A cost accounting system is defined as a systematic framework used by a firm to estimate the cost of their products for measuring their profitability (Drury, 2015; Bragg, 2001; Obara and Ukpai, 2001; Romney and Steinbart, 2011; Martin, 2014). As indicated in the interviews, in this study, cost accounting systems (CAS) include the simple cost of goods sold and an inventory valuation, a breakeven analysis, a full and variable costing analysis, variance analysis (VA) and activity-based costing (ABC). Relevant literature (Evans and Bellamy, 1995; Lucey, 1996; Upchurch 2002; Anthony and Govindarajan, 2004; Lucey, 2008) emphasise that a CAS can serve as an invaluable database for understanding the full cost of resources used. Research (Hansen et al., 2009; Kwan, 2011) indicates that companies which efficiently use CAS outperform, in terms of their global competiveness, those which do not. This paper explores how cultures and local characteristics have influenced CAS. Specifically, it follows current discourses in the literature (Nagirikandalage and Binsardi, 2015; Nagendrakumar et al., 2015; Yapa and Ukwatte 2015; Adhikari et al., 2013; Adhikari and Mellemvik, 2010; Subasinghe and Fonseka, 2009) concerning accounting changes and reforms in Sri Lanka. However, regarding cultural changes, studies by Lyn and Yu (2002) indicate that resistance to organisational changes has not been an issue for successful CAS implementation. That said, most of the earlier studies have been carried out in the manufacturing industry within a developed country context (Ismail and King, 2005; Al-Eqab and Ismail, 2011) and therefore, the findings may not be applicable in a developing country context. For example, if a developing country such as Sri Lanka is to adopt a developed country’s systems, the implementation of CAS may not be, arguably, optimal because a developing country such as Sri Lanka has less developed infrastructure such as a lower accounting literacy rate, inadequate costing systems, traditional processing, less advanced technology, poor infrastructure, low adoption of IT, economic imperfections and other social, political and cultural differentials (Lyn and Yu, 2002; Carvalho et al., 2012).