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Cash versus accrual accounting measures in Greek municipalities: proxies or not for decision-making?

Cash versus accrual accounting measures in Greek municipalities: proxies or not for decision-making? Cash figures still constitute the main basis for performance assessment and resource allocation decisions in the Greek public sector even though accrual accounting information is available. The scope of this paper is to compare accrual accounting and cash accounting figures in order to assess whether such a policy could be justified on the grounds of cash eventually reflecting a fair proxy of accrual measures. Our analysis is based on 370 municipality observations over the period 2002 to 2004. The empirical findings of our study show that approximately 70% of the accrual revenues (expenses) figures can be explained on the basis of cash based revenues (expenses) as well as specific municipality socio-economic factors. Our findings shed light on the long-lasting Greek public administration shortcomings that may have contributed to the public sector financial crisis that Greece is experiencing since the end of 2009. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Accounting, Auditing and Performance Evaluation Inderscience Publishers

Cash versus accrual accounting measures in Greek municipalities: proxies or not for decision-making?

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1740-8008
eISSN
1740-8016
DOI
10.1504/IJAAPE.2012.047807
Publisher site
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Abstract

Cash figures still constitute the main basis for performance assessment and resource allocation decisions in the Greek public sector even though accrual accounting information is available. The scope of this paper is to compare accrual accounting and cash accounting figures in order to assess whether such a policy could be justified on the grounds of cash eventually reflecting a fair proxy of accrual measures. Our analysis is based on 370 municipality observations over the period 2002 to 2004. The empirical findings of our study show that approximately 70% of the accrual revenues (expenses) figures can be explained on the basis of cash based revenues (expenses) as well as specific municipality socio-economic factors. Our findings shed light on the long-lasting Greek public administration shortcomings that may have contributed to the public sector financial crisis that Greece is experiencing since the end of 2009.

Journal

International Journal of Accounting, Auditing and Performance Evaluation – Inderscience Publishers

Published: Jan 1, 2012

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