THE RELATIONSHIP BETWEEN INFORMALITY AND THE FORMAL MANAGEMENT ACCOUNTING AND CONTROL PROCESS: A CASE STUDY FROM EGYPT

This work sets out to integrate informal institutions' role into the formal management accounting and control (MAC) process by bringing qualitative evidence from a developing African setting. Using institutional analysis, we sought to identify how informal institutions relate to and affect corporate accounting and controls. A case study approach is used, focusing on the field of oil production in Egypt. Data are collected through a triangulation of interviews, observations, and documents. Despite the present conflicting goals between formal and informal institutions and the limited role played by formal institutions in the process of MAC in the Egyptian context, formal and informal institutions are observed to be accommodating (rather than substituting or competing with) each other. This relationship has eventually played a supportive role in the process of MAC in this emerging market. This work contributes to the literature by highlighting the interplay between formal and informal institutions in an emerging African context and providing theoretical and empirical evidence on the interaction between formal and informal institutions in accounting and control.