Investigating the Relationship between Accrual Accounting and Performance-Based Budgeting (A Case Study: Iran Ministry of Health and Medical Education)

Document Type : Original Article

Authors

1 M. A. in Accounting, Islamic Azad University, Sanandaj Branch

2 Assistant Professor, Department of Accounting, Kurdestan University

3 Assistant Professor, Department of Accounting, Islamic Azad University, Sanandaj Branch

Abstract

Introduction: In governmental organizations, budgeting has an important role in optimal use of financial resources. Performance-Based Budgeting is a proper means for evaluating the performance of each organization, and implementing accrual accounting system has an undeniable role in formulating the type of budgeting.
Method: This study is an applied research in terms of purpose, and it has a descriptive correlation method in collecting data. The population of the research include all financial managers and accounting experts of Iranian medical universities. A sample which contains of 225 people has been selected and analyzed through systematic stratified sampling. The means of collecting data includes two researcher-made questionnaires, one for accrual accounting and the other for Performance-Based Budgeting which its validity, from the viewpoint of experts, and its reliability, by Cronbach' Alpha, were examined and confirmed. In order to analyze the data, by applying SPSS Software Version 20, exploratory factor analysis, Pearson correlation test, and regression model were used.
Results: There is a significance and positive relationship between accrual accounting and different aspects of Performance-Based Budgeting (planning, costs analysis, performance management, change management, accountability, and motivation).  
Conclusion: Providing the necessary infrastructure to implement Performance-Based Budgeting properly and efficiently is considered as one of the main priorities of each organization. Accrual accounting is one of the constituent elements of this infrastructure. In case of implementing accrual accounting system, more accurate and complete information of revenues and expenses for each period will be achieved, and the possibility for formulating Performance-Based Budgeting in a systematic and correct way will be provided.

Keywords

References

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Journal of Health Accounting
Volume 3, Issue 4 - Serial Number 10
December 2015
Pages 59-79

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