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News Regarding Performance Management Director Adam Presslee |
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News Regarding Performance Management Affiliate Kelsey Matthews |
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Adverse Effects of Confidence in Complex Cost Systems Amid Competition |
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Tyler Thomas' paper coauthored with Ella Mae Matsumura and Dimitri Yatsenko entitled, ‘Adverse Effects of Confidence in Complex Cost Systems Amid Competition’, was published in Advances in Management Accounting in October 2023. Many organizations seek to increase the accuracy of their costing systems through increased complexity. However, even complex costing systems can be prone to impactful inaccuracies. They find in their study that if inaccuracies exist in a costing system which adversely affect the firm, managers are less likely to attribute the adverse effect to issues with the costing system with greater system complexity, as managers confidence in the system increases with complexity. If signals of cost system inaccuracies are more likely to be ignored with greater cost system complexity, these issues can persist, which can negatively impact the firm. |