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A simulation analysis of interactions among intended biases in costing systems and their effects on the accuracy of decision-influencing information

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  • Stephan Leitner

Abstract

On the one hand, management accounting systems increase in complexity, and the frequency and intensity of use of the provided information for decision-making are rising. On the other hand, there is evidence that the provided information is inaccurate, which in most cases incurs economic costs. This paper analyzes the impact of biases in raw accounting data on the accuracy of the provided decision-influencing information. The simulation study presents results concerning single and multiple biases which are intendedly entered into traditional costing systems. The presented results give insights into interactions among biases and indicate that multiple input biases do not necessarily affect the information quality negatively. Surprisingly, in some setups interactions among biases lead to a mitigation or even a compensation among themselves. Furthermore, the findings can constitute the basis for generating efficient organizational data quality policies, i.e., results indicate where (not) to tolerate biases and how to prioritize actions regarding information quality with respect to accuracy and cost of accuracy. Copyright Springer-Verlag Berlin Heidelberg 2014

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  • Stephan Leitner, 2014. "A simulation analysis of interactions among intended biases in costing systems and their effects on the accuracy of decision-influencing information," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 22(1), pages 113-138, March.
    • Handle: RePEc:spr:cejnor:v:22:y:2014:i:1:p:113-138
    DOI: 10.1007/s10100-012-0275-2
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    Cited by:

    1. Jernej Agrež & Nadja Damij, 2015. "Knowledge dynamics assessment in complex organizational systems: a missing person investigation case study," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(3), pages 527-545, September.
    2. Darío Blanco-Fernández & Stephan Leitner & Alexandra Rausch, 2023. "Interactions between the individual and the group level in organizations: The case of learning and group turnover," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 31(4), pages 1087-1128, December.
    3. Friederike Wall, 2016. "Agent-based modeling in managerial science: an illustrative survey and study," Review of Managerial Science, Springer, vol. 10(1), pages 135-193, January.
    4. Graziano Coller & Paolo Collini, 2015. "The optimality of full-cost pricing: a simulation analysis of the price-adjustment dynamics," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 26(2), pages 157-191, August.
    5. Stephan Leitner & Friederike Wall, 2015. "Simulation-based research in management accounting and control: an illustrative overview," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 26(2), pages 105-129, August.
    6. Sina Hocke & Matthias Meyer & Iris Lorscheid, 2015. "Improving simulation model analysis and communication via design of experiment principles: an example from the simulation-based design of cost accounting systems," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 26(2), pages 131-155, August.
    7. Dario Blanco-Fernandez & Stephan Leitner & Alexandra Rausch, 2022. "Interactions between the individual and the group level in organizations: The case of learning and autonomous group adaptation," Papers 2203.09162, arXiv.org.
    8. Stephan Leitner & Doris Behrens, 2015. "On the fault (in)tolerance of coordination mechanisms for distributed investment decisions," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(1), pages 251-278, March.
    9. Paolo Pellizzari & Friederike Wall, 2015. "Simulation in management accounting and management control: editorial," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 26(2), pages 95-98, August.

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