Proposed Accounting Approach for Integration between Flexible Accounting System and Six Sigma System for Improving Performance in the Drinking Water Sector-Exploratory study

El Abdy, Mohamed Abd El Rahman; Farhat, Medht Mohamed Ali; Ghareb, Mohamed Ali Abd El Aziz

doi:10.21608/aljalexu.2017.61216

Proposed Accounting Approach for Integration between Flexible Accounting System and Six Sigma System for Improving Performance in the Drinking Water Sector-Exploratory study

Document Type : Original Article

Authors

¹ Accounting Department Faculty of Commerce port said University port said Egypt

² Accounting Department Faculty of Commerce Port Said University Port Said Egypt

³ Department of Accounting Institute of Statistics Cairo University Cairo Egypt

10.21608/aljalexu.2017.61216

Abstract

The issue of rationalization of drinking water, both in developed and developing countries, has received great and increasing attention to reduce wasted water, starting from production plants and storage tanks and through transport and distribution pipelines in the networks and through meters, in addition to water that seeps into the connections of homes and water storage areas. This requires ensuring that non-contaminated water is provided, and that pollution is reduced or eliminated through treatment at several stages. In support of economic and social development in Egypt.
Consideration should be given to cost recovery in order to cover revenue for both operating and maintenance costs and depreciation of fixed assets as well as interest on loans, especially since cost recovery is important for the operation of new water facilities and for increasing performance efficiency (Jaber, 2006, p. 322). Regarding the cost recovery in Egypt, we find that the coverage ratio for operating and maintenance costs without depreciation from total revenues amounted to 123% for the year 2010/2011, while the coverage of operating costs, maintenance and depreciation from total revenues amounted to 108% for the same year and the coverage rate of total costs from total revenues reached 84% for the same period. Therefore, the ratio of total cost coverage of total revenues is not sufficient to achieve cost recovery and hence the performance efficiency decreases and production is delayed due to unavailability of capital investments.

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