Journal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

Quality of cost information utilized in cost management:
Evidence from a survey of Japanese factories
Keita Iwasawa
College of Economics, Rikkyo University, Japan
Japan Accounting Association (JAA)
Email: k.iwasawa@rikkyo.ac.jp
Abstract
The purpose of this study is to clarify the characteristics of cost information utilized in costmanagement. For this purpose, the framework of cost information quality was applied to enable
comprehensive and systematic measurement of the characteristics required for cost information.
The relationship between each characteristic (quality) and the degree of use and satisfaction of
cost information in cost management was then clarified by conducting a questionnaire survey
in the factory. The results showed that (1) representational and contextual quality is positively
associated with the degree of use of cost information, but no relationship is found for intrinsic
quality; (2) all quality dimensions are associated with satisfaction with cost information; and (3)the moderating effect of representational quality is confirmed for the relationship between
intrinsic quality and satisfaction. These findings indicate the validity of prioritizing expressive
and contextual quality over the intrinsic quality dimension in the utilization of cost information,and that intrinsic quality is a necessary but not sufficient condition.
Keywords Cost Information, Cost Accounting, Information Quality, Cost Management,
Questionnaire Survey(1) Introduction

maps daily activities and causal relationships

The usefulness of cost information in cost

(Drury, 2015, pp.86-87; Kataoka, 2011, pp. 2-7).

management has been discussed for some time,

It has been pointed out that the usefulness ofand many studies have been conducted. Recent

cost information in modern manufacturing

studies on cost information have focused on theenvironments has decreased due to the low

issues of indirect cost allocation and theaccuracy of traditional calculations; therefore,

accuracy of cost information (Brierley, 2008,

studies to clarify the effects of accurate cost

pp.61-63). The accuracy of cost information

informationrefers to the degree to which cost information

accurate cost information have accumulated

realisticallyand(Johnson and Kaplan, 1987; Kataoka, 2011,

production realities. Accurate cost information

pp.2-5). However, the results of studies on thecanhighlyeffects of sophisticated cost allocation andsophisticated cost accounting that appropriately

accurate cost information, such as the degree ofbereflects

providedmanagement
only

through34

withpreciseallocation

andJournal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

use and satisfaction in cost management, arediscussed in previous studies (Iwasawa, 2020,

not consistent (Gosselin, 2006, pp.662-663).

p.52). Third, it is necessary to focus on the use of

Moreover, sophisticated costing, such as ABC, iscost information at the individual manager level.

not widely used in practice (Gosselin, 2006,

Many previous studies have been based on

pp.649-656).

surveys at the firm or plant level, even thoughSomeprevious

studies

indicatetheit has also been suggested that even in the same

importance of information characteristics otherorganization,therequirementsforthan accuracy. For example, Brierley (2008)

information may differ depending on contextual

found various characteristics required for cost

factors andinformation, such as understandability and(Abernethy et al., 2001; McGowan andcompleteness, from field surveys. This suggests

Klammer, 1997; Schoute, 2009). Since somea gap between research and practice in previous

argue that satisfying the requirements of eachstudies, which have focused on accuracy. Pizzini

manager is important for the effective use of(2006) also showed that the level of detail andaccounting

frequency of reporting affect the usefulness ofKlammer, 1997), it is desirable to focus initiallycost information. These studies suggest thaton the individual level.

important purposes

informationof(McGowan

cost
use.

and

increasing the accuracy of cost information does

Therefore, the purpose of this study is to

not directly relate to the usefulness of costelucidate the characteristics of cost information

information in cost management. In otherutilized in cost management, with a focus on thewords, the sophistication of cost allocation andindividual manager level. To achieve thisaccuracy of cost information, which have been

purpose, this study has two features. First,

the focus of previous studies, may not fully

based on the "cost information quality"

explain the effectiveness and usefulness of costframework (Section 2), we measure theinformation.

characteristics of cost information and develop

Previous studies have some limitations.

hypotheses (Section 3). This framework makes

First, there is a lack of empirical evidence on theit possible to systematically measure theeffects of information characteristics other thancharacteristics required for cost information;accuracy. It is not sufficiently clear how

thus, we intend to explain the relationshipproperties other than accuracy contribute to

between cost information and its utilization, forcost management as opposed to accuracy, forwhich there has been no consensus on thewhich a wealth of evidence has accumulated.

results in previous studies. Second, we conduct

Second, in studies on characteristics other thanaaccuracy,such

department managers in two firms (Section 4)

characteristics is unclear. Some characteristics,

to test our hypothesis (Section 5). In this way,such as completeness, detail or relevance, andwe intend to clarify the relationship between

decision usefulness, may have inclusive or

each characteristic of cost information and its

causal relationships. However, since studies are

utilization at the individual level based on

based on various theories and dependent

empirical evidence.

therelationshipbetweenquestionnaire

surveyofproduction

variables, it is difficult to organize therelationships

betweenthecharacteristics(2) "Cost Information Quality" Framework

35

Journal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

In order to apply the "Cost Information

characteristics required for cost information.

Quality" framework (Iwasawa, 2020), we will

According to the framework, cost information is

first explain the concept of "information quality"

required to have nine characteristics in fourand the "four-dimensional model of information

dimensions:

quality" which the framework relies on,(accuracy

according to DeLone and McLean (1992),

dimension (ease of operation and accessibility),

Sekiguchi(2010).

representational quality dimension (ease ofInformation quality, which is a concept ofunderstanding and conciseness), and contextual

information systems theory, is defined as

quality dimension (relevance, completeness,"fitness for use of information" and refers to theand timeliness) (Table 1).

(2013),

andYakuwaintrinsic
andqualityobjectivity),

dimensionaccessibility

degree to which the management information
provided meets the requirements. This concept

Table 1 Cost information quality, component

has attracted attention because information

dimensions, and sub-characteristics

systems theory has focused too much on

Sub-characteristics

technical aspects. Research on technological

Intrinsic quality dimension

modelsalone

usefulness

cannotof

fully

explainmanagement

Examples of Prior Researchtheaccuracy

ABC studies and many others

information;

objectivity

Myers et al. (2017)

therefore, it is important to pay attention to theAccessibility quality dimension

users of information. In order to evaluate andease of access－measureease of operation－

information

quality,

Wang

and

Strong’s (1996) "Four-Dimensional Model ofInformation

Quality"exhaustively

Representational quality dimension

andsystematically presents the sub-characteristics
that constitute information quality. The model
information quality in an exhaustive andsystematic manner based on a large-scale
survey. This model makes it possible to measure
abstract concept. Specifically, the model shows

informationtherequirements

of

the

timeliness

Chenhall and Morris (1986)

are required for cost information and why,
Iwasawa (2020) built a framework showing thecharacteristics required for cost information,

Relying on this four-dimensional model of

empirically confirmed its validity through field

information quality, the framework of "Costpresents

Pizzini (2006)

problem that it is unclear what characteristics

sub-dimension.

Quality"completenessinformation.” Based on the awareness of thecharacteristics that constitute each quality

Information

Mia and Chenhall (1994)

being used with the requirements for costbyconfirming whether the information being usedmeets

relevance

degree of conformity of the cost information

quality dimensions, and it is possible toofCardinaels (2008)

Cost information quality refers to “thethat information quality is composed of four
qualityconcisenessIwasawa (2020)and evaluate information quality, which is an

theBrierley (2008)

Contextual quality dimension

presents the constituent characteristics ofmeasureunderstandability

studies, and confirmed that the required

the

36

Journal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

characteristics differ depending on the purpose

concepts. By using these studies, it is possible toof using cost information. In addition to

conduct

empirically confirming the validity of themeasurement with higher validity.

research

based

on

concept

framework through field studies, we confirmed
that

the

requiredcharacteristics

differ(3) Developing a Hypothesis

depending on the purpose of the use of cost

1. Constituent dimensions of cost information

information.

quality required for cost management: Focusing

This study applies the framework of cost
information

qualitytomeasureon intrinsic, representational, and contextual

thequalitycharacteristics of cost information for three

Among the four quality dimensions of costreasons. First, it enables us to comprehensively

information quality, this study focuses on threeand systematically measure the requiredofcharacteristics of cost information. As alreadyrepresentational, and contextual. This ismentioned, although there are a wide variety of

because for planning and control (P&C)

points that have been noted in previous studies

purposes, including cost management, intrinsic,

regarding the characteristics required for cost

representational,

information, the theories and explanatory

dimensions are required, and the accessibility

variables used in these studies are inconsistent,

quality dimension is less important (Iwasawa,making it difficult to integrate the research2020). Unlike management decision making

results. In this study, we apply the framework,

purposes where managers use the information

which is based on the main concepts ofon an ad hoc basis, cost information for P&C

information systems theory and has been

purposes is provided through periodic reports,

empirically verified by field studies, to solve thesuch as monthly reports; therefore, easy

research problem. Second, it is possible toaccessibility is not required. In addition, ease ofmeasure the characteristics of cost information

operation is not important because there isfor each purpose of use. It has been shown that

seldom any need for extracting specific figures

the degree of characteristics required for costfrom cost information for P&C purposes.

thesequalitydimensions:andcontextual

intrinsic,

quality

information varies depending on the purpose of

Therefore, based on empirical evidenceuse (Schoute, 2009); however, previous studies

from previous studies that cost management

did not take this into consideration. Since thehas requirements regarding the intrinsic,

framework empirically shows that the required

representational,

characteristics differ depending on the purpose

dimensions, this study measures the seven sub-of use, it makes it possible to conduct researchcharacteristics that make up the three quality

for each purpose from the viewpoint of users.

dimensions. According to the definition, for each

Third,aquality dimension, if the level of the constituent

measurement framework. Since it relies on the

sub-characteristics is high, it is expressed as

major models of information systems theory,"high quality." For example, in terms of theresearch on measurement methods for the

intrinsic quality dimension, if the information

concept has been conducted, such as Lee et al.

provided satisfies accuracy and objectivity,(2002) and other studies on the measurement of

which are the sub-characteristics of the intrinsic

theframeworkisrobust

as

37

and

contextual

quality

Journal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

quality dimension, it is expressed as “higheach of these variables may differ. It is true that

intrinsic quality.”

the degree of use and satisfaction level are
related, and there is a certain correlation

2. Degree of use and satisfaction with cost

between them; however, in management

information in cost management: Explained

systems theory, it has been shown that thevariables

factors that affect each variable are different

For the following two reasons, we focus on(DeLone and McLean, 1992, pp.66-69). For

the "degree of use" and "satisfaction" of costexample, in a situation where management

information in cost management as variables toinformation must be used, it is insufficient tomeasure its utilization in cost management.

measure only the degree of use. Therefore, it is

The first reason is its importance. According tonecessary to measure both variables ("degree of

DeLone and McLean (1992), in informationuse" and "satisfaction") because it is expected

systems theory, these two variables, namely,that the characteristics related to the degree ofdegree of use and satisfaction, have been widely

use and degree of satisfaction are notused as explained variables to measure thenecessarily the same for cost information, as

success of information systems and the impact

described later.

of management information on users. This isbecause of the problem that the usefulness of a3.

Relationshipsystem, regardless of how technologicallydimensions of cost information quality and thesuperior, is low when there is a cognitive gap

degreebetween information providers and users.

information in cost management

of

use

betweenandthecomponent

satisfaction

of

cost

Management information that is not often used

We discuss the relationship between theand has a low level of satisfaction in the field

intrinsic, representational, and contextual

will not produce results and contribute to thequality dimensions and the degree of use andorganization. Therefore, it is important to pay

satisfaction of cost information.

attention to these variables in cost information,

As for the representational quality and thewhich is part of management information. It

contextual quality dimensions, it is presumed

has been pointed out that the value ofthat these dimensions are closely associatedaccounting information depends not on its

with both the degree of use and satisfaction ofsophistication as a method, but on how it is used

cost information. It has been observed that theand interpreted (Hall, 2010). In fact, many

understandability of costing is enhanced toprevious studies on cost information haveencourage its use in manufacturing plants

focused on this issue (e.g., Foster and Swenson,(Hiromoto, 1988; Merchant and Shields, 1993).

1997; Schoute, 2009); however, the degree ofIf plant managers cannot understand thesatisfaction

allocation

factors behind the numerical values, they willcalculations varies among users, and it is not

not make the next improvement. In addition, if

clear what characteristics are related to these

the amount of information is large and thevariables.

conciseness of accounting information is low, it

Second,withitsophisticatedisanticipated

that

the

will have an adverse effect on the decision

characteristics of information associated withmaking of users (Chewning and Harrell, 1990).

38

Journal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

Furthermore, with regard to the context

improve the figures even if they are aware of thequality dimension, the importance of providing

problems of accuracy and objectivity to someappropriate cost information according to theextent. Therefore, we propose the following

user's task has been pointed out for a long time,

hypotheses:

as in the maxim “different costs for different
cost

Hypothesis 1: The representation andinformation in a range different from that of
one's accounting responsibility is low, reporting

contextual quality of cost information ispositively associated with the degree of use ofcost information in an appropriate range, mesh,

cost information in cost management.

purposes.”

Since

the

usefulnessofand at an appropriate time leads to its usage

Hypothesis
2:The
intrinsic,
representational, and contextual quality of costand satisfaction (Arai et al., 2010; Chenhall and
Morris, 1986; Pizzini, 2006).
to have a close relationship only with the degree

information is positively associated with thesatisfaction of cost information in costof satisfaction of the cost information and amanagement.

The intrinsic quality dimension is expected

weak relationship with the degree of use. Sincemany cases have reported that cost information

4. Moderating effects of representational andwith low accuracy leads to users' distrust, that

contextual

is, values that deviate from the senses of therelationshipmanufacturing site (Abernethy et al., 2001), it isdimensions and satisfaction

qualitydimensions

betweenon

intrinsic

thequalityclosely related to the degree of satisfaction. As

In this study, we expect a moderating effectfor objectivity, there is empirical evidence thatof representational and contextual quality

informal cost information, which is notdimensions on the relationship between themonitored by the IT department and is provided

intrinsic quality dimension and satisfaction

by individual employees, is less objective andwith cost information. In other words, theverifiable, and thus trust in cost information isrelationship between the intrinsic quality

reduced (Myers et al., 2017). Thus, objectivity isdimension and satisfaction differs depending on

also assumed to be related to satisfaction.

the level of representational and contextual

However, the relationship between thequality.

intrinsic quality dimension and the degree ofPrevious studies have pointed out thatuse is less relevant. The intrinsic quality

accurate allocation calculations and highly

dimension, as defined, is a dimension related toaccurate cost information do not necessarily

the numerical data of the information and is lessdirectly lead to satisfaction (Brierley, 2008;

related to the ease of use of the information thanSchoute, 2009; Shields, 1995). With regard to

the other quality dimensions. For P&C

thispurposes, including cost management, costcharacteristics are traded off, cases have shown

information

withthat other characteristics are often prioritized

performance evaluation, and managers areover accuracy. For example, the sophistication of

responsible for costs. Therefore, it is difficult toindirect cost allocation makes the focus of cost

assume that they do not use cost information to

management

is

often

connected

39

issue,

whenunclearaccuracy

andandhampers

other

the

Journal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

understandability of cost information in thetwoproduction line (Hiromoto, 1988; Merchant andimplementing improvement activities based on

Shields, 1993). In other cases, highly accurate

cost information, as are many manufacturers.

cost information fluctuates rapidly, making it

In these companies, cost information isdifficult for users to understand and operate thereviewed at the monthly cost meeting attended

information

purposesby lower managers (equivalent to line managers(Iwasawa 2020). In all of these cases, theand section managers) and upper managers in

usefulness of cost information was ensured by

all plants, to confirm the production status ofgiving priority to other characteristics rather

thethan accuracy. In other words, the intrinsic

improvements in the following month. Since

quality (accuracy) of cost information does not

managers are responsible for the cost of

directly lead to the satisfaction of cost

manufactured products and the expenses of

information by itself, but only when it istheir own departments or production lines, they

combined with other characteristics. For

must account to the factory manager for any

instance, in a situation where the meaning ofdeviation from the budget target. In addition,

cost information is difficult to understand andeach factory’s accounting department organizes

its relevance to the task is weak, no matter how

a series of information on costs as describedaccurate and objective the value, it will not lead

below in Excel format, and sends it to theto satisfaction. Therefore, we propose themanagers before the cost meeting.

according

to

their

following hypothesis:

reasons.

previousFirst,

themonthcompanies

and

to

are

discuss

Second, product cost information is utilized
for cost management. Product cost information

Hypothesis

3:

Representationalandis sometimes unsuitable for performancecontextual quality moderates the relationshipbetween intrinsic quality and satisfaction withmanagement because the responsibility is often

cost information in cost management.

allocation (Obata, 2017). However, in the factoryambiguous due to the problem of overhead costof the target company, the correspondence(4) Research Methods

betweenmanufactured

1. Selection of surveyed companies andproduction

lines

description of the use of cost information

manufacturing cost of a product group and theisproducts
clear;

thus,

and
the

In order to test our hypotheses, we

responsibility relationship of each manager are

conducted an in-factory questionnaire survey inclear. Therefore, when the product cost exceeds

six factories of two manufacturing companies

the budget, the production department isthat cooperated with our survey (Table 2).

required to improve it. In addition, related

Company A is classified as a plastic productdepartments such as production control andmanufacturer and mainly manufactures andquality control will be included in the discussion

sells plastic resins. Company B is classified as

to reduce the product cost from the perspective

an electronic equipment manufacturer andof production planning and product mix. Since

mainly manufactures and sells electronic

intrinsic quality (accuracy and objectivity),

devices, primarily semiconductors.

which is measured in this study, is often an

The surveyed companies were selected for

issue in the calculation of product costs, we40

Journal of Japanese Management Vol.5, No.2, May 2021

preferredcost

production line in the production department is

information in cost management for the study.

assigned a budget target for expenses, and the

The following is an explanation of theinformation on actual expenses is compiled and

usage

of

companies

information

product

costreported monthly. Cost targets are also set for

management of the companies. The cost

related departments other than the production

information mainly used in the factories of thedepartment in the factory, such as the quality

target company is the product cost information

control and safety control departments, and costfor each product group, the cost information

information for each department is given. In

broken down by department and production

addition, information on material costs is alsoline, and the material cost information, each ofimportant. Since most of Company A's raw

which is shared with the analysis of thematerials and Company B's parts are imported,difference between the forecast and actual costs.

and they are strongly influenced by exchangeFirst, with respect to the product cost of eachrates and energy prices, the price of raw

productwhichmaterials fluctuates widely. By analyzing the

manufactures plastic resins, presents thereason for the difference in material costs

product cost per unit (gram), and Company B,

between the actual and budgeted costs bywhich manufactures semiconductors, presents

comparing the material usage rate in each line,

the product cost per unit. These are calculated

the managers are able to make improvements

within the scope of manufacturing costs and are

for the next month.

presented

cost

using

ISSN 2189-9592

group,

afterinCompany

allocating

A,

the

overhead

Although the same cost information is

manufacturing costs. When the actual cost

reported and used in each factory, it is assumed

deviates from the budget, each manager isthat the recognition of the quality of therequired to explain the cause of the deviation to

information and the degree of its use vary. As forthe factory manager at the monthly cost

the intrinsic quality of cost information,

meeting and to make improvements for the next

Company A, for example, manufactures plastic

period. In addition, relevant departments in theresins, several basic resin products, andfactory other than the production department

derivative products with special processing

also discuss how to lower costs based on productaccording to orders, and the number of thesecost information. For example, the quality

derivative products is several tens of thousands.

control department is required to consider

Therefore, the line in charge of manufacturing

production problems from the perspective ofbasic resin products is a small-mix, high-volume

failure costs and losses of specific products, andproduction line, while the line dealing withthe production control department is required toderivative products is a large-mix, low-volume

examine the production plan and product mix to

production line. As a result, even if product costbe manufactured in order to reduce the cost.

information is based on the same allocation

In analyzing the factors that cause changes

calculation, the accuracy and objectivity of thein the cost of products, it is important to haveinformation may differ depending on theinformation on expenses and material costs

production line in charge. As for the quality ofbroken down by department and production

representation and context, it is presumed thatline. Each department in the factory and eachthe perception of quality may differ depending

41

Journal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

on the users’ accounting knowledge, thesurvey was distributed and collected via thedepartments or plants, job titles, the degrees ofGeneral Affairs Department. This enabled us tointerest in costs, and relationships with thecollect the responses without going through theaccounting department.

respondents’supervisors,theaccounting

department, or any other department related to
2. Data collection

the survey content.

The survey subjects were lower managers(equivalent to line managers and section

3. Measurement of variables

managers) and upper managers who belong totheproduction

department

andCost information quality was measured

relatedbased on Iwasawa (2020) and Lee et al. (2002)

departments in the factory. This is because it

who developed a measurement scale for thewas expected, based on prior interviews, thatfour-dimensional model of information quality

they view cost information, make decisions(Wang and Strong, 1996). Specifically, we

based on cost information, and engage inmodified the expressions of the questions in Lee

improvement activities, as already mentioned.

et al. (2002) to fit the cost information andmeasured it on a seven-point scale (Table 3).

Table 2 Questionnaire survey overview
NumberNumberofofsubjects

collections

P (Japan)

18

17

Q (Asia)18

14

R (Asia)

16

15

S (Asia)

12

10

X (Japan)

29

23

Y (Japan)

18

12

111

91

Company

Factory

A

B

Total

The questionnaire was reviewed in advance by
the accounting staff of each factory to ensure

Implementationthat there were no discrepancies in the wording

periodof the questions. The results show that theNovember 2018

Cronbach's α of the variables for each quality

June–July

dimension is generally at a reasonable level 1

2019.

(Table 3). In order to avoid multicollinearity, allvariables were centered on the mean value.

August 2019

In addition, as control variables, we set

Septemberdummy variables for the respondent’s company,

2019

department (1 for production department), andFebruary 2019

position (1 for section chief or higher). In eachvariable, it was considered that the importance(82.0%)of cost information in business operations
differs depending on job title; hence, it was

In Company A, the questionnaires werenecessary to control for the effect2. For example,

distributed by e-mail through the accounting

in the case of Company A, which is an

department of each factory, and the respondents

equipment industry, and Company B, which isthen responded directly. In Company B, thea processing and assembly industry, the1 Items assumed as objectivity 2 were excluded

would have a direct impact on the degree of useof cost information or the level of satisfaction,
since there were no major differences in
production patterns, business contents, ormanagement styles within each company.

because they significantly lowered the
Cronbach's α for intrinsic quality
2 We did not include factories as a control
variable because we did not think that they42

Journal of Japanese Management Vol.5, No.2, May 2021

Table 3 Measurement of variables
Sub-

importance of cost information in business
operations is assumed to be different because

Min–
Questionnairecharacteristics

Avg.

SD

4.65

0.91

the

Max

Intrinsic quality（Cronbach’α=0.77）

2–7

information show production conditions

proportion

2–7

4.77

dimensions
1–7

4.50

1.36

Intrinsic

The numerical values in the cost
2–7

4.70

1.05

1–7

4.65

1.22

Representational quality（Cronbach’α=0.91）

2–7

4.71

1.10

Contextual

conciseness 1

2–7

4.71

1.26

quality

2–7

4.66

1.20

2–7

4.97

1.25

Representational

The calculation process of the numericalqualityvalues is very transparent.

The format is clear and easy to read.

Intrinsic

Representational

Contextual

qualityqualityquality1

quality

information are extremely realistic.

objectivity 1

forTable 4 Correlation between quality

actual situation.

accuracy 3

costs

1.10

The numerical values in the cost
information seem detached from thecontrollable

difference in the fixed cost ratio.

extremely accurately.

accuracy 2 (R)ofproduction managers is different due to the

The numerical values in the cost
accuracy 1

ISSN 2189-9592

0.55

1

0.49

0.50

1

The cost information is compiled inconciseness 2(5) Results and Discussion

appropriately sized batches.
understandability 1
understandability 2

1completeness2

Toeasily digestible manner.

1–7

4.51

1.27

2.17–7

4.79

0.95

2–7

4.65

1.18

1–7

4.44

1.22

1–7

4.77

1.38

1–7

4.70

1.36

2–7

5.08

1.14

1–7

5.13

1.43

intrinsic

quality,expressive

quality,andcontextual quality as well as the control

The detailed breakdown of the data in thevariables already mentioned, were entered. In

recorded cost information is sufficient.

Model 2, the interaction variables between
intrinsic quality and expressive quality andrelated to my work.

between intrinsic quality and contextual quality

The scope of the cost information iswere added to the variables in Model 1.

consistent with the scope of my work.

Table 5 shows the results of the multiple

The reporting of the cost information isregression analysis3. Regarding Hypothesis 1,

perfectly timed for when I need it.

(R)

study

management. In Model 1, the main effects of

The recorded information is sufficiently

timeliness 2

thissatisfaction with cost information in cost

information.

timeliness 1

hypotheses,

dependent variables: the degree of use of and

All necessary data is recorded in the cost

relevance 2

theanalysis assuming two models for the twoand change factor of the costs.

relevance 1

test

conducted a hierarchical multiple regression

It is easy to locate the occurrence factor

Contextual quality（Cronbach’α=0.84）
completeness1. Hierarchical multiple regression analysis

The cost information was provided in an

Model 1a confirmed that expressive quality and

The cost information does not reflect thecontextual quality were positively associatedcurrent situation.

with the degree of use of cost information(R) indicates the inversion scale.
3 In terms of multicollinearity, the maximum ofvariables in the model was 2.42, showing nomajor problems with the results of the analysis.

Variance Inflation Factor (VIF) for any of the43

Journal of Japanese Management Vol.5, No.2, May 2021

(significance levels of 5% and 0.1%, respectively).

partly supported.

As expected, the relationship with intrinsic
qualitywasnotconfirmed.

ISSN 2189-9592

Finally, we examine Hypothesis 2. Model

Therefore,

1b confirmed that representational quality andHypothesis 1 is supported.

contextual quality were positively related to thelevel of satisfaction with cost information (5%Table 5 Results of multiple regression analysis a
Degree of use b
Model 1aModel 2aand 0.1% significance levels, respectively). As
for intrinsic quality, although the direct

Satisfaction C
Model 1b

relationship was not confirmed, the effect of theModel 2binteraction term was significant in Model 2b, as

Cost information quality dimensions d
Int

-0.07

-0.07

-0.06

-0.05

already

Rep

0.28*

0.25*

0.33***

0.38***

relationshipCon

0.52***

0.53***

0.50***

0.44***

Hypothesis 2 is supported.

was

and

the

confirmed.

indirect
Therefore,

In Model 2a, the main effect is similar toInteractions
Int * Rep

-0.18

0.25*

Int * Con

0.08

0.01

that of Model 1a, and the interaction terms are
not significant. These results are consistent
with the assumption made when constructing

Control variables
Company

0.01

0.04

0.07

0.02

Dep

0.10

0.11

-0.01

-0.03

Position

0.07

0.06

-0.09

-0.09

Adj. R2

0.490

0.496

0.533

0.589

F

15.27***

11.93***

17.90***

16.91***

the hypothesis that intrinsic quality does notaffect the degree of use of cost information.
These results suggest priority relationships
between the characteristics required for cost
information (Figure 1). While representationaland contextual quality are related to both the†p<0.1, *p<0.05, **p<0.01, ***p<0.001

degree of use and satisfaction, intrinsic quality

a Estimate by least squares method

is related only to satisfaction and had no effectCoefficients are standardizedon the degree of use. This means that no matterb Degree of use: “I always use the cost information for myhow high the accuracy (intrinsic quality), it willassignments in cost management.”cmentioned,

not lead to the use of cost information unless theSatisfaction: “I am extremely satisfied with the costquality of representation and context are

information reported in cost management.”

ensured. This result is consistent with those ofd Int: Intrinsic quality; Rep: Representational quality; Con:previous studies. These studies reported cases

Contextual quality

in which other characteristics are often
prioritized over accuracy when accuracy is

Next, we examine Hypothesis 3. In Model

traded off with other characteristics (Hiromoto,2b, the effect of the interaction term between

1988; Iwasawa, 2020; Merchant and Shields,

intrinsic quality and representational quality1993). Based on the results of this study, it canon the level of satisfaction with cost information

be interpreted that representational andwas confirmed at the 5% level of significance.

contextual quality are prioritized over intrinsic

However, the effect of the interaction term

quality because accuracy (intrinsic quality) does

between intrinsic quality and contextual quality

not lead to the use of cost information unless

was not confirmed. Therefore, Hypothesis 3 isother characteristics are improved.

44

Journal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

impact depends on other characteristics. It istrue

Cost information quality

Representational／

information

Accessibility quality

to be used

Contextual quality

thediscussiononallocation

calculation and accuracy is important in cost

Intrinsic quality
Cost

that

Cost

accounting theory, and the contribution of theseinformation toresearch groups is significant. However, thebe satisfied

results of this study show that no matter how
sophisticated the cost allocation is designed to

Figure 1 Relationship between cost

be and how accurate it is, if other characteristics

information quality and degree of use andare not taken into account, the effect will besatisfaction with cost information

partial.

2. Simple slope analysis(6) Conclusion

To test Hypothesis 3 and interpret the

The purpose of this study is to clarify the

results, a simple slope analysis was conductedcharacteristics of cost information utilized inas an additional analysis because the effect of

cost management. For this purpose, thethe interaction term between intrinsic quality

framework of cost information quality wasandsignificant.

applied to enable the comprehensive andSpecifically, referring to Aiken and West (1991),

systematic measurement of the characteristics

we assumed a single regression line for intrinsic

required for cost information. The relationshipquality when the score of expressive quality was

between each characteristic (quality) and the±1SD (standard deviation), with satisfaction

degreewith cost information as the dependent variable.

information in cost management was thenAs a result, when the representational

clarified by conducting a questionnaire survey

quality was low (-1SD), the relationshipin the factory. The results showed that (1)between intrinsic quality and satisfaction was

representational and contextual quality is

not confirmed (β = -0.14, p = 0.34), but when thepositively associated with the degree of use ofrepresentational quality was high (+1SD), thecost information, but no relationship is found for

relationship between intrinsic quality andintrinsic quality; (2) all quality dimensions are

satisfaction was suggested (β = 0.24, p = 0.06).

associatedThis is consistent with the expectation madeinformation; and (3) the moderation effect ofwhen constructing the hypothesis that intrinsic

representational quality is confirmed for thequality does not directly lead to satisfaction on

relationship between intrinsic quality andits own, but only when high representational

satisfaction. These findings indicate the validity

quality is used to increase satisfaction.

of prioritizing expressive and contextual quality

expressive

quality

was

of

use

with

and

satisfaction

satisfaction

of

with

cost

cost

These results suggest that intrinsic quality

over the intrinsic quality dimension in theis a necessary but not sufficient condition for theutilization of cost information, and that intrinsic

satisfaction of cost information. Inherent

quality is a necessary but not sufficientquality alone, including accuracy, which is thecondition.

focus of previous studies, is limited in increasing

The contributions of this study are as

the satisfaction of cost information, and its

follows. First, by relying on the cost information

45

Journal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

quality framework, this study confirmed thethe perception of cost information quality isrelationship between cost information and its

important for the utilization of cost information,utilization with higher explanatory power,

all the characteristics of cost information are

where previous studies have not reached ameasured by users' perceptions; however, it isconsensus on the results. In contrast to previous

assumed that the correctness of the perceptions

studies that focused on a few characteristics,

may vary. It is also assumed that thethis study used a more systematic framework tocorrectness of cognition may vary. For example,

show the impact of each characteristic. As athere may be a case where the accuracy of cost

result, this study shows that accuracy alone

information is misperceived as high evendoes not lead to the use and satisfaction of costthough it is actually low due to users' accounting

information, and that it is important to consider

knowledge. In this study, since the dependent

various characteristics.

variable is also based on users' perceptions such

Second, this study also contributes to theas satisfaction, there is no major problem withgroup of studies that have focused on

the results of the analysis itself, which shows

characteristics other than accuracy. Since thesethestudies pointed out the importance of various

However, as shown in the example, if the actual

characteristics, it was difficult to integrate theirlevel and perception are extremely incompatible,

results. Therefore, by relying on the cost

it is undeniable that decision making based on

information quality framework, the findings ofcost information may be inappropriate even if

the previous studies are organized, and several

the degree of use and satisfaction are high. In

interesting discoveries are made, such as theother words, it may not be enough to increase

fact that the impact of each characteristic on thethe perception of the quality of cost information.

use and satisfaction of cost information is

Therefore, it would be desirable to conduct

different, and that there is a moderating effect.

research that also considers more objective

Third,

the

study

could

accumulate

relationshipbetweenthevariables.

outcome variables beyond the perception of

empirical evidence at the individual level ofusers, such as organizational performance.

factory managers. In this study, although

In addition, due to the limited size of the

managers in each factory use the same costsample, contextual factors could not be

information, their perceptions of the quality ofconsidered. Previous studies have shown thatthe information differ. This indicates that it isthe demand for cost information, the effect, andinsufficient to investigate cost accounting andthe actual level of cost information differ

information only at the company or factory level,

depending on the contextual factors in thewhich has been the subject of many previous

factory.

studies, and that it is important to also

Despite these limitations, the result of thisinvestigate it at the lower and individual levels.

study that "high quality cost information

However, there are some limitations. First,

meeting various characteristics is useful to

it is necessary to pay attention to theutilize cost information in cost management"interpretation of the results because of thehas many academic and practical implications.

measurement problem of cost information

Based on the findings of this study, further

quality. In this study, from the standpoint that

research is desirable.

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Journal of Japanese Management Vol.5, No.2, May 2021

ISSN 2189-9592

of information load on decision makers’ cue
Acknowledgement

utilization levels and decision quality in a

The original version of this paper won thefinancial distress decision task. Accounting,

Best Paper Award at the Japan Accounting

Organizations and Society 15 (6), pp. 527-542.

Association (JAA) and was published in thisDrury, C. (2015) Cost and Management Accounting

8th Edition. Learning EMEA.

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JAA,

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W.H.

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E.R.

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(Received: December 16, 2020)(Accepted: March 21, 2021)

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