The Importance of the Application of Controlling in the Management of Public Enterprises whose Founders are Local Self-government Units: The Example of Republic of Serbia


  • Jelena Vitomir Megatrend University in Belgrade
  • Sonja Tomas-Miskin Belgrade Banking Academy
  • Slobodan Popović Faculty of Economics and Industrial Management u Novom Sadu



controlling, internal control, management accounting, companies, local self-government units


The importance of the application of controlling in public enterprises is highlighted in the study. The aim of the research was aimed at establishing evidence that improvement of management can be achieved through the application of controlling 141 public companies were analyzed in terms of the use of controlling and internal control, that is, about 20% of the mentioned companies whose founders are local self-government units. We found that there are significant differences in terms of established control and it is increasingly in favor of the application of controlling in relation to internal control based on the analyzed five factors: planning, decision-making, business analysis, presentation and reporting. The main conclusion would be that the operations of public companies in the coming period will require an increasing application of controlling in the management system. This was determined by applying the so-called T-test, and the total score, and it refers to all analyzed factors (p=.000) in relation to established controlling and internal control in public companies.


Alibegović, D., Hodžić, S. & Bečić, E. (2018) Limited Fiscal Autonomy of Croatian Large Cities, Lex Localis – Journal of Local Self-Government, 16(1), pp. 107-128,

Alzeban, A. (2019) The relationship between internal control and internal audit recommendations, Spanish Journal of Finance and Accounting [Revista Española de Financiación y Contabilidad], 48(3), pp. 341-362,

Bieńkowska, A., Tworek, K. & Zabłocka-Kluczka, A. (2020) IT Reliability and Its Influence on the Results of Controlling: Comparative Analysis of Organizations Functioning in Poland and Switzerland, Information Systems Management, 37(1), pp. 33-51,

Biščak, M. & Benčina, J. (2019) The impact of HRM practices on the performance of municipalities the case of Slovenia, Transylvanian Review of Administrative Sciences, 58 E/2019, pp. 5-23.

Blom, R., Kruyen, P., Thiel, S. & Heijden, B. (2021) ‘Through the looking-glass’: addressing methodological issues in analyzing within- and between-sector differences in employee attitudes and behaviors, International Public Management Journal, 24(6), pp. 813-830,

Bourne, M. (2011) Controlling the Shadow Trade, Contemporary Security Policy, 32(1), pp. 215-240,

Bowden., A. & Liddle, J. (2018) Evolving public sector roles in the leadership of place-based partnerships: from controlling to influencing policy?, Regional Studies, 52(1), pp. 145-155,

Bracci, E., Mouhcine, T., Rana, T. & Wickramasinghe, D. (2022) Risk management and management accounting control systems in public sector organizations: a systematic literature review, Public Money & Management, 42(6), pp. 395-402,

Cao., Z, Chen., S, Jiang., M. & Xiang., M. (2022) Internal control weakness and corporate employment decisions: evidence from SOX Section 404 disclosures, Accounting Forum,

Chan., K, Chen., Y. & Liu., B. (2021) The Linear and Non-Linear Effects of Internal Control and Its Five Components on Corporate Innovation: Evidence from Chinese Firms Using the COSO Framework, European Accounting Review, 30(4), pp. 733-765,

Chang., H, Hu., W, Liu., H. & Sue., H. (2020) Does women on board affect the socially responsible firms’ effectiveness of internal control?, Applied Economics, 52(56), pp. 6162-6170,

Chen, R. (2019) Internal Control Audit Fee and Internal Control Audit Quality—Evidence from Integrated Audits, Open Journal of Business and Management, 7, pp. 292-311.

Cuadrado-Ballesteros, B. & Bisogno, M. (2021) Public sector accounting reforms and the quality of governance, Public Money & Management, 41(2), pp. 107-117,

Decision on the organization of city administrations of the city of Novi Sad, Official Gazette of the City of Novi Sad, no. 43/2008, Assembly of the City of Novi Sad, available at: (February 7, 2023).

Gong, Y., Xia, Y., Xia, X. & Wang, Y. (2021) Management Earnings Forecasts Bias, Internal Control, and Stock Price Crash Risk: New Evidence from China, Emerging Markets Finance and Trade,

Gorina, E. & Agadjanian, V. (2019) Belonging and Political Participation: Evidence from the 2011 President Election in Kyrgyzstan, Europe-Asia Studies, 71(9), pp. 1562-1583,

Han, H., Ko, K. & Cho, S. (2019) Does the longer tenure of local government heads affect the performance of local governments? The Korean case, Asian Journal of Political Science, 27(1), pp. 127-144,

Han, X., Xu, H., Zhang, C., Shen, Y. & Lu, X. (2022) Will the Narrowing Pay Gap in Chinese State-owned Enterprises Improve Internal Control Quality?, Emerging Markets Finance and Trade, 58(12), pp. 3340-3354,

Huang, D., Lu, D., Quan, X. & Xing, C. (2022) Non-Controlling Shareholders and Innovation: Evidence from Chinese State-Owned Enterprises, Emerging Markets Finance and Trade, 59(1), pp. 39-59,

Hui, Z. & Fang, H. (2022) Government controlling ownership and CEO compensation incentives: evidence from China, Applied Economics, 55(31), pp. 3561-3579,

Feng, X., Wen, W., Ke, Y. & He, Y. (2021) Stock pledges by controlling shareholders and the disclosure of critical audit matters: evidence from China, Asia-Pacific Journal of Accounting & Economics, 30(3), pp. 726-744,

Finžgar, M. & Brezovnik, B. (2019) Direct international comparison of EU member states fiscal decentralization systems with the conceptual index of fiscal decentralization (CIFD) in the context of European charter of local self-government (ECLSG), Transylvanian Review of Administrative Sciences, 56E/2019, pp. 41-59,

Fred, M. (2020) Local government projectification in practice – a multiple institutional logic perspective, Local Government Studies, 46(3), pp. 351-370,

Lartey, P., Kong, Y., Bah, F., Santosh, R. & Gumah, I. (2020) Determinants of Internal Control Compliance in Public Organizations; Using Preventive, Detective, Corrective and Directive Controls, International Journal of Public Administration, 43(8), pp. 711-723,

Law on local self-government, Official Gazette of RS, no. 129/2007, 83/2014 - other law, 101/2016 - other law, 47/2018 and 111/2021 - other law, available at: (February 7, 2023).

Lenggenhager, L. (2021) Response to the reviews of Ruling Nature, Controlling People, Journal of Southern African Studies, 47(4), pp. 732-734,

Kim, S. & Lee, S. (2021) Perceptions of social performance in public enterprises and early job seekers’ intentions to apply, International Review of Public Administration, 26(1), pp. 41-56,

Lin, Z., Song, B. & Tian, Z. (2022) Reputable Inside Directors and Internal Control Effectiveness, European Accounting Review,

Kunesch, H.(1996) Planning and control systems in materials management-an empirical study, Production Planning & Control, 7(2), pp. 205-211,

Kwon, Y. & Han, S. (2020) Controlling Shareholders’ Preference in Business Groups: Evidence from Korea, Emerging Markets Finance and Trade, 56(4), pp. 940-959,

Matosic, D., Ntoumanis, N., Boardley, I. & Sedikides, C. (2020) Narcissism, beliefs about controlling interpersonal style, and moral disengagement in sport coaches, International Journal of Sport and Exercise Psychology, 18(5), pp. 592-606,

Majstorović, A., Popović, S. & Volf, D. (2015) Teorija i politika bilansa, drugo izmenjeno i dopunjeno izdanje (Novi Sad: Feljton).

Mijić, R. & Popović, S. (2016) Finansijsko Računovodstvo (Banja Luka: City print).

Nevalainen, P. & Yliaska, V. (2021) From state-owned smokestacks to post-industrial dreams: The Finnish government in business, 1970–2010, Business History, 63(8), pp. 1327-1356,

Nikolić, G. (2020) Does it make sense to deepen the economic cooperation of the western balkan economies?, Economic Research-Ekonomska Istraživanja, 33(1), pp. 3453-3475,

Olusanmi, A. O., Emeni, K. F., Uwuigbe, U., Oyedayo, S. O. (authors) & Amoo, O. E. (reviewing ed.) (2021) A bibliometric study on water management accounting research from 2000 to 2018 in Scopus database, Cogent Social Sciences, 7(1),

Oyewo, B., Vinh, V. X. & Akinsanmi, T. (2021) Strategy-related factors moderating the fit between management accounting practice sophistication and organisational effectiveness: the Global Management Accounting Principles (GMAP) perspective, Spanish Journal of Finance and Accounting [Revista Española de Financiación y Contabilidad], 50(2), pp. 187-223,

Öberg, S. & Wockelberg, H. (2021) Agency control or autonomy? Government steering of Swedish government agencies 2003–2017, International Public Management Journal, 24(3), pp. 330-349,

Popović, S. (2014) Socio-ekonomski faktori ograničenja razvoja agrara (Novi Sad: Feljton).

Popović, S., Novaković, S., Đuranović, D., Mijić, R., Grublješić, Ž., Aničić, J. & Majstorović, A. (2017) Application of international accounting standard-16 in a public company with predominantly agricultural activities, Economic Research - Ekonomska Istraživanja, 30(1), pp. 1850–1864,

Rana, T., Wickramasinghe, D. & Bracci, E. (2022) Editorial: Management accounting and risk management—research and reflections, Public Money & Management, 42(6), pp. 361-364,

Radović, M., Vitomir, J. & Popović, S. (2019) The Importance of Implementation of Internal Audit in Enterprises Founded by the Republic of Serbia, Lex Localis - Journal of Local Self-Government, 17(4), pp. 1001–1011,

Radović, M., Vitomir, J. & Popović, S. (2021) Impact of internal control in enterprises founded by local self-government units: the case of Repulbic of Serbia, Inzinerine Ekonomika - Engineering Economics, 32(1), pp. 82-90,

Rogošić, A. & Perica, I. (2022) Affective professional commitment and accounting ethics principles: examining the mediating role of the code of ethics, Economic Research - Ekonomska Istraživanja, 36(1), pp. 480-498,

Stafford, S. & Renaud, A. (2019) Developing a Framework to Identify Local Business and Government Vulnerability to Sea-Level Rise: A Case Study of Coastal Virginia, Coastal Management, 47(1), pp. 44-6,

Tetteh, L., Kwarteng, A., Aveh, F., Dadzie, S. & Asante-Darko, D. (2022) The Impact of Internal Control Systems on Corporate Performance among Listed Firms in Ghana: The Moderating Role of Information Technology, Journal of African Business, 23(1), pp. 104-125,

Trung, N. & McMillan, D. (Reviewing ed.) (2021) The relationship between internal control and credit risk – The case of commercial banks in Vietnam, Cogent Business & Management, 8(1),

Saunila, M., Holopainen, M., Nasiri, M., Ukko, J. & Rantala, T. (2022) Digital transformation with digital twins - distinct mechanisms of enabling and controlling uses, Technology Analysis & Strategic Management,

Shen, Y., Yang, X. & Zhu, B. (2021) Multiple large shareholders and controlling shareholders’ related-party M&As, Applied Economics Letters, 30(3), pp. 397-403,

Shi, X., Bu, D., Wen, C. & Lan, Z. (2021) Financial background of controlling shareholder and corporate financialization, China Journal of Accounting Studies, 9(3), pp. 383-407,

Song, Z, Liu, Y. & Wang, J. (2022) Mandatory internal control and earnings management, Emerging Markets Finance and Trade, 58(12), pp. 3439-3453,

Ugrenović, V., Popović, V., Ugrinović, M., Filipović, V., Mačkić, K., Ljubičić, N., Popović, S. & Lakić, Ž. (2021) Black Oat (Avena strigosa Schreb.) Ontogenesis and Agronomic Performance in Organic Cropping System and Pannonian Environments, Agriculture 2021, 11(1), p. 55,

Uyar, A., Karmani, M., Kuzey, C., Kilic, M. & Yaacoub, C. (2022) Does Governance Quality Explain the Sustainability Reporting Tendency of the Public Sector? Worldwide Evidence, International Journal of Public Administration, 45(13), pp. 931-947,

Vitomir, J., Tomaš-Miskin, S., Ivić, M. & Popović, S. (2020) Implementation of the Tender by the Municipal Service Administration from the Aspect of Management in the Municipalities of the Republic of Serbia, Lex Localis – Journal of Local Self-Government, 8(3), pp. 469–486,

Wanderley, C., Cullen, J. & Tsamenyi, M. (2021) Corporate political strategy: the roles of management accounting in relational work, Accounting Forum, 45(2), pp. 200-226,

Wang, Q., Xue, X., Yang, D. & Lee, C. (2021) Internal control system and mechanism of Chinese listed companies: an empirical study, Enterprise Information Systems, 15(1), pp. 105-130,

Wang, Z., Wang, Q., Nie, Z. & Li, B. (2022) Corporate financial distress prediction based on controlling shareholder’s equity pledge, Applied Economics Letters, 29(15), pp. 1365-1368,

Wang, B., Li, Y., Xuan, W. & Wang, Y. (2022) Internal Control, Political Connection, and Executive Corruption, Emerging Markets Finance and Trade, 58(2), pp. 311-328,

Waska, R. (2009) Controlling, Avoiding, or Protecting the Object: Three Reactions to the Breakdown of Psychic Retreats, Psychoanalytic Social Work, 16(1), pp. 58-75,

Wong, H. & Ip, P. (2021) Social Business Founders’ Values and Their Implementation: A Study of Five Cases in Hong Kong, Journal of Social Entrepreneurship,

Whyte, G. (1999) Inventory, Modelling and Auditing Systems for Planning and Controlling Forestry Operations, Journal of Forest Engineering, 10(2), pp. 27-32,

Wissemann, K., Mathes, B., Meyer, A. & Schmidt, N. (2021) COVID-related fear maintains controlling parenting behaviors during the pandemic, Cognitive Behaviour Therapy, 50(4), pp. 305-319,

Xie, W., Ye, C., Wang, T. & Shen, Q. (2020) M&A goodwill, information asymmetry and stock price crash risk, Economic Research - Ekonomska Istraživanja, 33(1), pp. 3385-3405,

Xu, J., Zhang, Y. & Xie, Y. (2020) Controlling Shareholder’s Share Pledging and Firm’s Auditor Choice, Emerging Markets Finance and Trade, 56(4), pp. 750-770,

Xu, C, Xu, Y. & Li, F. (2022) Can the exit threat of non-controlling major shareholders promote corporate innovation?, Technology Analysis & Strategic Management, 34(8), pp. 876-890,

Xue, C. & Ying, Y. (2022) Financial quality, internal control and stock price crash risk, Asia-Pacific Journal of Accounting & Economics, 29(6), pp. 1671-1691,

Yao, Y. & Xue, S. (2019) Comment letters and internal control opinion shopping, China Journal of Accounting Studies, 7(2), pp. 214-244,

Zhang, H., Xiong, H. & Zhang, L. (2021) The downside of absence of controlling shareholders: evidence from management trading abnormal return, China Journal of Accounting Studies, 9(2), pp. 221-246,

Zhang, H., Zou, Y., Zhang, L., Xiong, H. & Xie, Z. (2022) Absence of Controlling Shareholders and Litigation Risk: Evidence from China, Emerging Markets Finance and Trade, 58(4), pp. 1176-1190,






Most read articles by the same author(s)