The influence of managerial competence on the relationship between cost accounting systems and financial performance: A quantitative study of social welfare organizations

Ashfaque Ahmed (), Shaili Vadera (), Samina Bashir (), Ashraf Imam (), Asma Khatoon (), Asif Baig () and Imran Ahmad Khan ()

International Journal of Applied Economics, Finance and Accounting, 2023, vol. 17, issue 2, 279-293

Abstract: This study was conducted to examine how the abilities of business managers affect the relationship between cost accounting systems and financial performance. The data has been obtained from social welfare organizations. Multiple regression analysis without an interaction term was first conducted as the base model followed by hierarchical multiple regression analysis to verify the increase in explanatory power by adding an interaction term. All independent variables, adjustment variables and control variables except dummy variables were centralized to facilitate the interpretation of the interaction term. A regression diagnosis was conducted after the exclusion of outliers. The statistical analysis environment R was used for the analysis. The findings of the study suggest that among the four functionalities of cost accounting systems, detailed cost ascertainment and reporting frequency may affect organizational performance through interactions with the abilities of business managers. This study may be viewed as a first step in examining the effects of the interaction between the functionality of cost accounting systems and the abilities of business managers on the financial performance of organizations.

Keywords: Costing system; Financial performance; Management ability; Social welfare organization; Upper echelons theory. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:oap:ijaefa:v:17:y:2023:i:2:p:279-293:id:1162

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