Adopting management accounting systems are important events in the life of young and growing companies. Using a sample of 78 startup companies, we document cross‐sectional differences in the adoption of operating budgets as well as seven other management accounting systems. We find that our proxies for agency costs, perceived benefits and costs, company scale, and top management style explain cross‐sectional differences in the time‐to‐adoption of budgets. In particular, the presence of venture capital, CEO experience, presence of a financial manager, number of employees, and the CEO beliefs about management planning systems are associated with this adoption decision. We further investigate the effect of hiring a financial manager as an endogenous variable. In the first stage of a two‐stage model, we find that CEO experience, the presence of venture capital funds, CEO beliefs about management accounting systems, and number of employees are associated with crosssectional variation in this hiring decision. When treating this decision as endogenous, time‐to‐hiring a financial manager is unrelated to operating budget adoption. The paper also examines the association between the time‐to‐adoption of operating budgets and company performance. We find a significant increase in the number of employees of the company around the adoption of operating budgets; moreover, faster adoption of operating budgets is associated with faster growing companies. We extend the findings to additional management accounting systems including: cash budgets, variance analysis, operating expense approval policies, capital expenditure approval policies, product profitability, customer profitability, and customer acquisition costs. The influence of industry (biotechnology, information technology, or non‐tech) is examined in each stage of the research.

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