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Research Article

EEO. 2021; 20(6): 1729-1743

The effect of Open Book Accounting on Reducing Production Cost and Enhancing Competitive Advantage (Field study in industrial companies in Khartoum, Sudan)

Saadaby Mohammed Ali Dafaalla Abdalla, Khalid Yousif Ibrahim Salih, Waheeb Hassan Yassin Gadour, Abubkr Ahmed Elhadi Abdelraheem, Asaad Mubarak Hussien, Yosra Azhari Elamin Elbokhar.


The policy of open book accounting has become of clear importance and effective
role in reducing production costs and raising companies to the competitive level. This
study aimed to investigate the impact of disclosure of cost data in reducing the cost of
production and increasing the competitive advantage. The primary data was collected
through a five-point Likert scale questionnaire that was distributed to a study sample of
200 employees from several companies in Sudan to explore the respondents’ views. 170
questionnaires were retrieved, with a response rate of 85%. To analyze the data, the
descriptive statistics -mean and standard deviation- were used to measure the
respondents’ degree of agreement. The simple linear regression analysis was adopted to
test the hypothesis of the study. the study concluded that the open book accounting assists
in reducing the cost by disclosing cost structure and driver for each product and developing product manufacturing process, also, motivating supplier to disclose cost data through joint policies between buyer and supplier leads to support the competitive
advantage. The study recommended building up joint team which includes members from
buyer and supplier to manage costs and develop products according to the information that
provided by open book accounting technique.

Key words: open book accounting, goods or services

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