The Role of Resource Consumption Accounting in Achieving Competitive Prices and Sustainable Profitability

Abdurrahman Mawlood Mustafa, Asil Azimli and Rizgar Abdullah Sabir Jaf
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Abdurrahman Mawlood Mustafa: Department of Accounting and Finance, Cyprus International University, Haspolat, Via Mersin 10, Nicosia 99258, Turkey
Asil Azimli: Department of Accounting and Finance, Cyprus International University, Haspolat, Via Mersin 10, Nicosia 99258, Turkey
Rizgar Abdullah Sabir Jaf: Department of Accounting, Salahaddin University-Erbil, Erbil 44002, Iraq

Energies, 2022, vol. 15, issue 11, 1-23

Abstract: This study examines the roles of resource consumption accounting and competitive prices in attaining sustainable profitability. The objectives were (1) to determine whether the adoption of resource consumption accounting practices yields significant improvements in competitive strategies in a highly competitive situation where activity-based costing has proved to be insignificant, and (2) to ascertain if the positive relationship between competitive pricing and sustainable profitability is increased by the extent to which resource consumption accounting exerts pressure for sustainability profitability. A PLS-SEM procedure was applied in analysing 129 of the top 30 performing companies’ structured questionnaire responses drawn from five industries in Kurdistan from 2021. The empirical results demonstrated that competitive pricing models involving resource consumption accounting systems provide superior price forecasting, error reduction and profit maximisation capabilities than existing energy models. The study’s outcomes highlight that the extent to which resource consumption accounting exerts pressure on sustainability profitability significantly increases the positive relationship between competitive pricing and sustainable profitability. The results of this study advance construct and item development involving competitive pricing and resource consumption accounting while testing relationships to uncover the moderating role of resource consumption accounting in profit maximisation. Thus, energy and non-energy industrial companies must rely on resource consumption accounting to set competitive prices and enhance and sustain their profitability by considering the overlooked energy pricing stochastic parameters and errors amid rising energy shortages and costs.

Keywords: competitive prices; energy market; profit maximization; resource consumption accounting; stochastic parameters; sustainable profitability (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
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