The Effect of Implementing Quality Costing on Financial Performance: Case Study of Hormozgan Gas Company

Document Type : Research Paper

Authors

1 Department of Accounting, Management & Economics Faculty, Shahid Bahonar University of Kerman Kerman, Iran.

2 Department of Accounting, Faculty of Management, Economics and Accounting, University of Hormozgan, Bandar Abbas, Iran.

3 Department of Accounting, BA. C., Islamic Azad University, Bandar Abbas, Iran.

10.22103/jak.2025.22798.4006

Abstract

Objective: In today’s highly competitive and globalized business environment, quality costing systems are recognized as essential cost management tools that enhance an organization’s competitive advantage. This study aims to examine the impact of implementing a quality costing system on the financial performance of the Hormozgan Province Gas Company.
 
Method: This research adopts a positivist paradigm and employs both archival and survey-based strategies. This study is a time-series research, and the data were collected through interviews as well as from the financial statements of the Hormozgan Province Gas Company for the period 2016–2021. The statistical population of the study consisted of all managers and employees of the Hormozgan Province Gas Company, from among whom a random sample was selected and interviewed for the purpose of classifying quality costs.
 
Results: The findings indicate that the implementation of a quality costing system has had a positive effect on the company’s financial performance, leading to a reduction in compliance-related costs. Moreover, a negative correlation was observed between prevention costs and evaluation costs, suggesting that increased investment in preventive measures can reduce the need for extensive evaluation activities.
 
Conclusion: One of the reasons for the low proportion of appraisal costs relative to prevention costs and the absence of significant failure costs in this company can be attributed to its investment in prevention activities and the high growth rate of these costs over the sample years of the study.

Keywords

Main Subjects

References

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History

  • Receive Date: 09 January 2024
  • Revise Date: 18 December 2024
  • Accept Date: 12 April 2025

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