DECODING LEAN ACCOUNTING: UNVEILING THE REALITIES BEYOND TOYOTA'S RECALLS

Abstract

The adoption of lean manufacturing and lean accounting has sparked debates within the accounting profession, specifically among managerial accounting practitioners. This paper delves into the effectiveness of lean accounting in supporting strategic decision-making from a managerial accounting perspective. With recent recalls by Toyota casting doubt on lean manufacturing and lean accounting—concepts it introduced and popularized—contention has intensified. Critics argue that traditional accounting methods like standard costing and activity-based costing outperform lean accounting in certain scenarios. Moreover, they point to Toyota's recalls as evidence of the potential adverse outcomes associated with lean accounting. In contrast, proponents of lean accounting contend that the recalls were a result of engineering issues, not flaws in lean manufacturing.

This study undertakes a case study of Toyota to explore potential issues with lean accounting. Despite Toyota being a prime example of the precision and benefits of lean accounting, using it as a case study sheds light on the potential pitfalls of this accounting approach. By examining Toyota's experiences, the study aims to provide a nuanced understanding of the controversies surrounding lean accounting.

The paper is structured into four main sections. Section 2 conducts a comprehensive review of the existing literature on lean accounting, offering insights into the ongoing discourse. Section 3 outlines the research methods employed and presents the findings derived from the case study of Toyota. Sections 4 and 5 critically analyze the implications of the findings and draw conclusions, respectively, contributing to the ongoing dialogue on lean accounting.