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Impact of Strategic Cost Analysis on Accounting Information
Dr. Abubkr Ahmed Elhadi Abdelraheem
Associate Professor - Department of Accounting
Faculty of Managerial and Financial Sciences - Peace University – Sudan
ABSTRACT
This study handles impact of strategic cost analysis on to find new ways to reduce costs through the value
accounting information (field study on engineering chain and product life cycle, so this study examines
industries Companies - Khartoum State), the study the impact of strategic cost analysis on accounting
aimed to understand the concept of strategic cost information that helps in costs making decisions.
analysis and the concept and characteristics of
accounting information. The study test one hypothesis 2. Study Problem
following: There is a statistically significant
Problem of study is following questions:
relationship between the application of strategic costs
analysis and accounting information and hypothesis is What is the impact of strategic cost analysis on
achieved. The study reached some findings from accounting information?
which: strategic cost analysis contributes to the Is there a statistically significant relationship
provision of appropriate information for decision between value chain analysis and accounting
making, Strategic cost analysis contributes to information?
reducing the costs of different activities, strategic cost Is there a statistically significant relationship
analysis contributes to providing information about between strategic position analysis and
activities that do not add value to the product, the accounting information?
study recommended following: care should be taken Is there a statistically significant relationship
to apply the types of strategic cost analysis to obtain between cost drives and accounting information?
product information at all stages, must be applied the
types of strategic cost analysis with modern cost 3. Objectives of study
methods to reduce the total cost of production.
Understand the concept of strategic cost
Keywords: Strategic Cost Analysis, accounting
analysis and the concept and characteristics of
information.
accounting information.
1. Introduction Identify types of strategic costs analysis
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International Journal of Trend in Scientific Research and Development, Volume 1(4), ISSN: 2456-6470
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Strategic position analysis Main characteristics:
The strategic position refers to the company's position Relevance: The ability of information to make a
in its competitive environment, and there are three change in the direction of a particular user's decision.
fundamentals that determine the strategic position is To make the information relevant, the following
the basis of product synthesis (product diversity), the secondary characteristics are required: -
basis of needs (the differentiation between all
Consumer needs), customer access basis (distribution Timeliness: Provide accounting information in
methods (Abdul Sattar, 2009)10. a timely manner before losing its usefulness or
ability to influence the decision-making
Cost driver’s analysis: process.
predictive value of information: accounting
Cost factors are those factors that cause the cost of an information that has the greatest predictive
activity to occur and explain the causal relationship capacity is more suitable for information
between the output of the activity and its consumption users.
of its own resources, such as the degree of energy Reclassification capability: Appropriate
utilization, the number of times of transport service, accounting information has a retrospective
maintenance hours and the number of direct working value when it has the ability to change or
hours. Operational cost, procedural cost drivers, correct current or future expectations.
structural cost factors, general cost drivers (Salem,
2009)11. Reliability: Reliability is meant to correct information
as a basis on which the decision-maker can rely on
Accounting information and characteristics prediction. This property consists of three sub-
characteristics:
Accounting information is all quantitative and non-
quantitative information relating to economic events The property of verifiable: in the sense that the
that are processed and reported in the financial information can be validated.
statements, operating plans and reports used internally The property of neutrality and impartiality:
(Ziad,2010)12. any lack of bias in the process of obtaining
information or not intentionally configured
It is not necessary that the accounting data be
can serve a user without another.
converted to information processed and operated only,
The property of honesty in expression: means
but became to achieve two conditions until the
a high degree of congruence between
accounting data become information (Abdul
measurements and phenomena to be reported.
Razzaq,2003)13.
Secondary characteristics:
The resulting information should reduce the
degree of uncertainty of the decision - maker, Stability property: is the application of the
by reducing the number of alternatives same accounting procedures on similar events
available to the decision - maker. concepts One project from time to time
The resulting information should increase the Symmetry and comparability: Symmetry
knowledge of the decision-maker, in the case means the use of the same procedures and
of failure to achieve the first condition, where measurement concepts and the same methods
it can benefit from the knowledge added to of disclosure between different enterprises.
make other decisions in the future .In order
for the accounting information to achieve its 6. Results & Discussion:
objectives, which is the primary objective of
the decision-making user, it is necessary to The study sample includes Engineering Industries
have a set of characteristics that can be used as Companies - Khartoum State. The researcher
a basis for assessing the quality of the distributed (150) questionnaire forms among some of
accounting information. The characteristics of the workers in the field selected randomly (139)
the accounting information can be divided into Forms were collected as 93%. (SPSS) used for
the following (Nihad,2011)14: analyzing the relevant data. The researcher used
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Available Online @www.ijtsrd.com
International Journal of Trend in Scientific Research and Development, Volume 1(4), ISSN: 2456-6470
www.ijtsrd.com
statistical methods following: median, and Chi-Square test the hypothesis.
Table (1): Through table (1), the level of significance Chi-Square test (.000) less than the significance level
0.05, This shows that There is a statistically significant relationship between applied the strategic costs analysis
and accounting information., therefore the hypothesis is achieved.
Table (1)
336
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