Activity based management applied in auditing practice

• Main Authors: Hung, Chi-Jen, 洪啟仁
• Other Authors: Duh Rong-Ruey
• Format: Others
• Language: zh-TW
• Published: 1997
• Online Access: http://ndltd.ncl.edu.tw/handle/62874961309130571149

碩士 === 國立臺灣大學 === 會計學系 === 85 === In recent years, fast growth in local capital markets and increased diversityand globalization of local enterprises have created a tremendous demand forCertified Public accountant''s (CPA''s) services. At the same time, a CPA firmshould maintain a certain size, level of professional competency and amount ofexperience to fulfill client''s requirements. In considering price pressuresfrom competitors and an increase in operating costs, how to effectively andefficiently operate a CPA firm has become a major challenge of the firm''s management.Activity-based management (ABM) focuses on a continuous improvement process.ABM utilizes activity analysis, cost driver analysis and performancemeasurement analysis to minimize the non-value added activities; to improvethe performance of the value added activities; to simplify activities; and toeliminate the differences among processes. In the early stages, ABM haswidely been applied in manufacturing companies. Now, the method is beingextended to service companies. In this research, we used the case studyapproach to evaluate the possibility of applying ABM to auditing practice andto make recommendations to improve the operational performance of a CPA firmfrom the continuos improvement point of view .The results of this study showed that the ABM can be utilized in a CPA firm.The managerial information derived from ABM is much better in comparison tothe information provided from the traditional accounting system. Since thecost of establishing a formal ABM system is very expensive, in order tominimize the establishment cost of a formal ABM system, this study showed thata CPA firm can use the "project" research approach to find a way to improveproject performance, and can use the concept of the ABM "model" to structurethe strategy of the organization (or an engagement). As for the fullimplementation of a formal ABM system, the CPA firm should fully evaluate thecost-effectiveness of the establishment of a formal ABM system.