An Investigation of Management Practices in Raw Material Cost Accounting: Evidence from Iraqi Industrial Companies

Ali  Awadh Atshan; Javad Rezazadeh; Sahar  Sepasi

Authors

Ali Awadh Atshan PhD student, Department of Accounting, Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran. Author https://orcid.org/0000-0001-6084-6911
Javad Rezazadeh Associate Professor, Department of Accounting, Faculty of Management and Economics, Tarbiat Modares University, Tehran, iran Author https://orcid.org/0000-0002-0204-2509
Sahar Sepasi Associate Professor, Department of Accounting, Faculty of Management and Economics, Tarbiat Modares University, Tehran, iran Author https://orcid.org/0000-0001-7870-7231

Keywords:

cost accounting, raw material cost management, inventory management, cost control, Iraqi industrial companies, supply chain challenges

Abstract

This study aimed to investigate management practices in raw material cost accounting and their effects on cost control and optimization in Iraqi industrial companies. In terms of purpose, the study was applied, and in terms of nature, it employed a descriptive-correlational survey design. The statistical population consisted of financial managers, cost accountants, and cost-control specialists working in Iraqi industrial companies. Using Cochran’s formula, the sample size was determined to be 384 participants, who were selected through stratified random sampling. Data were collected using a researcher-developed questionnaire comprising 25 items rated on a five-point Likert scale. Descriptive statistics, Spearman’s rank-order correlation test, and multiple linear regression analysis were performed using SPSS software. The results showed that raw material cost-management challenges had the highest mean score of 4.10 out of 5, whereas raw material inventory and consumption management had the lowest mean score of 3.25. The most important challenges were severe fluctuations in raw material prices and supply chain disruptions. The hypothesis-testing results also indicated that cost-management practices (β = 0.34) and inventory management (β = 0.29) had positive and statistically significant effects on cost control, whereas cost-management challenges (β = −0.22) had a negative and statistically significant effect. The regression model explained 52.4% of the variance in the dependent variable. Iraqi industrial companies face serious challenges in managing raw material costs, primarily arising from external factors, including price fluctuations and supply chain disruptions, as well as internal weaknesses, such as inadequate information systems and traditional inventory-management practices. Strengthening cost-management practices and improving inventory management can contribute substantially to reducing costs and increasing the profitability of these companies.

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