Arguments for introducing accrual based accounting in the public sector

Bunea-Bontaş, Cristina Aurora and Petre, Mihaela Cosmina (2009): Arguments for introducing accrual based accounting in the public sector.

Abstract

From a long time, accounting for public entities has been on a cash basis, with no change until the '80s when it was considered appropriate that these should move closer to commercial accounting principles practiced in the private sector. Demands for better accountability by governments and by public sector managers are being heard around the world as the public realizes that living on credit is not sustainable for individuals and the same principle applies to governments. The paper highlights the main characteristics of accrual accounting, arguments and counter-arguments on this reform and particular aspects of Public Accountancy reform in Romania through introduction of accounting-based accrual, in order to facilitate better planning, financial management and decision making in government as well as an accepted way of measuring the economy, efficiency and effectiveness of public policies.

• Item Type: MPRA Paper
• Language: English
• Keywords: public sector, accrual-based accounting, public accountancy reform in Romania
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing > M41 - Accounting

References

CRMFP, Planul Strategic de Dezvoltare pentru Reforma Managementului Finanţelor Publice 2005-2007, www.mfinante.ro/plan_strategie

Cudia, Cynthia P., Application of Accrual and Cash Accounting: Implications for Small and Medium Enterprises in Metro Manila, DLSU Business & Economics Review, Volume 17 No. 1/2008, www.philjol.info/index.php

Ecobici, Nicolae, IPSAS versus National Norms on Public Institutions’ Own Capitals, MPRA Paper, 2008, http://mpra.ub.uni-muenchen.de

FEE, The Adoption of Accrual Accounting and Budgeting by Governments (Central, Federal, Regional and Local), 2003, www.fee.be

FEE PSC, Accrual Accounting in the Public Sector, 2007, www.fee.beeupload

Khan, Abdul; Mayes Stephen, Transition to Accrual Accounting, PFM Technical Guidance Note No. 1, 2007, http://blog-pfm.imf.org

Pina, Vicente; Torres, Lourdes, Reshaping Public Sector Accounting: an International Comparative View, Canadian Journal of Administrative Sciences, 2003, http://findarticles.com

PSC, Perspectives on Accrual Accounting, IFAC, 1996, www.ifac.org

PSC, Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities, 2nd Edition, Study 14, IFAC, 2003, www.ifac.org

Tait, David (coord.); Hurduzeu, Miruna; Morariu, Vera, Impactul pentru România al introducerii contabilităţii de angajamente pentru instituţiile publice - Raportul Final, Studii de Impact ale Preaderării, Studiul ad-hoc no. B-4, 2002, www.ier.ro/documente

Tiron Tudor, Adriana; Fatacean, Gheorghe, The reform of the Romanian local public governments accounting in the context of the European integration, 2006, http://unpan1.un.org

Wynne, Andy, Is the Move to Accrual Based Accounting a Real Priority for Public Sector Accounting? 2004, www.accaglobal.com/pubs/publicinterest

Wynne, Andy, Accrual Accounting for the Public Sector - A Fad that has had its Day? International Journal on Governmental Financial Management, 2008, www.scribd.com/doc