Factors associated with the adoption of cost accounting system by selected travel agencies in hanoi, vietnam

34 The Accountants’ and the Managers’ Perception of their Level of Awareness and Understanding, Ease of Use, and Usefulness of Cost Accounting System ……….. 42 The Accountants’ and the Ma

i

AGENCIES IN HANOI, VIETNAM

_

A DISSERTATION Presented to the Faculty of the Graduate School

Southern Luzon State University, Lucban, Quezon, Philippines

in Collaboration with Thai Nguyen University, Socialist Republic of Vietnam

Submitted in Partial Fulfilment of the Requirements for the Degree

DOCTOR OF BUSINESS ADMINISTRATION

A program offered by Southern Luzon State University,

Republic of the Philippines in collaboration with

Thai Nguyen University, Socialist Republic of Vietnam

has been approved by Oral Examination Committee

WALBERTO A MACARAAN, EdD EDUARDO T BAGTANG, DBM

MELCHOR MELO O PLACINO, PhD ALICE T VALERIO, PhD

CECILIA N GASCON, PhD

Chairman

EDWIN P BERNAL, DBA APOLONIA A ESPINOSA, PhD

Accepted in Partial Fulfilment of the Requirements for the Degree

Doctor of Business Administration

_ WALBERTO A MACARAAN, EdD

Date Vice President for Academic Affairs

iii

This is to certify that the dissertation entitled "THE FACTORS

ASSOCIATED TO ADOPTION OF COST ACCOUNTING SYSTEM BY SELECTED TRAVEL AGENCIES IN HANOI, VIETNAM", orally defended/

presented under the DBA Program jointly offered by Southern Luzon State University of the Republic of the Philippines and Thai Nguyen University of the Socialist Republic of Vietnam, embodies the result of original and scholarly

work carried out by the undersigned

This dissertation does not contain words or ideas taken from published sources or written works by other persons which have been accepted as basis for the award of any degree from other higher education institutions, except

where proper referencing and acknowledgement were made

DOAN THI QUYNH ANH (ANGEL) Researcher/Candidate

Date Orally Defended: 14th, December 2013

to make her complete the dissertation and the DBA program;

Dr Edwin Bernal, who helped her with detailed guidance and

instructions to complete her research;

Representatives from the Southern Luzon State University and the Thai Nguyen University, as well as the teachers and staff of the ICT and academic affairs office who encouraged and helped her and the members of the class to persevere in completing our dissertations ;

The directors and staffs of all enterprises, who have responded to

her surveys and for their enthusiastic support and participation

For her family, parents, husband, children, and all of her dear friends, as always, her sincerest love and gratitude for the encouragement,

understanding and support

Doan Thi Quynh Anh - Angel

v

This dissertation is wholeheartedly dedicated to my husband’s parents and my mother; my husband Nguyen Huu Hung; and

mytwo childrenNguyen Hung Cương and

Nguyen Ngoc Quynh Chi I also would

like to dedicate my work to the

tourism industry in

.Hanoi

DTQA

vi

PAGE

TITLE PAGE ……… i

APPROVAL SHEET ……… ii

CERTIFICATE OF ORIGINALITY ……… iii

ACKNOWLEDGMENT ……… …… iv

DEDICATION ……… v

TABLE OF CONTENTS ……… vi

LIST OF TABLES ……… viii

LIST OF FIGURES ……… x

ABSTRACT ……… xi

CHAPTER I INTRODUCTION ……… 1

Background of the Study ……… 2

Objectives of the Study ……… 3

Hypotheses of the Study ……… …… 4

Significance of the Study ……… 4

Scope and Limitation of the Study ……… ……… 6

Definition of Terms ……… 7

II REVIEW OF LITERATURE ……… 10

Theoretical Framework ……….… 25

Conceptual Framework ……….… 27

III METHODOLOGY ……… 29

Locale of the Study ……… 29

Research Design ……… 29

Population, Sample and Sampling Technique … ……… 30

Research Instrument ……… 30

Data Gathering Procedure ……… 32

Statistical Treatment ……… …….…… 32

vii

Respondents’ Profile ……… 34

The Accountants’ and the Managers’ Perception of their Level of Awareness and Understanding, Ease of Use, and Usefulness of Cost Accounting System ……… 36

Factors Significantly Affecting the Attitude of the Accountants and the Managers of Travel Agencies in Adopting a Cost Accounting System ……… 42

The Accountants’ and the Managers’ Perception of their Level of Awareness and Understanding, Ease of Use, and Usefulness of Cost Accounting System ……… 56

The Accountants’ and the Managers’ Attitude Towards Adherence to the Cost Accounting System in the Management of Costs in Travel Agencies ……… 62

V SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS Summaryof Findings ……… 66

Conclusions ……… 67

Recommendations ……… 68

REFERENCES ……… ……… 70

APPENDICES ……… 72

Appendix A - Survey Questionnaire ……… 72

CURRICULUM VITAE ……… 76

4.4 Perceived Ease of Use of Cost Accounting System ……… 40 4.5 Perceived Usefulness of Cost Accounting System ……… 42 4.6 Attitude Toward Adherence to Cost Accounting System

in Cost Management ……… 44 4.7 Summary of the Respondents’ Perception and Attitude

Towards Adoption of Cost Accounting System ……… 46

4.8 Relationship between the accountants’ and the managers’

perception of their level of awareness and understanding

of cost accounting system and their attitude towards

adoption of the same cost accounting system in travel

agencies cross tabulation ……… 48

4.10 Relationship between the accountants’ and the managers’

perception of ease of use of cost accounting system and

their attitude towards adoption of the same cost accounting

system in travel agencies ……… 51

4.12 Relationship between the accountants’ and the managers’

perception of usefulness of cost accounting system and

their attitude towards adoption of the same cost accounting

system in travel agencies ……… 53

ix

4.14 Relationship between the accountants’ and the managers’

perception of their level of awareness and understanding,

ease of use, and usefulness of cost accounting system

and their attitude towards adoption of the same cost

accounting system in travel agencies ……… 55

4.16 Independent Samples Test(The accountants’ and the

managers’ perception of their level of awareness and

understanding of the cost accounting system in travel

4.17 Independent Samples Test(The accountants’ and the

managers’ perception of ease of use of the cost

4.18 Independent Samples Test (The accountants’ and the

managers’ perception of perceived usefulness of the cost

4.19 Independent Samples Test (The difference between the

accountants’ and the managers’ attitude towards

adherence to the cost accounting system in the

x

1 Theory of Reasoned Action from Davis, Bagozzi&Warshaw

2 Theory of Planned Behavior (Ajzen, 1985) ……… 23

3 Technology Acceptance Model from Davis, Bagozzi

&Warshaw (1989)

………

24

4 Classification of Cost in Travel Business ……… 27

5 Cost Accounting System Adoption Factors ……… 28

xi

Title of Research : FACTORS ASSOCIATED WITH THE ADOPTION

OF COST ACCOUNTING SYSTEM BY SELECTED TRAVELAGENCIES IN HANOI, VIETNAM

Researcher : DOAN THI QUYNH ANH (ANGEL)

Degree Conferred : DOCTOR OF BUSINESS ADMINISTRATION

Name and Address

of Institution

: Southern Luzon State University Lucban, Quezon, Philippines and Thai Nguyen University, Socialist Republic of Vietnam

Adviser : Dr Edwin P Bernal

Year Written : 2013

Inrecentyears, therapid developmentofworldeconomyin general and of Vietnam in particularmadepeople's living standard improved.One of the enterprises developed stronglyinrecent years wasbusinesstravel services To effectively measure the cost of service, this kind of enterprise requires the use

of appropriate accounting system which is also necessary to effectively offer its clients the travel services at a most reasonable price As well, the cost accounting system aids the enterprise to measure its profitability and sustainability

This dissertation tried to find out the factors affecting the adoption of the cost accounting system in selected travel agencies in Hanoi, Vietnam The primary data gathering tool used in this research project was a questionnaire Some 150 survey respondents who were accountants and managers coming from the various travel agencies operating in Hanoi were randomly selected

xii

generally female while 80% of them were under 40 years old Sixty four percent (64%) of the respondents were accountants; 36%, managers Majority have solid background in either business or accounting; (2) The accountants and the managers have high perception of their level of awareness and understanding of cost accounting system; (3) Both the accountants and the managers highly agreed on their positive perception regarding ease of use and of the usefulness cost accounting system; (4) The accountants’ and managers’ attitude towards adherence to cost accounting system in cost management was high; (5) The factors that significantly affect the accountants’ and the managers’ attitude towards adoption of cost accounting system are: (a) Attitude towards adherence to cost accounting system, (b) Awareness and understanding of the system, (c) Ease of use of the system, and (d) Usefulness of the system

Considering the noted weaknesses in the present-day implementation and adoption of cost accounting system as well as the inherent benefits of effective and efficient management of the system can bring to the travel agencies, the following were recommended: (1) Travel agencies should expand the role of their accountants from merely record keepers and processors of supporting documents to financial and business advisors; (2) Re-tool the accountants in the use of international financial reporting standards that fit the requirement of the travel agencies; (3) Enhance the competencies of the managers by providing them adequate knowledge and skills in using financial information in making informed decisions; and (4) Appraise the cost accounting system that the travel agencies are adopting

Chapter I INTRODUCTION

As Vietnam rides in the development of world economy, its hospitality/tourism industry had gained remarkable leap Demand in a wide-range of hospitality-related products and services increased as people's living standard improved This included products and services in travel services which is one sector in the multi billion-dollar world-wide hospitality industry

Productsand services intravel agencies are designed to satisfyspecial needsof consumers such as understanding the culture, tradition and the historicaltreasures of one locality, appreciating natural beauty of the place, experiencing the climate, foods, events and festivities of the area, and a lot of activities simply designed for sightseeing and for rest and recreation The demand for travel products and services is not very stable as it easily changes due to instabilityofthe climatic conditions and the economicand political situation of the particular tourism destination It therefore requires that players in the travel business to be more creative and innovative to anticipate changes in the business landscape in order to cushion the impact of slack time in the business

On the other hand, it also requires that industry players fully graspthe characteristicsof tourism and travel productsto be able to organizebusinessactivities that optimally meetthe needsofclients andensureenhancedbusiness performanceon the basis of strict cost control

It also requires strong organizational skills as well as understanding of the upstream and downstream links and costs which are, more often than not, not

too easy to quantify as transfers of values take place with the transfer of intangible subjects of business transactions While the application of sound managerial accounting techniques and concepts is inevitably necessary, all must start from the solid understanding and appreciation of cost accounting and the adoption of appropriate cost accounting system

Background of the Study

Vietnam’s tourism industry had already achieved a considerable amount of success By the end of 2012, Vietnam had 1,120 international tour operators, 11,840 recognized card-holder tourist guides, 4,809 card-holder instructors and 7,031 card-holder local tourist guides for international travels There are tourist accommodation establishments all over the country estimated at 13,500 with 285,000 chambers These include 57 5-star hotels,

147 4-star hotels, and 335 3-star hotels In general, adoption to cost

accounting systems in the tourism industry is considered deficient

Determining the cost of products and services in a travel agency poses

a great challenge for the firm’s accountants and managers in as much as the business’ price offerings depend largely on the relevant costs Doubly challenging is the implementation of a firm’s policy on cost allocations because this requires a deal of rationalization so as not to overburden one product/service while others overburdened with unnecessary costs This therefore requires the identification and the use of appropriate cost driver(s) to achieve full rationalization of the system Further, to achieve comparative and competitive advantages, it is necessary that costs associated with the

implementation of activities in major business functions along the value chains should be analyzed as to whether these are value-adding or non-value adding costs Obviously, only value adding activities are client-focused activities and therefore add to the achievement of the value expectations of the clients While cost accounting is a necessary requirement to achieve more in the travel business in Hanoi, less has been benefiting fully from it To determine the factors that drive the sector to adopt cost accounting system is the major reason why this research was conducted

Objectives of the Study

The general objective of this research was to determine the significant factors associated to the adoption of cost accounting system for Hanoi-based travel agencies The study was conducted to meet the requirements of the following specific objectives:

1 To determine the profile of the respondents in terms of gender, age, position and field of specialization

2 To describe the accountants’ and the managers’ perception of their level of awareness and understanding, ease of use, and usefulness of cost accounting system

3 To identify the factors which significantly affect the attitude of the accountants and the managers of travel agencies in adopting a cost accounting system

4 To statistically test the difference in the accountants’ and the managers’ perception of their level of awareness and understanding, ease of use, and usefulness of cost accounting system

5 To statistically test the difference between the accountants’ and the managers’ attitude towards adherence to the cost accounting system in the management of costs in travel agencies

Hypotheses

The following hypotheses were tested using inferential statistical tools:

Hypothesis 1: There is no relationship between the accountants’ and the

managers’ perception of their level of awareness and understanding, ease of use, and usefulness of cost accounting system and their attitude towards adoption of the same cost accounting system in travel agencies

Hypothesis 2: There is no difference in the accountants’ and the managers’

perception of their level of awareness and understanding, ease of use, and usefulness of cost accounting system

Hypothesis 3: There is no difference between the accountants’ and the

managers’ attitude towards adherence to the cost accounting system in the management of costs in travel agencies

Significance of the Study

This study will be significant to the following groups and individuals:

Hospitality Industry and Travel Agencies This research study will

be significant to the hospitality industry of Vietnam As the researcher accomplished its objective of determining the factors that significantly affect the adoption of effective cost accounting system among the travel agencies, it also aims to provide the tourists with reasonable prices of the services and products that the various agencies offer The benefits of effective cost accounting system are not only reflected to various travel agencies but to the hospitality industry in Vietnam through the tourists who will be better satisfied

by the competitive pricing policy in the travel agencies

Management of Travel Agencies The management of various travel

agencies shall be benefited directly when these business organizations are able to appraise, improve and implement an effective accounting system In particular, sound accounting system must necessarily mean being able to gather, process, report, and evaluate operating result and financial status of the travel agencies The system is a tool that facilitates effective

management of a particular travel agency

Accountants and the Professional Association of Accountants

This research would be an eye-opener for accountants and the professional association of accountants It is not enough that an accountant is skillful in the art and science of accounting It is equally important that accountants ensure that managers and other responsible officers understand and appreciate the value of an accounting system so that the latter do not alienate themselves and be able to take full advantage of the use of relevant information that maybe generated from the use of the system It is also

important that accountants maximize their roles as business and financial advisors in order for their professional services to become more and more

relevant and useful

Tourists The tourists benefit from this work when travel agencies are

able to account appropriately the costs to clients of the various products and

services

Government Good accounting ofrevenues, costs and expenses

would mean a good assurance for the government tax agency to be able to

assess and collect the most accurate amount of taxes

Academic Communities.This research shall become a rich source of

literature for both the students and faculty who are interested in such topics as accounting for travel agencies in Hanoi

Scope and Limitations of the Study

This research was confined to Hanoi area and involved some 104 accountants and managers of the various travel agencies It excluded the travel guide and other staff among the respondents, a decision which was a departure from the original plan Specifically, the researcher gathered data from seven (7)businesses described as models in tourtravelserviceinHanoi, which included astate-owned enterprise specializinginthefieldofbusiness travel, international travel, and domestic tourism for both local and foreign tourists

In particular, respondents came from Vietnam Travel and Marketing Transports Company, Vietnam National Administration ofTourism, Thang Loi andHanoi Tourism, AsialinkTravel Joint Stock Company, New Horizons Travel Joint Stock Company, and Saomai Travel Company Besides, theauthorsalsoconductedsurvey from other 25travelcompanies in the areaofHanoi

Meanwhile, the research focused on determining the factors that affected the adoption of cost accounting system among various travel agencies It examined the perception of both the accountants and the managers on the level of their awareness and understanding, ease of use, and the usefulness of the cost accounting system It further examined their attitude towards adoption of cost accounting system for effective management

of costs in travel agencies

The research did not delve on the technical aspect and on the appraisal and design of cost accounting system Determining, therefore, the appropriateness of each cost accounting system in the selected travel agencies was out of the scope of this research

Definition of Terms

The following terms has been operationally defined:

Cost is the value of money that has been used up to produce something, and

hence is not available for use anymore In business, the cost may be one of acquisition, in which case the amount of money expended to

acquire it is counted as cost In this case, money is the input that is gone in order to acquire the thing This acquisition cost may be the sum of the cost of production as incurred by the original producer, and further costs of transaction as incurred by the acquirer over and above the price paid to the producer Usually, the price also includes a mark-

up for profit over the cost of production

Cost Accounting System It is the process of collecting, analyzing and

evaluating costs of products and services Generally, a cost accounting system consists of five parts and they include input measurement, inventory valuation, cost accumulation, cost flow assumption and recording of inventory cost flows As applied in travel agencies, it is concerned with assigning and allocating of the appropriate amount incurred for the creation of a particular tourism product and the offering and actual delivery of travel services

Ease of use of cost accounting system is perception of accountants and

managers on the level of difficulty in use of use cost accounting system The ease of use of cost accounting system may refer to the ability of accountants and managers in using the cost accounting system

Level of awareness and understanding of cost accounting system is the

perception of accountants and managers of cost accounting system base on their knowledge about accounting, cost, and cost accounting system

Travel agencyis a private retailer or public service organization that provides

tourism related services to the public which include airlines services, car rentals, cruise lines, hotels, railways, and package tours providers

In addition to dealing with ordinary tourists, most travel agencies have

a separate department devoted to making travel arrangements for business travelers and some specialize in commercial and business travel only There are also travel agencies that serve as general sales agents for foreign travel companies, allowing them to have offices in countries other than where their headquarters are located

Usefulness of cost accounting system is the perception of accountants and

managers on the usefulness of cost accounting system

Chapter II REVIEW OF LITERATURE

This chapter authors reviews the related literature and studies on travel industry in Vietnam in general, Hanoi travel in particular This chapter provides the reader with sufficient theory about cost accounting, and the usefulness of cost accounting system It discusses theories framework and conceptual framework

Tourism Industry and the Travel Sector

Vietnam’s tourism industry had already achieved a considerable amount of success By the end of 2012, Vietnam had 1,120 international tour operators, 11,840 recognized card-holder tourist guides, 4,809 card-holder instructors and 7,031 card-holder local tourist guides for international travels There are tourist accommodation establishments all over the country estimated at 13,500 with 285,000 chambers These include 57 5-star hotels,

147 4-star hotel, and 335 3-star hotels

During the existence of Vietnam for 53 years, its tourism industry saw its ups and downs It had gone through its difficult times including critical economic conditions, natural disasters, widespread epidemics, global conflicts and local wars and terrorism However, it had, so far, through difficult times, achieved considerable milestones

By far, as of 2013, Vietnam Tourism had already identified some key tasks towards bringing the industry to a greater height, which include(1) continuous implementation of the development strategy embodied in master

plan of Vietnam Tourism 2020, vision 2030;(2) promotion of activities in the

E - tourism marketing and branding of Vietnam tourism as provided for in the tourism logo and slogan to attract tourists from 8 key tourism markets of China, Japan, Korea, Malaysia, Thailand, Australia, France, and Russia; and (3) exploitation of tourism development in Ha Long Bay and a number of other prominent tourism points to ensure the sustainability, high economic efficiency, image building heritagein these tourism areas

Travel business in Hanoi Hanoi is strategically located It is the capital

of Vietnam, the center of politics, economic activities, culture, scientific, and

an important traffic highway of the country As one of the largest tourist centers of the country, Hanoi plays a very important role in the tourism development in general and in particular, of Tonkin International tourist arrivals in Hanoi comprise about 30 % of its visitors It capitalizes on its historical and cultural advantages, it placed domestic tourism at the forefront

of the industry in this part of the country Hanoi is also a center for receiving and deployment of tourist travels to the northern region and the other regions

in the territory of Vietnam as well as to countries in the region

As a tourist destination, Hanoi boosts a rich assembly of natural landscape wonders which include HanoiWestLake, HoanKiemLake, QuanSonLake, Suoi Hai, and Van Tri It also impresses tourist by its special dress relic Thang Long Imperial Citadel, the Giong festival at Phu Dong temple and temple Soc, and the Ca tru which is recognized by UNESCO as a world cultural heritage In addition, the epitaph of Dr Le Mac at Van Mieu Quoc Tu Giam, a recognizedUNESCO world documentary heritage had

become a tourist attraction Because of these,Hanoi has always been appreciated by the international tourists as an attractive destination

With the planned area expansion to 3.6 times the size of the old area, and with a population of over 6.5 million people, Hanoi opens up an exciting potential for the tourism industry With nearly 5,000 sites including 803 sites which had been ranked first in number of historical monuments, Hanoi had achieved eligibility to develop cultural, historical, and spiritual tourism In addition to all these, Hanoi is emerging as the ideal location for eco-tourism, leisure, and entertainment

Hanoi is also home to cultural establishments systems, and information center of the country with the proliferation media facilities and establishments including radios, televisions, major theaters, major museums, the performing arts theater folk such as rowing - water puppetry These are very attractive to international and domestic travelers

Since several years back, Hanoi has a number of prestigious travel magazines such as the World 's leading Travel and Leisure ( U.S ), Smart Travel Asia ( HKG ) It has since won the title of Top 10 tourist destinations of Asia

International visitors to Hanoi are increasing in number It rose by an average of 18-20 % every year In 2008, Ha Noi welcomed 1.3 million visitors;

in 2009, due to the global economic crisis and the disease, Hanoi had some 1.02 million visitors much lower in number compared to the previous year; in

2010, during the celebration year of the one thousandth year of Thang Long -

Hanoi Cabinet and the National Tourism Year, Hanoi’s tourist arrivals increased to 1.7 million; in 2011,the city welcomed 1.84 million international passengers; and in 2012,it welcomed over 2 million international tourist

Markets of domestic tourists going to Hanoi comprise a large proportion, with an average annual passenger traffic accounted for of over 20

% of domestic tourists in Vietnam In 2002, Hanoi welcomes 2.8 million, by

2009 had brought 9.2 million, in 2010 to reach 10.6 million; in 2011 to reach 11.6 million; in 2012 to reach over 12 million passengers

Domestic tourism inHanoiis also on the rise People travel for many different purposes such as shopping, visiting relatives and for healing In fact, 38.6% of visitors to Hanoi stay at hotels; 24.4 % in guest houses; 21.8% in lodging houses; and 15.2% stay with friends and relatives Shopping is a pastime, especially of domestic tourists Spending on shopping accounted for the highest proportion of their budget at 27.7%; followed by food, 22.5%; accommodation, 22.1% and the rest were spent for transport and entertainment

This year, 2013, Hanoi has nearly 500 international travel agencies and close to 500 domestic travel agencies It has about 50 companies and individual business households transporting tourists Hanoi focused cultural institutions such as the Opera House, the NationalCinemaCenter, the major museums, the performing arts theater folk as rowing water puppetry are very attractive to international travelers and domestic tourists Meanwhile, the park system such as Lenin Park , Thu Le Park , Park Dong Da , Youth Park , West

Lake Water Park , Bao Son Paradise Park , Vietnam and Phu Thanh Chuong are increasingly becoming tourist attractions

Culinary activitytours in Hanoi were strongly being developed The dining establishments in Hanoi has since evolved and become rich and diverse with the coming of Thai restaurants, Japanese restaurants, Korean restaurants and other array of foreign branded eateries and cuisine like KFC and Lotteria that blended with the locally owned and operated food establishments which ranged from well elaborated spaces to bars, cafés, and pubs snack kiosks These are all present in Hanoi and they all meet the culinary needs of the great majority of visitors and residents

In the future, the direction of Hanoi is towards the optimization of the exploitation of valuable natural resources including the enrichment of cultural heritage, and preservation of historical diversification which are expected to positively impact on the continuous development of hospitality industry which would bring about improvements in human resources and of the quality of life

of the people in Vietnam

Accountingas the Language of Business

Traditionally, accounting has been defined as the process of recording, classifying and reporting the financial activities and transactions of a business enterprise The process of recording and classifying business transactions is commonly referred to as bookkeeping The bookkeeping function of accounting skill forms the foundation of much accounting activity An accountant is usually defined as “one who is skilled in accounting” At the

beginning of the twentieth century, however, the role of accountantdid not extend much beyond a bookkeeping function, that is, the keeping of records according to a set of well-defined rules and procedures At this time, accountants were generally referred to as “bookkeeper” In the business world

of the twenty-first century, the activities and responsibilities of accountants extended far beyond mere bookkeeping and the keeping records They included the interpretation and analysis of accounting report, the design and operation of computer based system, the planning and conduct of business activities, and the understanding of the complex accounting regulations that

have accumulated over many years

Accountants serve a potentially wide variety of user groups The many different users of accounting information include the owners or shareholders

of a business entity, the people who have lend money to the entity, the entity’s employees, government agencies and other social and political interest group, such as environment group and trade unions In providing information for these users, accountants frequently need to consider more thanjust financial factors

Accounting has a wide-ranging function and hence abroad definition of the field of accounting is needed, one that embraces the variety of professional activities engaged in by accountants Several years ago a committee of the American Accounting Association defined accounting beyond its mere traditional definition (the recording, classifying and reporting

of transaction) This committee defined accounting in a broader and more modern context as the process of identifying, measuring and communicating

economic information to permit informed judgments and decisions by users of information

Accounting is called the language of the business in the sense that the responsibility of learning accounting is very similar to the task of erudition a new language It is complicated by the fact that heapwords used in accounting mean almost the same but not fairly the same thing as the identical words used in everyday non -accounting usage

Cost management in travel agency The implementation of a cost accounting system is an important step for a service business Implementation begins with identification of the correct costing system for the business, moves on to deployment of the system and finishes with post-deployment support to train employees on how to use the system effectively Best practices in cost-system implementation focus on all three parts of the

implementation process

There are cost accounting systems designed for the sole proprietorship

on up to the largest multinational corporation It is important to remember that bigger isn't necessarily better Service business owners should look to implement a cost accounting system that is matched to the complexity of their business Less-complex companies may be best using an off-the-shelf software system or a system that is integrated into their current accounting software However, companies that have many products or complex manufacturing processes may wish to seek a more customized solution

Implementing a cost accounting system is much easier when a firm only have to implement the system once Managers should be careful to choose a cost accounting system that is scalable to the company For example, even if the firm only manufactures a handful of products currently, it may wish to implement a cost accounting system that can handle more products as offerings grow

As company implements a cost accounting system, it is important to involve employees in the process Employees who are involved in the process

of implementing the system are more likely to have bought in to the transition Not only does this help employees understand the system more quickly, but these employees can serve as ambassadors to other employees who weren't involved in implementation Often, the employees who were involved in implementation are more successful in increasing trust of the new system than management This occurs because other employees view these employees as having less incentive to blindly approve of the implementation

Most service business owners are experts in their fields, but few are experts in the implementation of accounting systems as well Managers and small-business owners should consider consultation with a professional accountant before spending time and resources choosing and implementing a cost accounting system The money that firm spendsin seeking professional help can buy time for the managers/owners to focus on business operations

Meanwhile, contents related to cost accounting system have been researched by Vietnam authors since 1990 with different research, especially

in doctoral dissertation

Nguyen Viet(1995) has researched on “Completing Vietnam accounting system” Author Pham Van Duoc(1997) also studied “How to set

up contents and apply cost accounting in Vietnam enterprises” and many other researches

Pham Quang(2002), the author built up fundamental rules to establish and apply cost accounting system in businesses to provide useful information for managers in managing their businesses and set up plan, control business’s operation

Even Giang Thi Xuyen (2002) researched on “Holding management accounting and analyzing business in state enterprise”

Management accounting is researched more carefully, in detailed subject and narrower scale Intensive research on management accounting must be mentioned by author Tran Thi Hong Mai(2003) with the subject “

“Competing cost accounting on Loans Vietnam businesses” This dissertations not only systematize, analyze cost accounting on loans under international accounting standard as well as trends of developing countries to create a basic theory but also research, analyze cost accounting real situations on loans in Vietnam in different periods to clarify the advantages and disadvantages to premise for perfect solution for businesses in decent loans, help accounting information users to make decent decisions in business activities

Also research on relationship between management accounting and cost accounting and price making with author Tran Van Dung, Le Duc Toan,

andDinhPhucTieu(2003) with his researcher Completing cost accounting and price making with enhancing business management in Vietnam Air transport”

Nguyen Thi Hang Nga(2004) studied “Completing cost accounting system in Vietnam petrol businesses” In this dissertation, the author started

at characteristics and development trends of Vietnam petrol Corporation in order to make solutions for completing cost accounting system for member enterprises and the whole corporation

Management accounting is studied further, narrower in scale but deeper in content Duong Thi Ma Ha Tram(2004) studied “Build up the cost Accounting System in Garment Businesses of Vietnam” Starting at the characteristics of Garment sector which has high development speed, it contributed remarkably for the country, but has to face severe competitions, especially when Vietnam integrate on to regional and global economy Garment sector has to face huge challenges forcing businesses to improve management quality in which accounting, especially cost accounting is very important

Pham ThiThuy(2007) has researchedthe content “Setting accounting sample in expense management in enterprises producing pharmaceutical products in Vietnam” The thesis has been studied carefully through typical characters of pharmaceutical production section, then further study, expense management in pharmacy enterprises in Vietnam through periods and judged that real situation of accounting expense in these enterprises is not really suitable to make pharmacy section and it is difficult to meet information requirements to make suitable decision on business

Tran The Nu (2012), on the other hand, has studied “EstablishingCost Management Accounting System in Vietnam’s small and medium trade enterprises” The thesis collected systematically relevant issues fromthe accounting management of medium and small commercial enterprises Basedfrom this research, accounting management in these enterpriseshelp them to have effect method in their accounting system

Also, Nguyen Thi Ngoc Lan (2012) systematized and developed the theoretical issues on the cost management accounting in businesses service enterprises in general and in the road transport companies in particular This thesis indicated the status of cost management accounting in Vietnam trucking company, giving the advantages and disadvantages and the causes

to propose solutions to complete product transport cost accounting in Vietnam trucking company to provide useful information for executives in making decisions

There are many scientific studies about managing accounting with variety of different topics and scopes However, all studies about cost accounting focus on managing accounting for state enterprises and big economic corporations in different areas There is little study about building cost accounting in service enterprise; especially travel industry.To govern these enterprises effectively, suitable accounting information is needed

Many research achievements can help researchers identify the basis for the resistance toward the behavior, and then design effective ways to overcome it One approach might be just to study the psychology, and other disciplines have studied attitude, attitude change, and satisfaction A richer

study of behavior, behavioral intention, and other behavior determinants, however, would provide a more complete assessment of managements’ position toward the behavior The theory of reasoned action (TRA) examines attitudinal and normative influences on behavior, which might explain the reasons for managements’ reluctance toward the behavior Ajzen and Fishbein (1975) developed TRA thatshows one’s intention to perform or not to perform an action (behavioral intention) is the immediate precursor to the actual behavior The TRA model introduced two factors that affect behavioral

intention: attitude toward the behavior and subjective norms Attitude involves

judgment whether the behavior is good or bad and whether the actor is in favor of or against performing it Subjective norm is the perception of how one ought to behave From the information systems perspective, one relevant element of TRA is its assertion that other factorsinfluence behavior including systems design variables, user characteristics, task characteristics, political influences and organizational structure by influencing attitude toward the behavior, subjective norm or their relative weights (Davis et al., 1989)

Figure 1 Theory of Reasoned Action from Davis, Bagozzi & Warshaw (1989)

Thismodelabove canbesummarizedbyanequation:

The TPB was proposed as an extension to the TRA as mentioned earlier, by Ajzen in 1991, the context in this behavior was constructed When applied to the acceptance of technology systems, services or attitude toward using the system, the model contains five concepts As in TRA, it includes behavioral attitudes, subjective norms, intention to use and actual use However, this theory transfers behavioral control to perceived construct Perceived behavioral control covers both the intention to use and the actual usage Actual usage is in turn a weighted function of intention to use and perceived behavioral control Control aspects of the observation is introduced into the model In line with the TRA and TPB, Eining & Christensen (1991) suggested that these contribute to intentions, which in turn lead to behavior Empirical results showed that all the variables except socio-legal attitude were significant in explaining the variation in technology applications’ behavior

Figure 2.Theory of Planned Behavior (Ajzen, 1985)

Thetheory postulatesthatthesethreedirectfactors(AB,SN,and PBC)influencetheindividual’sintentiontoperformagivenbehavior(I),

As mentioned earlier, TRA and TPB, the technology acceptance model (TAM) is adopted to be the most influential model among those models above TAM is the theoretical model that attempts to explain the relationship between user attitudes, perceptions, beliefs, and eventual system use TAM

was proposed by Davis in 1986 in his doctorate study Since then, it had been tested and extended by many researchers Davis (1989) and Davis, Bagozzi and Warshaw (1989) proposed TAM to address why users accept or do not accept IT in their field of work TAM is an adaptation of TRA developed by Fishbein and Ajzen (1975) to explain and predict the behaviors of people in a specific case

Figure 3 Technology Acceptance Model from Davis, Bagozzi & Warshaw

(1989)

Davis (1989) used Fishbein and Ajzen’s method to measure attitude towards using (ATU) and behavioral intention to use (BIU) are common to TRA and TAM He had chosen not to keep the subject norms (SN) because of

a bit effect on BIU Depend on TAM, perceived usefulness (PU) is proposed

to have a direct effect on attitude towards behavior and BIU On the other hand, perceived ease of use (PEU) influences both PU and attitude towards behavior Furthermore, the model theorizes that the effects of external variables on intention are mediated by PEU and PU Accordingly, attitude towards behavior shapes BIU and behavioral intention (BI) influences actual system use (AU) Moreover, as Venkatesh et al., 2003 suggested that four

key determinants namely as performance expectancy, effort expectancy, social influence, and facilitating conditions which are also effected by gender, age, experience, and so on

Theoretical Framework

Management accounting also collect other information relevant to business decisions, such as: information on labor, information on the use of assets

To collect good information to meet the information needs of past and future information of business management, accounting management incorporates the analysis of this information to advise administrators business plan choice

Businesses should have a reasonable business strategy to survive This means that there is a need to estimate production The process of building cost estimates is associated with the business of governance.Facility conditions promote positive, proactive, and strengthen inspection and control

Business processes of the enterprise consisting of many processes are closely related to each other Each different process management requirements also vary, requiring specific target estimate to suit each specific business process In the enterprise business system production estimates include many targets, but estimates of consumption is a major factor affecting the entire line estimation of the business, its impact and driven to the other estimates Consumption estimates as the basis for estimation of production

purchase to meet the demand for the production or sale of products Based

on production estimates, estimation of production costs determines business results Therefore, the estimation process builds a system that estimates the scientific production, which is a basis for organizations’operation to achieve the highest efficiency

Behavior costs means that these costs will change how business activity levels change This classification needs planning, cost control and actively regulate the cost of management According to this classification, the entire costs of the enterprise are classified into:

Variable costswhichare the expenses proportional to the level of

activity, wherein variable costs for one unit of product is stable, the total variable costs change when output changes and variable cost is zero when inactive

The fixed costdoes not change when the level of activity changes (to

an appropriate extent), the costs vary inversely with the level of activity However, when the level of development activities is beyond the scope of compliance, cost is forced to change to fit in with the development of the activity level Usually the fees include: equipment depreciation costs, advertising costs, rent, and insurance

Mixed Costis the cost which includes variable costs and fixed fee

element

Figure 4 Classification of Cost in Travel Business

Conceptual Framework

From the theories and concept

affecting the adoption of cost accou

Classification of Cost in Travel Business

Figure 5 Cost Accounting System Adoption Factors

To apply the cost accounting system, the researcher usedthe Conceptual Framework in which the first factors are the respondents’ profile which includes: gender; age; position; field of specialization From that, it estimates the accountants’ and managers’ perception on cost accounting system: perception of awareness and understanding; perception of ease of use; perception of usefulness Based on the respondents’ profile and their perception, the study estimatedthe accountants’ and managers’ attitude toward adoption of the cost accounting system From the result of the estimation above, finding the factors affecting the adoption of the cost accounting system was done