Risk management and management accounting control systems in public sector organizations: a systematic literature review

IMPACT

Risk management (RM) supported by an integrated management accounting and control system in public sector organizations can help all levels of governments to meet the growing demands of public service governance, performance management and accountability. This article explains how RM can provide public service managers and policy-makers with practical tools to help them make risk-informed strategic and operational decisions.

ABSTRACT

While it is becoming pervasive and unavoidable in every organization, risk management (RM) interacts with control systems in public sector organizations (PSOs). This article presents a literature review showing that PSOs design and implement risk-based control systems arbitrarily. This leads to the issue of appropriate integration of RM in management accounting and control systems (MACS). Despite the importance of integrated RM, the existing literature shows that issues of RM are not well integrated at the MACS level, and that a radical cultural shift is still required in PSOs. Future RM studies must provide empirical data about integration in practice.

KEYWORDS:

• Literature review
• management accounting
• management control systems
• performance management
• public sector organizations
• risk management

Disclosure statement

No potential conflict of interest was reported by the author(s).