The purpose of this research is to explore-the problems created for the auditor, as a consequence of the introduction of advanced technology (high-tech) into the manufacturing industries in the United States (U.S.). The introduction of high-tech into the manufacturing process creates changes which render many traditional cost accounting procedures ineffective, irrelevant, or both. As a consequence, the necessary changes in cost accounting, procedures create problems in auditing the cost accounting process.
The introduction of high-tech into the manufacturing. process has, in most instances, been accompanied by a significant shift in emphasis in manufacturing management. In the recent past, the emphasis in manufacturing management was on materials inventories, ordering, and production lead times, labor and material efficiency, work-in-progress (WIP) levels, finished goods inventories, and so forth. The emerging emphasis in American manufacturing is on just-in-time (JIT) techniques. JIT production techniques emphasize the elimination of waste, which is defined as "any activity performed within a manufacturing company which does not add value to the product" (Maskell, l986b, p. 32). Within the parameters of this definition of waste are inventories, materials handling, quality problems, queues, shop floor delays, lead times, and unnecessary clerical and accounting procedures (Maskell, 1986a). The elimination or minimization of inventories, lead times, and so forth creates a need for radical changes in traditional cost accounting procedures, which, in turn, demands new approaches for the auditing of the cost accounting process.
The introduction of high-tech into the manufacturing process, and the adoption of the JIT approach to manufacturing management each demand radical changes in cost accounting procedures and techniques for manufacturing firms. The combined introduction of high-tech and implementation of JIT accelerates...