste management in brewery in Nigeria and lean accounting does not significantly influence waste management in Nigerian brewery industry based on the current practices in the industry.

Suggestions for Further Research

The authors also suggest that the results attained are due to very little knowledge of lean accounting tools in the brewery industry. The author suggests to train the staff on application of these lean tools. A similar study can be done after training all the staff to see if the results might change now that the staff is trained on these tools.

Abstract 5

Bibliographic Citation

Kadhim, H. K., Kadhim, A. A. H., & Azeez, K. A. (2020). The Integration of Lean Accounting and Activity-Based Public Budgeting for Improving a firm’s Performance. International Journal of Innovation, Creativity and Change, 11(5), 555–567.

Authors

Hatem Karim Kadhim, Hatem Karim Kadhim and Karrar Abdulelah Azeez

Research Concern

In the current production environment, there are no traditional systems of performance evaluation based on traditional cost accounting indicators and measurements to meet the criteria of analyzing and improving the firm's performance. Lean production makes it easier to apply lean accounting and activity based public budgeting to increase the efficiency of its performance review and knowledge of the firm's strengths and weaknesses.

Research Purpose Statement

The purpose of the research is to see if it is possible to use lean accounting and activity-based public budgeting to overcome the weaknesses in measuring the firm's performance and to see if it is possible to improve the efficiency of performance evaluation by combining lean accounting and activity-based public budgeting.

Precedent Literature

Amusawi, Almagtome & Shaker, 2019 and Lawrence, 2005, 18 suggests that lean is all about trying to find ways and methods that less wasteful and less time consuming to create value for customers. Maskell & Baggaley, 2006 suggests that it is important for a firm to have relevant financial information to decision that will lead to increased profits and lean tools like value stream mapping and box scores can be very useful in achieving this. Horngren et al,2012 defined lean accouting as “The method that supports the creation of value for customers by calculating all costs of value streams, rather than calculating the costs of specific products or individual departments and thus eliminating all kinds of waste in activities”

Methodology

The hypothesis of the study is that integration of lean accounting and activity based budgeting leads to improved efficiency indicators of company’s performance based on lean manufacturing methodology. The Cement Factory of Najaf, a public sector corporation was used for the sample which has 55 distributed enterprises among its accounting, administrative, technical, engineering, and production designers. The application time for the questionnaire is from October 10th to December 12th, 2018. The researcher used Likert criterion as responses for the questionnaire to test the research hypothesis.

Instrumentation

A semi structured questionnaire was used for this study. The responses for this questionnaire are Likert criterion. The Cement Factory of Najaf, a public sector corporation was used for the sample which has 55 distributed enterprises among its accounting, administrative, technical, engineering, and production designers. Hypothesis testing was done using SSPS after calculating a set of statistical statistics that includes the arithmetic mean, standard deviation, coefficient of variation, and percentage weight.

Findings

A total of 12 questions were used and general response rate for the questions is 80.528% with a weighted average of 4.026. The weight percentage for most questions exceeded 70%. The calculated T value for all the questions is greater than the tabled T value and 54 degrees of freedom and at a significance level of 5%. Therefore, we fail to reject the research hypothesis that integration of lean accounting and activity based public budgeting.

Conclusions

Based on the results from this research we can conclude that integrating lean accounting and activity based public budgeting will lead to financial and non-financial information which can used to improve performance evaluation efficiency.

Suggestions for Further Research

The authors also suggest to have a data base to collect all information to apply lean accounting and activity based public budgeting and reevaluate to see if these financial and non-financial information can help to improve performance.

Abstract 6

Bibliographic Citation

Khalil I, A.-D., & A. Shehadeh, M. (2019). ROLE OF LEAN ACCOUNTING IN REDUCTION PRODUCTION COSTS IN JORDANIAN MANUFACTURING CORP. International Journal of Accounting Research, 4(2617-9954), 36–49. https://doi.org/10.12816/0052845

Authors

Prof. Khalil I. Al-Dulemi and Mohammad A. Shehadeh

Research Concern

With the advancement and progress in industries due to industrial revolution in order to compete with other industries it is important to make right decisions in management accounting and management business. Modern accounting systems like lean accounting systems are very useful for this as they can identify activities which add value and can be used to remove activities which do not add value.

Research Purpose Statement

The purpose of the research is to determine the role of lean accounting in Jordanian Manufacturing Corporation's cost-cutting efforts.

Precedent Literature

Samad et. al. (2017) proposed that modern accounting methods like lean accounting can be very useful in eliminating the activities which do not add value which cannot be done with traditional accounting systems. He also suggested that traditional accounting methods do not fit lean production which a lot of companies are now moving to. Hijazi (2015) recommended “Jordanian industrial corporations to focus on a lean accounting method to increase the profits instead of using the traditional accounting techniques”. Pentlickl (2014) suggested that organizations should use lean accounting at all stages of productivity.

Methodology

The researchers did hypothesis testing at 95% confidence with four different null hypotheses:

“H01-1: there is no statistically significant role at the level of function (a ≤0.05) for value principle in reducing production costs in Jordanian Manufacturing Corporation.

H01-2: there is no statistically significant role at the level of function (a ≤0.05) for value steam principle in reducing production costs in Jordanian Manufacturing Corporation.

H01-3: there is no statistically significant role at the level of function (a ≤0.05) for flow principle and pull principle in reducing production costs in Jordanian Manufacturing Corporation.

H01-4: there is no statistically significant role at the level of function (a ≤0.05) for continuous improved "Kaizen" in reducing production costs in Jordanian Manufacturing Corporation.”

Researchers sent 280 questionnaires with an average of 5 questionnaires to each company. SPSS statistical package was used to calculate the descriptive statistics, stability test of questionnaire and t- test for hypothesis testing.

Instrumentation

Questionnaires was sent to 56 corporations. The managers of these firms' departments, divisions of finance, production, human resources, information technology, sales, marketing, procurement, and supply were used for this study.

Findings

Out of 280 questioners, 242 were retrieved and 227 of those can be analyzed, 15 questionnaires cannot be analyzed because they were incomplete. Cronbach’s Alpha statistic was used for stability testing. The alpha values of all the study values were greater than 0.06 indicating that the paragraphs of the study instrument are reliable.

For the first hypothesis testing the p value is 0.000 which is less than 0.05, hence we reject the null hypothesis: there is no statistically significant role at the level of function (a ≤0.05) for value principle in reducing production costs in Jordanian Manufacturing Corporation.

For second hypothesis testing the p value is 0.000 which is also less than 0.005, hence we reject null hypothesis: there is no statistically significant role at the level of function (a ≤0.05) for value steam principle in reducing production costs in Jordanian Manufacturing Corporation.

For third hypothesis testing the p value is 0.000 which is smaller than 0.005, hence we reject null hypothesis: there is no statistically significant role at the level of function (a ≤0.05) for flow principle and pull principle in reducing production costs in Jordanian Manufacturing Corporation.

For fourth hypothesis testing the p value is 0.000 which is smaller than 0.00, hence we reject null hypothesis: there is no statistically significant role at the level of function (a ≤0.05) for continuous improved "Kaizen" in reducing production costs in Jordanian Manufacturing Corporation

Conclusions

Based on the results from this research we can conclude that lean accounting principles can help reducing production costs in Jordanian manufacturing corporations. The results also suggest that flow of material and pull system are relatively more important than the principles of value stream.

Suggestions for Further Research

The study can be further extended to include more lean accounting tools like target costing, box scores, visual management and hoshin principles for budgeting and relative importance between these tools can be calculated which will be very useful for organizations.