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

  • Eriotis, Nikolaos
  • Stamatiadis, Filippos
  • Vasiliou, Dimitrios
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    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 business-like 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, reform implementation cost, CEO educational background, experience effect, and absence of management-physicians conflict relationship. The main contribution of this study is the empirical evidence it provides on the approaches and processes used by the Government of Greece to implement accrual financial and cost accounting systems in the Greek National Health System (GNHS) and the role certain human, organizational and situational factors played in such implementations for enhancing researchers’ and managers’ understanding of major implementation processes and challenges as well as helping them refine models of effective implementation process and improve systems and processes on similar future projects

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    File URL: http://mpra.ub.uni-muenchen.de/30246/2/MPRA_paper_30246.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 30246.

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    Date of creation: 30 Mar 2011
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    Publication status: Published in International Journal of Economic Sciences and Applied Research 1.4(2011): pp. 153-184
    Handle: RePEc:pra:mprapa:30246
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    1. Abernethy, Margaret A. & Vagnoni, Emidia, 2004. "Power, organization design and managerial behaviour," Accounting, Organizations and Society, Elsevier, vol. 29(3-4), pages 207-225.
    2. Eddy Cardinaels & Filip Roodhooft & Gustaaf Van Herck, 2004. "Drivers of cost system development in hospitals: results of a survey," Vlerick Leuven Gent Management School Working Paper Series 2004-09, Vlerick Leuven Gent Management School.
    3. Johan Christiaens, 1999. "Financial accounting reform in Flemish municipalities: an empirical study of implementation and annual financial reports," European Accounting Review, Taylor & Francis Journals, vol. 8(4), pages 803-804.
    4. J. Christiaens & V. Van Peteghem, 2004. "Governmental Accounting Reform: Evolution Of The Implementation In Flemish Municipalities," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/256, Ghent University, Faculty of Economics and Business Administration.
    5. Charalampos Economou & Claude Giorno, 2009. "Improving the Performance of the Public Health Care System in Greece," OECD Economics Department Working Papers 722, OECD Publishing.
    6. Ron Hodges & Howard Mellett, 2003. "Reporting public sector financial results," Public Management Review, Taylor & Francis Journals, vol. 5(1), pages 99-113, March.
    7. Noel Hepworth, 2003. "Preconditions for Successful Implementation of Accrual Accounting in Central Government," Public Money & Management, Chartered Institute of Public Finance and Accountancy, vol. 23(1), pages 37-44, 01.
    8. Giroux, Gary, 1989. "Political interests and governmental accounting disclosure," Journal of Accounting and Public Policy, Elsevier, vol. 8(3), pages 199-217.
    9. David Emsley & Barbara Nevicky & Graeme Harrison, 2006. "Effect of cognitive style and professional development on the initiation of radical and non-radical management accounting innovations," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 46(2), pages 243-264.
    10. Coombs, R. W., 1987. "Accounting for the control of doctors: Management information systems in hospitals," Accounting, Organizations and Society, Elsevier, vol. 12(4), pages 389-404, June.
    11. Tyrone Carlin & James Guthrie, 2003. "Accrual output based budgeting systems in Australia The rhetoric-reality gap," Public Management Review, Taylor & Francis Journals, vol. 5(2), pages 145-162, June.
    12. Evans, John III & Patton, James M., 1983. "An economic analysis of participation in the municipal finance officers association certificate of conformance program," Journal of Accounting and Economics, Elsevier, vol. 5(1), pages 151-175, April.
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