service industries are also dedicated to improving quality. Service firms present special problems because quality may differ form employee to employee. As a result, service firms are emphasizing consistency through the development of systems to support employee efforts. For example, Park Place Lexus of plano, TExas, is a 2005 malcolm Baldridge QUality Award winner. park Place Lexus measures client satisfaction with new vehicles (99.8percent), with pre-owned vehicles (98 percent), and with vehicle maintenance and service (near 98 percent), Park Place Lexus is also improving in profitability; its gross profit increased by 51.3 percent from 2000 to 2004. Clearly, quality initiatives are paying off.6
Quality cost measurement and reporting are key features of a management accounting system for manufacturing and service industries. in both cases, the system should be able to provide both operational and financial information about quality, including information such as the number of defects, quality cost reports, quality cost trend reports, and quality cost performance reports.