The Effects of CFO Characteristics and Historical Financial Performance on the Adoption of Advanced Costing Practices: Evidence from Thai Listed Companies
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The purpose of this paper is to examine the influence of determinant factors on the extent of advanced costing practices (ACPs) adoption in Thai listed companies operating in three industries: industrial, consumer products, and services. This study is in contrast to most previous studies which relied predominantly on contingency theory. The study mainly draws on upper echelons theory (UET) to examine the impact of chief financial officers’ (CFO) demographic characteristics on the ACPs usage, specifically tenure and education levels. In addition, we investigate the effect of historical financial performance on advanced management accounting practices on costing systems that have not been conducted in Thailand. The datasets were compiled from primary and secondary sources, and hypotheses were tested using partial least squares structural equation modelling (PLS-SEM). Results indicate that CFOs with shorter tenures are more likely to implement the ACPs. Similarly, firms with low profitability are more inclined to use the ACPs extensively. Unexpectedly, the CFO's education level slightly influences the adoption of costing practice sophistication. Our article contributes to the UET and management accounting literature, as limited research has been undertaken in developing economies.
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