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Reaping the benefits of two worlds: An explanatory study of the cash and the accrual accounting information roles in local governments

Sandra Cohen (Department of Business Administration, Athens University of Economics and Business, Athens, Greece)
Nikolaos Kaimenakis (Department of Accounting and Finance, Athens University of Economics and Business, Athens, Greece)
George Venieris (Department of Accounting and Finance, Athens University of Economics and Business, Athens, Greece)

Journal of Applied Accounting Research

ISSN: 0967-5426

Article publication date: 9 September 2013

Abstract

Purpose

The purpose of this paper is to explore the coexistence of cash accounting and accrual accounting systems through an investigation of the roles they fulfill in Greek municipalities.

Design/methodology/approach

The survey results are based on the answers of the financial department principals of 106 municipalities to a structured questionnaire. The roles of accounting investigated are informed by Ansari and Euske's model.

Findings

It appears that cash accounting information prevails in the major function of decision making, with accrual accounting information playing a secondary role. Larger municipalities seem to use accounting data more extensively than smaller ones for negotiations, both in accrual and cash terms.

Originality/value

The study sheds light on the actual use of accrual accounting information in a public sector setting, where customarily decisions were based on cash accounting considerations.

Keywords

Acknowledgements

JEL Classification: M41

The authors would like to thank the participants of the 5th International Conference on Accounting, Auditing & Management in Public Sector Reforms in Amsterdam, the participants of the EGPA Conference in Malta and the participants of the 8th HFAA Conference in Thessaloniki for comments on earlier versions of the paper.

Citation

Cohen, S., Kaimenakis, N. and Venieris, G. (2013), "Reaping the benefits of two worlds: An explanatory study of the cash and the accrual accounting information roles in local governments", Journal of Applied Accounting Research, Vol. 14 No. 2, pp. 165-179. https://doi.org/10.1108/09675421311291900

Publisher

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Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited