Separation – integration – and now …? A historical perspective on the relationship between German management accounting and financial accounting

Brandau, Michael; Endenich, Christoph; Luther, Robert; Trapp, Rouven

Abstract

© 2016, © The Author(s) 2016. German accounting has traditionally followed a dual ledger approach with strictly separated internal cost accounting, as the basis for management information, and external financial accounting focusing on creditor protection and based on the commercial law. However, the increased adoption of integrated accounting systems implies a significant change in the relationship between financial and management accounting systems. We use Hegelian dialectic to trace the historical development of German accounting from separated systems and antithetical propositions of full integration, to the emergence of partial integration as the synthesis of this transformation process. The foundation of our paper is a comprehensive analysis of the literature on the relationship between financial and management accounting in Germany. On this basis, we elaborate how financial accounting in Germany has been shaped by its economic context and legislation, and how financial accounting – accompanied by institutional pressures – in turn influenced management accounting. We argue that the changing relationship between management and financial accounting in the German context illustrates how current accounting practice is shaped not only by its environment, but also by its historical path. Based on this reasoning, we discuss several avenues for future research.

• Journal Article Type: Article
• Acceptance Date: Feb 25, 2016
• Online Publication Date: Oct 13, 2016
• Publication Date: Feb 1, 2017
• Deposit Date: Feb 25, 2016
• Publicly Available Date: Apr 25, 2017
• Journal: Accounting History
• Print ISSN: 1032-3732
• Electronic ISSN: 1749-3374
• Publisher: SAGE Publications
• Peer Reviewed: Peer Reviewed
• Volume: 22
• Issue: 1
• Pages: 67-91
• DOI: https://doi.org/10.1177/1032373216658035
• Keywords: financial accounting, management accounting, Hegelian dialectic, Germany, historical analysis, integration, globalization, IFRS
• Public URL: https://uwe-repository.worktribe.com/output/899032
• Publisher URL: http://dx.doi.org/10.1177/1032373216658035
• Contract Date: Feb 25, 2016