FACTORS AFFECTING THE ABILITY TO APPLY THE ABC ACCOUNTING METHOD: A CASE STUDY IN VIETNAMESE ENTERPRISES

Abstract

The study was conducted for the purpose of evaluating factors affecting the
ability to successfully apply the ABC accounting methods. Data were collected
from managers at 162 companies being clients of independent auditors. Basing
on quantitative research method, the current state of cost allocation and factors
affecting the ability to successfully apply the ABC accounting method were
investigated. The results indicate that managers are not really satisfied with the
current cost allocation methods. In addition, the ability to successfully apply the
ABC accounting method is influenced by six factors: (i) business strategy of the
enterprise; (ii) Financial resources of the enterprise; (iii) Qualification of human
resource; (iv) Business characteristics of the enterprise; (v) Organization and
management characteristics of the enterprise; (vi) Corporate culture. Through
findings, some recommendations are given to improve the ability to successfully
apply the ABC accounting method in the future, helping Vietnamese firms to
enhance their competitive advantage in the integration trend.