A Review of Literature on Contingency Theory in Managerial Accounting

This paper reviewed the literature on the contingency theory in management accounting research in a chronological order. Based on this literature review, contingency theory was summarized as an approach to the study of organizational behavior in which explanations are given as to how contingent factors influence the design and function of organizations. Commonly, contingency theory studies postulate that organizational outcomes are the consequences of a fit or match between two or more contingent factors. This paper makes a contribution towards reviewing the contingent literature in relation to management accounting and management accounting systems. It found that the main problem in contingency based modeling in management accounting is the operation of fit. This study suggested that researchers should discuss explicitly how and whether the particular form of fit can be relevant to studies that have adopted other forms.