Assessing Accrual Accounting Reform in Greek Public Hospitals: An Empirical Investigation

Abstract

During the last decades, several countries worldwide have introduced financial management reforms, as an important part of the New Public Management (NPM) initiative at one or more levels of government sector, by either replacing or transforming their traditional budgetary cash accounting systems towards a businesslike accrual accounting concept. Following the example of this upcoming managerial trend, the Greek government introduced in 2003 the accrual basis accounting into public hospitals, as the hospital sector is one of the areas where NPM reforms have been introduced in search of higher efficiency, effectiveness and economy in service production. The purpose of this paper is twofold. The first goal is to provide an overview of the government sector reform initiatives in Greece and to present empirical evidence regarding the adoption level of the accrual basis accounting standards in the Greek public Health sector. The second goal of the research is to investigate the impact of a range of potentially contingent factors on hospitals compliance with the accrual financial and cost accounting reform. The present analysis is based on the results of an empirical survey that took place during 2009. For the purposes of this survey, a structured questionnaire was prepared and sent to the Chief Financial Officers (CFOs) of 132 Greek public hospitals. In particular, a linear regression model analysis was used to examine the cross-sectional differences on a number of explanatory and implementation factors of the accounting reform adoption level. The empirical evidence reveals that the level of accrual and especially cost accounting adoption in Greek public hospitals is realized only to a limited extent. In particular, results show that the level of reform adoption is positively related to IT quality, reform related training, education level of accounting staff, and professional consultants' support. However, no significant relationship was found between the level of reform adoption and hospital size,

Factors on the Accrual Accounting Adoption: Empirical Evidence from Indonesia

“…These results are not in line with public sector reform studies (Canby, 1995;Lawson, 2005;Udpa 1996;Ouda, 2008). However, the results found are consistent with Eriotis et al (2011) which showed a small rate of adoption in cost of accounting systems in hospitals. It is suggested that traditionally hospital had small incentive amount or demand for cost accounting systems as its management control rule.…”

Factors on the Accrual Accounting Adoption: Empirical Evidence from Indonesia

“…These results are not in line with public sector reform studies (Canby, 1995;Lawson, 2005;Udpa 1996;Ouda, 2008). However, the results found are consistent with Eriotis et al (2011) which showed a small rate of adoption in cost of accounting systems in hospitals. It is suggested that traditionally hospital had small incentive amount or demand for cost accounting systems as its management control rule.…”

Implementation of cost accounting as the economic pillar of management accounting systems in public hospitals – the case of Slovenia and Croatia

“…Consequently, Slovenian public hospitals have a better predisposition to provide more relevant and reliable information about full costs of the programmes, which is needed for making economic decisions at micro and macro level. Eriotis, Stamatiadis, and Vasiliou (2011) and Cohen, Kaimenaki, and Zorgios (2007) have revealed similar results for Greece hospitals and municipalities.…”

Antecedents and Consequences of Successful Implementation of Accrual Based Government Accounting System in Central Government

“…Commitment of agency leaders has a positive and significant influence on the successful implementation of accrual-based local government financial statements. The results of Eriotis et al (2011) showed a positive and significant relationship between IT Quality and successful adoption of Accrual Accounting reforms. Based on the research results conducted by Lashgari, Zahra et al (2015), Accrual quality can be attributed to internal control weaknesses that can affect financial operations and financial reporting.…”

Factors on the Accrual Accounting Adoption: Empirical Evidence from Indonesia

“…These results are not in line with public sector reform studies (Canby, 1995;Lawson, 2005;Udpa 1996;Ouda, 2008). However, the results found are consistent with Eriotis et al (2011) which showed a small rate of adoption in cost of accounting systems in hospitals. It is suggested that traditionally hospital had small incentive amount or demand for cost accounting systems as its management control rule.…”

Implementation of cost accounting as the economic pillar of management accounting systems in public hospitals – the case of Slovenia and Croatia

“…Consequently, Slovenian public hospitals have a better predisposition to provide more relevant and reliable information about full costs of the programmes, which is needed for making economic decisions at micro and macro level. Eriotis, Stamatiadis, and Vasiliou (2011) and Cohen, Kaimenaki, and Zorgios (2007) have revealed similar results for Greece hospitals and municipalities.…”

Antecedents and Consequences of Successful Implementation of Accrual Based Government Accounting System in Central Government

“…Commitment of agency leaders has a positive and significant influence on the successful implementation of accrual-based local government financial statements. The results of Eriotis et al (2011) showed a positive and significant relationship between IT Quality and successful adoption of Accrual Accounting reforms. Based on the research results conducted by Lashgari, Zahra et al (2015), Accrual quality can be attributed to internal control weaknesses that can affect financial operations and financial reporting.…”

Factors on the Accrual Accounting Adoption: Empirical Evidence from Indonesia

“…These results are not in line with public sector reform studies (Canby, 1995;Lawson, 2005;Udpa 1996;Ouda, 2008). However, the results found are consistent with Eriotis et al (2011) which showed a small rate of adoption in cost of accounting systems in hospitals. It is suggested that traditionally hospital had small incentive amount or demand for cost accounting systems as its management control rule.…”

Implementation of cost accounting as the economic pillar of management accounting systems in public hospitals – the case of Slovenia and Croatia

“…Consequently, Slovenian public hospitals have a better predisposition to provide more relevant and reliable information about full costs of the programmes, which is needed for making economic decisions at micro and macro level. Eriotis, Stamatiadis, and Vasiliou (2011) and Cohen, Kaimenaki, and Zorgios (2007) have revealed similar results for Greece hospitals and municipalities.…”

Antecedents and Consequences of Successful Implementation of Accrual Based Government Accounting System in Central Government

“…Commitment of agency leaders has a positive and significant influence on the successful implementation of accrual-based local government financial statements. The results of Eriotis et al (2011) showed a positive and significant relationship between IT Quality and successful adoption of Accrual Accounting reforms. Based on the research results conducted by Lashgari, Zahra et al (2015), Accrual quality can be attributed to internal control weaknesses that can affect financial operations and financial reporting.…”