Cross-National Differences in Cost Accounting of MNEs: Empirical Evidence from Anglophone Subsidiaries in Germany

Kajüter P, Schröder M

Abstract
Anecdotal evidence shows that multinational enterprises (MNEs) encounter difficulty in imposing theircost-accounting standards internationally because foreign subsidiaries prefer to follow their local cost-accountingtraditions. Although prior research has revealed cross-national differences in management accounting, particularly between anglophone and German-speaking countries, the determinants and consequences for cost-accounting systems in foreign subsidiaries of MNEs are largely unexplored. This study therefore investigates the design of cost-accounting systems in German subsidiaries of anglophone MNEs. The empirical results reveal that anglophone cost-accounting traditions prevail in two-thirds of anglophone subsidiaries. Based on new institutional sociology, this studyexplores the determinants and identifies strong coercive pressures by anglophone parent companies, suggesting that anglophone MNEs standardize their cost-accounting systems globally using their home country cost-accounting traditions. The results also show that both management accountants and managers in German subsidiaries of anglophone MNEs assess their cost-accounting system as worse when it is shaped by anglophone traditions. Managerial implications are discussed.

Keywords
cost accounting; comparative management accounting; subsidiaries; anglophone MNEs; dyadic survey research; new institutional sociology