In the last decades, public sector has been infl uenced by New Public Management emphasizingincentives, competition, and performance. With the effect of New Public Management,implementation of accrual accounting based rules in the local government level has been studiedfrom different aspects and within different contexts. In this study, we seek to further delineatefactors affecting the level of compliance to accrual based accounting rules in the local governmentlevel in an emerging country – Turkey. We shed lights on two new emerging country-like variables:implementation of European Union funded projects and newly founded municipalities with six controlvariables including municipal size, municipal wealth, citizen education level, staff education level,debt ratio and external audit. Data, to be analyzed, is gathered from 102 Turkish municipalities.We use compliance index, consisting of 39 items, in order to assess the level of compliance of themunicipalities. Institutional theory and resource dependence theory have been employed in orderto increase our understanding on the factors affecting the level of compliance to the accrual basedrules. The results show moderate compliance, 61.2%, with the accrual based rules. Predictorsthat have clearly signifi cant effect on the level of compliance are respectively, the external audit(b = .123, β = .450, p = .000), implementation of EU funded projects (b = .074, β = .267, p = .002)and being a newly founded municipality (b = .071, β = .155, p = .031). Moreover, we found thatcoercive institutional pressure to implement accrual-based rules may become a potent force whena supreme audit institution has control and there is resource dependence on an international body.
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