Article Critique: Examining Product Costing System's Content Factors

This report is a critique of an article that investigates factors influencing the content and sophistication of product costing systems (PCS). The study aims to identify contextual factors affecting PCS features, contrasting with previous research often limited to contingency theory. The methodology employs both adoption/non-adoption of ABC systems and alternative proxy measures (APM) to assess the impact of various contextual factors on PCS choices, building upon the work of Al-Omiri and Drury (2007). Key findings reveal a positive correlation between cost system sophistication (CSS) and the significance of cost information, use of innovative management accounting techniques, competitive environment intensity, firm size, and JIT/lean production adoption. The critique highlights strengths such as the robustness of the methodology in testing contextual factors and addressing gaps in prior research. However, it also identifies limitations, including the lack of a measure for satisfaction with indirect cost allocation accuracy and potential biases from the inclusion of ABC adopters from management consulting firms. The report concludes by emphasizing the insights provided into factors influencing the degree of product cost accounting systems' sophistication and calls for further research, particularly at the business unit level, to enhance generalizability and applicability for management accounting students and practitioners.

Article Critique 1
ARTICLE CRITIQUE
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Article Critique 2
ARTICLE CRITIQUE
Introduction:
The main purpose of this study is to identify the factors that explicate the product costing
system’s content. The study arise from the backdrop that many previous studies have sought out
to explain the accounting system diversity by only adopting contingency theory to illustrate how
particular elements of accounting system are linked to a range of contextual factors/variables.
However, it is surprising that despite the substantial contingency-oriented studies being carried
out in relation to management accounting control system (MACS), little attention is given to
identify factors explaining the content of product costing system (PCS). It is even further
astonishing given the enormous amount of public provided to the development of increasingly
sophisticated product costing systems.
Summary
The main objective of the study was to determine the degree to which potential the
contextual factors affect the features of PCS. The method used both adoption/non-adoption of
ABC system used in previous studies and alternative proxy measures (APM) for PCS’
characteristics identification. The alternative proxy measures enabled the author to examine the
degree to which various contextual factors dictate the choice of the PCS (Al-Omiri and Drury
2007)). The main findings demonstrate that higher degree of cost system sophistication (CSS)
are positively correlated with significance of cost information, degree of use of additional
innovative management accounting techniques, competitive environment intensity, size, degree
of JIT/lean production techniques usage as well as kind of business sector. No correlation
between cost system sophistication and cost structure, diversity of product, IT quality was
detected (Al-Omiri and Drury 2007)).

Article Critique 3
Critical Examination
The main strength that distinguished this research from the previous is that it provided the
potential for testing contextual factors robustness utilizing various proxy measures for
identifying PCS characteristics. It has been able to solve the gap in the previous research which
has been inconclusive a well as unable to establish the strong connection between adoption of
ABC and such contextual factors identified in the literature which remain conducive to ABC
system adoption. This method permitted a more robust test of the correlations among predictor
variables and CSS unlike previous research to present a more convincing and persuasive research
findings supported through evidence explication. However, the researcher was also limited in a
number of areas. The questionnaire failed to include a measure of satisfaction linked to
satisfaction of respondents with accuracy of assigning the indirect cost to service or products
(Al-Omiri and Drury 2007)). The analysis was also biased by including ABC adopters drawn
from management consultant firm. This was inappropriate as ABC adoption rate as well as any
of contextual factors linked to ABC were likely to be overstated making the finding
ungeneralizable based on such variables. The findings must be strictly looked at as offering
insights into variables that influence level of CSS in firms incorporated in the study. The findings
cannot then be viewed in an identical manner to case studies on the basis of findings
generalization. The authors could have improved generalizability by carrying out replication
studies anchored on a huge responses’ number (Drury 2013). Future system needs to emphasize
on costing systems at business unit degree.
Conclusion:
The study has provided extra insights into areas linked to factors that influence the degree
of product cost accounting systems’ sophistication. It has also extended the scope of future study

Article Critique 4
by greatly helping the management accounting students alongside practitioners to effectively
understand the management accounting and concepts applicability which are well presented in
the article. The study has taken substantial efforts to minimize limitations and mitigate the gap
in the past studies. The study gives motivation for researchers to carry out further research in
various areas it has highlighted.

Article Critique 5
References:
Al-Omiri, M. and Drury, C., 2007. A survey of factors influencing the choice of product costing
systems in UK organizations. Management accounting research, 18(4), pp.399-424.
Drury, C.M., 2013. Management and cost accounting. Springer.