A comparative evaluation of financial and activity-based cost accounting systems in a private university



Journal Title

Journal ISSN

Volume Title


Texas Tech University


Private higher education institution accounting systems provide information to comply with external reporting standards of the Financial Accounting Standards Board. The "official" system is described in a National Association of College and University Business Officers (NACUBO) publication. Although the system provides highly useful information for external reporting purposes, it does not appear to provide highly useful information for internal management decisions.

This study was designed to test if a complementary Activity-Based Costing/Management (ABC/M) system would provide more useful information for internal management decisions than the financial accounting system. A secondary purpose was to define possibilities for future research that would relate ABC/M to other higher education institutions of this type and to other public and private institutions of higher learning.

A single case study was conducted at Hardin-Simmons University. An ABC/M system was designed utilizing commercial software. The internal management information produced by each accounting system was evaluated by staff and administrators with financial management responsibilities as to usefulness for budgeting, financial management, and strategic decision purposes.



Activity-based costing -- Case studies, Accounting -- Software, Decision making -- Case studies, Institutional economics -- Case studies, Cost accounting -- Case studies