1. BY : NURUL NADIAH BT. MOHAMD SALEH (A143299) PERAKAUNAN KOS (SET 3)

2. EPPA2033 PERAKAUNAN KOS (SET 3)

3. INTRODUCTION WHAT IS ACTIVITY BASED COSTING? Activity-based costing (ABC) is a costing methodology that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. This model assigns more indirect costs (overhead) into direct costs compared to conventional costing.

4. CONTENT THE PURPOSE OF ARTICLE? Examines the significance of relationship between the diffusion activity-based costing and the level or importance of attributes of innovations on decision (s) to implement (or not) accounting innovation.

5. FACTORS HINDERING THE DIFFUSION OF ACCOUNTING CHANGES? 1. Lack of suitable software programs. 2. Cost of system set up and its implementation. 3. Cost of maintaining and collecting cost information. 4. Lack of information on available costing techniques. 5. Management policies and priorities. 6. Lack of appropriate cost accounting skills. 7. Low benefit arising from change compared with higher required expenditure. 8. Lack of confidence in the ability of new accounting techniques. 9. Adequacy of current system. 10. Employee resistance. 11. Inadequacy of the current system not being important enough to require change in the costing system. 12. External financial or cost accounting standards or practices.

6. CONCLUSION First interpretation: attributes of innovation are fundamental to the decision to adopt accounting innovations, but when such decision was made, not all attributes of innovation continue to be as important as they were before. Second interpretation: there is possibility that ABC is unable to provide a great deal of superiority over traditional accounting techniques in terms of most of its attributes such as ‘time saving’, easiness in doing the job’, ‘easiness in implementation’ (and other attributes which are not significantly associated with the diffusion of ABC).

7. If there is something wrong with ABC which had lead to its slow diffusion it could be its attributes in terms of having insufficient benefits over traditional techniques (e.g. in terms of cost and benefit analysis).