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Preparedness of accounting graduates in lean accounting in South Africa Nyanine Chuele Fonou PDF

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Preparedness of accounting graduates in lean accounting in South Africa Nyanine Chuele Fonou Dombeu (STUDENT NO. 26039710) Dissertation submitted in fulfilment of the requirements for the degree Magister Commercii in Management Accounting in the SCHOOL OF ACCOUNTING SCIENCES in the Faculty of Economic Sciences and IT at the North-West University (Vaal Triangle Campus) Supervisor: MJ Swanepoel Co-Supervisor: Prof P Lucouw Vanderbijlpark 2016 DECLARATION I, NC FONOU DOMBEU, declare that Preparedness of accounting graduates in lean accounting in South Africa is my own work and that all the sources I have used or quoted have been indicated and acknowledged by means of complete references. This dissertation has not previously been submitted by me or any other author to any other university. SIGNATURE DATE i ACKNOWLEDGEMENTS I would like to express my sincere gratitude to the following people who made the completion of this dissertation possible. First and foremost, I would like to praise and infinitely thank God Almighty for given me the wisdom, health and strength throughout this journey. Secondly, my loving and caring husband, Fonou Dombeu Jean Vincent, for his constant support, guidance, encouragement, motivation and inspiration. I couldn’t have done this without him. My wonderful children, Serena, Ismael and Arielle, for their love, support and understanding. My awesome supervisor, Mr MJ Swanepoel, for his guidance, ongoing support, feedback and interest in this study. My co-supervisor, Prof P Lucouw, for his contribution to this study. My parents, Irene and Jean Bosco Mpombo, and sisters, Josiane, Aurelie, Christelle and Flore, for their love and encouragement. My friends, Winsent and Keagean, for their support and encouragement. Mrs Elmarie Viljoen-Massyn, for the language editing of this dissertation. Lastly, to all people who contributed to my completion of this study. ii ABSTRACT Lean accounting is an innovative management accounting strategy that is being implemented by organisations worldwide to achieve business objectives and maintain economy competitiveness. The current economic situation in South Africa requires organisations to adopt innovative solutions such as lean accounting. However, the literature shows that South African organisations have not yet embarked on lean accounting adoption. Furthermore, case studies in various countries have revealed that a shortage of employees with knowledge of lean principles is one of the main barriers to the adoption of lean accounting in organisations. So far, no study has been conducted on the capacity of South African human resources to adopt lean principles. Moreover, it is not known the extent to which accounting curricula at South African institutions of higher learning has been updated to include content that would prepare students to participate in lean accounting projects after graduation. This study investigated whether the prescribed textbooks at South African universities include sufficient lean content to prepare accounting graduates to participate in lean accounting projects. The study followed a qualitative approach based on document analysis. First, a literature review was conducted of published articles that focus on lean accounting. A content analysis of the articles was performed to select the relevant publications for the study. The content of the selected publications was analysed further to identify and record all the lean principles and methods, as well as the practical methodologies of lean strategy implementation. Secondly, lists of prescribed textbooks in use at accounting departments at several South African universities were collected and the content of these textbooks was analysed to identify all sections pertaining to aspects of lean. These sections were recorded for further analysis. Finally, the information obtained on lean concepts discussed in various sections of the collected accounting textbooks was matched to the definitions of lean concepts from the literature. The findings revealed that, out of the 14 existing lean principles identified in the literature, only three (21.4%) were discussed in the prescribed accounting textbooks. Likewise, out of the 10 existing lean methods identified in the literature, only five (50%) were discussed in the prescribed textbooks. Moreover, the data analysis indicated that the prescribed accounting textbooks at South African universities do not emphasise iii lean concepts. Lean concepts identified in prescribed textbooks are discussed in isolation and there are no complete sections or chapters dedicated to lean methods and/or principles. Further, none of the prescribed textbooks allocated a full chapter or section to the discussion of any aspect of lean. The main finding of the study was that prescribed textbooks at South African universities do not include sufficient lean content to prepare accounting graduates to successfully participate in lean projects after graduation. iv TABLE OF CONTENTS DECLARATION ............................................................................................................... i ACKNOWLEDGEMENTS ............................................................................................... ii ABSTRACT .................................................................................................................... iii TABLE OF CONTENTS.................................................................................................. v LIST OF TABLES ........................................................................................................... x LIST OF FIGURES ........................................................................................................ xii LIST OF ABBREVIATIONS .......................................................................................... xiii CHAPTER 1 INTRODUCTION AND BACKGROUND TO THE STUDY ......................... 1 1.1 INTRODUCTION ............................................................................................... 1 1.1.1 Lean thinking ...................................................................................................... 2 1.1.2 Management accounting systems ...................................................................... 4 1.1.2.1 Traditional accounting system ............................................................................ 4 1.1.2.2 Activity-based costing system ............................................................................ 5 1.1.2.3 Target costing .................................................................................................... 5 1.1.2.4 Lean accounting ................................................................................................. 6 1.1.3 Barriers to lean accounting adoption .................................................................. 7 1.1.4 Preparedness of accounting graduates ............................................................. 8 1.1.5 Motivation........................................................................................................... 8 1.2 PROBLEM STATEMENT ................................................................................... 9 1.3 RESEARCH OBJECTIVES ................................................................................ 9 1.3.1 Primary objective ............................................................................................... 9 1.3.2 Secondary objectives ......................................................................................... 9 v 1.4 RESEARCH DESIGN AND METHODOLOGY ................................................. 10 1.4.1 Literature review .............................................................................................. 10 1.4.2 Population ........................................................................................................ 10 1.4.3 Data collection procedure and data analysis.................................................... 10 1.5 CONTRIBUTION OF THE STUDY .................................................................. 11 1.6 ETHICAL CONSIDERATIONS ......................................................................... 11 1.7 CHAPTER CLASSIFICATION ......................................................................... 12 1.8 CONCLUSION ................................................................................................. 12 CHAPTER 2 LEAN AND LEAN ACCOUNTING – AN OVERVIEW OF THE LITERATURE ................................................................................................... 14 2.1 INTRODUCTION ............................................................................................. 14 2.2 HISTORICAL BACKGROUND ON LEAN ........................................................ 14 2.3 THE TOYOTA PRODUCTION SYSTEM ......................................................... 15 2.4 LEAN STRATEGY ........................................................................................... 18 2.5 LEAN PRINCIPLES ......................................................................................... 20 2.6 LEAN METHODS ............................................................................................. 24 2.7 LEAN IMPLEMENTATION ............................................................................... 29 2.7.1 Evidence from industry..................................................................................... 29 2.7.1.1 Lean implementation in the manufacturing industry ......................................... 29 2.7.1.2 Lean implementation in the service industry .................................................... 31 2.7.2 Barriers to lean implementation ....................................................................... 32 2.7.3 Requirements for the successful implementation of lean ................................. 35 2.8 LEAN ACCOUNTING ...................................................................................... 36 2.8.1 Value stream management .............................................................................. 37 vi 2.8.2 Visual management ......................................................................................... 40 2.8.3 Continuous improvement ................................................................................. 40 2.8.4 Benefits of lean accounting .............................................................................. 41 2.9 THE GAP BETWEEN ACCOUNTING EDUCATION AND PRACTICE ............ 42 2.10 CONCLUSION ................................................................................................. 43 CHAPTER 3 RESEARCH METHODOLOGY ............................................................... 45 3.1 INTRODUCTION ............................................................................................. 45 3.2 RESEARCH PARADIGM ................................................................................. 45 3.3 RESEARCH DESIGN ...................................................................................... 46 3.3.1 Qualitative research ......................................................................................... 47 3.3.2 Quantitative research ....................................................................................... 47 3.3.3 Qualitative vs quantitative research ................................................................. 48 3.3.4 Mixed-method research ................................................................................... 49 3.4 RESEARCH METHOD..................................................................................... 50 3.4.1 Data collection ................................................................................................. 52 3.4.1.1 Population and sampling .................................................................................. 52 3.4.1.2 Data collected from the literature ..................................................................... 53 3.4.1.3 Data collection from prescribed accounting textbooks ..................................... 55 3.4.2 Data analysis ................................................................................................... 64 3.4.3 Ethics in research ............................................................................................ 64 3.5 VALIDITY AND RELIABILITY .......................................................................... 65 3.6 CONCLUSION ................................................................................................. 65 CHAPTER 4 DATA ANALYSIS AND FINDINGS .......................................................... 67 4.1 INTRODUCTION ............................................................................................. 67 vii 4.2 DATA ANALYSIS OF PRESCRIBED TEXTBOOKS ........................................ 68 4.2.1 Number of universities and prescribed textbooks ............................................ 68 4.2.2 Lean-related concepts identified in prescribed textbooks ................................ 70 4.2.2.1 Lean principles in prescribed textbooks ........................................................... 72 4.2.2.2 Lean methods in prescribed textbooks ............................................................ 79 4.2.2.3 Lean themes in the prescribed textbooks......................................................... 90 4.2.2.4 Summary.......................................................................................................... 96 4.2.3 Volume of prescribed textbooks allocated to lean concepts ............................ 96 4.3 PRESENTATION AND DISCUSSION OF FINDINGS ..................................... 97 4.3.1 Common definitions and functionalities of lean concepts in the literature and prescribed textbooks ................................................................................. 98 4.3.2 Limited discussion of lean concepts in prescribed textbooks ........................... 98 4.3.3 Partial discussion of lean principles and methods in prescribed textbooks ...... 99 4.3.4 Limited space allocated to lean concepts in prescribed textbooks ................... 99 4.3.5 Similar findings in related studies ................................................................... 100 4.4 CONCLUSION ............................................................................................... 101 CHAPTER 5 CONCLUSION AND RECOMMENDATIONS ........................................ 102 5.1 INTRODUCTION ........................................................................................... 102 5.2 RESEARCH OBJECTIVES ............................................................................ 102 5.2.1 Secondary objective 1 .................................................................................... 102 5.2.2 Secondary objective 2 .................................................................................... 103 5.3 LIMITATIONS OF THE STUDY ..................................................................... 104 5.4 RECOMMENDATIONS FOR FURTHER STUDY .......................................... 105 viii 5.5 CONCLUDING REMARKS ............................................................................ 105 REFERENCE LIST ..................................................................................................... 106 ix

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Lean accounting is an innovative management accounting strategy that is being Descriptions of Kaizen costing in the literature and prescribed .. Macmillan English Dictionary (2012) defines the word 'preparedness' as the state
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