The Influence of Management Accounting Departments within German Municipal Administrations
Financial Accountability & Management, Forthcoming
37 Pages Posted: 6 Jul 2012 Last revised: 27 Oct 2013
Date Written: March 25, 2013
The achievement of better performance from municipal administrations is an ongoing challenge. We use the contingency theory perspective, which concentrates on the specific environmental settings of organisations, to examine the influence of management accounting departments within German municipal administrations. Our findings indicate that as the size of municipalities increases, the level of their administrative performance decreases. We additionally show that this negative effect can be mitigated when management accounting is seen as being highly relevant and when the management accounting department performs well. Furthermore, a comparison of the accounting systems (cash versus accrual accounting) used in municipal administrations reveals that a successful working management accounting department can only exert a positive effect when the municipal administration acts under an accrual accounting regime.
Keywords: municipals, controlling departments, performance, accrual accounting, partial least square
JEL Classification: M4
Suggested Citation: Suggested Citation