The Influence of Organizational Structure, Environment, and Resource Provision on the Use of Accrual Accounting in Municipalities: An Institutional View

37 Pages Posted: 24 May 2018

See all articles by Christian Nitzl

Christian Nitzl

University of the German Federal Armed Forces - Universität der Bundeswehr München

Dennis Hilgers

JKU Linz | Institute for Public and Nonprofit Management; RWTH Aachen University - Technology and Innovation Management Group

Bernhard Hirsch

Bundeswehr University Munich

Date Written: May 12, 2018

Abstract

Despite its benefits, municipalities frequently struggle to take advantage of accrual accounting as a basis for managerial decisions. We assume that the reason is that municipalities implement accrual accounting in a symbolic way for legitimacy purposes. To identify factors enhancing a more sophisticated usage of accrual accounting, we examined the influence of the specific municipality context, the organizational structure and resource provision on the degree of sophistication in the use of accrual accounting. We found that the most relevant driver for a more sophisticated use of accrual accounting is the specific context in which the municipality is embedded. Another important factor is the adequate provision of resources, such as an IT system that delivers easily accessible and accurate accounting information. Notably, the specific organizational structure of the municipality, which is often regarded as highly bureaucratic and the main obstruction to reforms, is not significant.

Keywords: Accrual Accounting, Implementation, Municipalities

Suggested Citation

Nitzl, Christian and Hilgers, Dennis and Hirsch, Bernhard, The Influence of Organizational Structure, Environment, and Resource Provision on the Use of Accrual Accounting in Municipalities: An Institutional View (May 12, 2018). Available at SSRN: https://ssrn.com/abstract=3177409 or http://dx.doi.org/10.2139/ssrn.3177409

Christian Nitzl (Contact Author)

University of the German Federal Armed Forces - Universität der Bundeswehr München ( email )

Werner-Heisenberg-Weg 39
Neubiberg
Munich, 85579
Germany

Dennis Hilgers

JKU Linz | Institute for Public and Nonprofit Management ( email )

Altenbergerstrasse 69
Linz, A4040
Austria

HOME PAGE: http://www.pnp.jku.at

RWTH Aachen University - Technology and Innovation Management Group ( email )

Kackertstr. 15
Aachen, 52072
Germany

Bernhard Hirsch

Bundeswehr University Munich ( email )

Werner-Heisenberg-Weg 39
Neubiberg, 85577
Germany

HOME PAGE: http://www.unibw.de

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