International organizations have encouraged national governments to switch from traditional cash-based to business-like accrual accounting, on the presumption that long-run benefits may outweigh substantial implementation and operating costs. We use a quasi-experimental setting to evaluate whether changing public sector accounting standards is justified. Some local governments in the German federal state of Bavaria introduced accrual accounting while others retained cash-based accounting. Difference-in-differences and event-study results do not show that (capital) expenditures, public debt, voter turnout, or government efficiency developed differently after changes in accounting standards. Operating costs of administration, however, increase under accrual accounting.