An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Frances A. Kennedy
Clemson University

Sally K. Widener
Rice University

Abstract: Lean manufacturing is a complete business system that combines techniques including just-in-time, total quality management, and total preventative maintenance. We investigate the relation between a strategic lean manufacturing initiative that includes lean accounting practices and the design of the control system. Lean accounting seeks to reduce steps in transaction processing, eliminate standard costs in favor of actual costs, discontinue cost allocations, and re-focus the performance measurement system. In this case study of a manufacturing firm, we develop a theoretical framework that assists in understanding the performance measurement, control choices, and accounting practices associated with lean manufacturing. A primary contribution of this study is the finding that underlying accounting practices mediate the relation between a lean manufacturing initiative and the control system.

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