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Volume :9 Issue : 34 1983      Add To Cart                                                                    Download

AN ANALYTICAL AND CRITICAL STUDY OF COST ACCOUNTING SYSTEMS IN KUWAITI ENTERPRISES

Auther : By: M. S. El-Attar and M. M. Khairy

 

          Over the past two decades, literature accounting has stressed the importance of moving away fro the traditional view that the main objective of Cost Accounting Systems lies in determining actual costs.  A considerable number of works in accounting testify to the important role of cost accounting systems in planning, decision-making, control, and motivation and performance evaluation.  Moreover, concerted efforts were made to extend the domain of cost applications to some service sectors such as: banks, insurance companies and public transportation firms.  The application of cost accounting systems has also induced to an interdisciplinary approach, which included some concepts derived from a number of other disciplines such as operation research, decision theories, information and communication theories and behavioural sciences.

          The main objective of this paper is to collect empirical evidence pertinent to understanding the nature of coast accounting systems actually used by Kuwaiti firms and the degree of their conformity with the current trends in accounting.  More specifically, the paper attempts to seek answers to the following questions:

1)    To what extent Kuwaiti enterprises have cost accounting systems?

2)    What are the main features of cost accounting systems actually applied by Kuwaiti enterprises?

3)    To what extent do these systems conform with the principles of cost accounting?

4)    What are the future trends in formulating cost accounting systems in Kuwait?

To answer the above questions, an empirical study has been carried out in 32 Kuwaiti enterprises using questionnaires, observations and interviews to determine whether Kuwait enterprises do have – if any – actual cost accounting systems, and to what extent do these systems comply with the principles of cost accounting, and to what extent have they been implemented and managed by qualified cadres. It has been found that 34.4% of the sample enterprises have cost accounting systems: a fact that may be attributed to the recent establishment of Kuwaiti enterprises.  Compliance with cost accounting principles has been partially supported together with a severe shortage in qualified personnel in accounting departments.  A number of recommendations were suggested in the conclusion, particularly as regards the necessity of adopting scientifically designed cost accounting systems, the employment of qualified and properly motivated personnel, the provision of in-service training programs, and computer facilities.  In addition, cost-benefit considerations should be taken into account at every stage of the application of cost systems.

 

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