An Exploratory Study of Governmental Management Accounting in China

Governmental management accounting (GMA) is a less studied area in the literature because of its complexity and close dependence on national legislations and policies. This is particularly true for developing countries such as China. This paper studies the current GMA practices in China at the local municipality level. It first introduces the concept, roles and functions of GMA. Then through a survey it presents and discusses the current situation, various problems and limitations in the implementation of GMA in China. It is found that insufficient recognition of the GMA value by the government, inappropriate internal economic environment, a mismatch between financial and management accounting systems, inadequate knowledge and skills of GMA, and dependence on national legislations and policies are the main obstacles in the implementation of GMA in China. At the end of the paper conclusions are made and suggestions for further development of GMA are also listed.