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

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.