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Article
Publication date: 19 March 2020

Ricardo Rocha de Azevedo, André Feliciano Lino, André Carlos Busanelli de Aquino and Túlio César Pereira Machado-Martins

The successful implementation of International Public Sector Accounting Standards (IPSAS) depends on the adoption and subsequent maintenance of accrual accounting policies

Abstract

Purpose

The successful implementation of International Public Sector Accounting Standards (IPSAS) depends on the adoption and subsequent maintenance of accrual accounting policies. Moreover, Financial Management Information Systems (FMIS) are important drivers of reforms, and their replacement might disrupt the execution of accrual accounting policies. This paper aims to analyze the effects of FMIS replacement (or maintenance) on the retention of accrual accounting policies in Brazilian local governments.

Design/methodology/approach

The research adopts a sequential mixed-methods approach, starting with a quantitative analysis of the presence of accrual accounting policies in local governments and the effects of FMIS replacement. Next, a qualitative analysis is conducted with a survey, documents and interviews to observe the FMIS replacement process. Our analysis focuses on local governments from one state in Brazil, but the context is highly transferable to other states, as the same procurement law and accounting regulations apply.

Findings

FMIS replacement may reduce accounting policies retention; consequently, public procurement regulation may induce a public procurement context in which the IPSAS project would find more difficulties to prosper.

Research limitations/implications

This research contributes to the IPSAS literature by examining the phenomenon of accounting policies retention or persistence, as one should not take it for granted that an adopted accounting procedure will be sustained over time. The analysis argues that FMIS replacement due to compulsory rebidding should be carefully considered.

Practical implications

Promoters of accounting reforms may consider the regulation of contracting out for FMIS a relevant issue to the institutionalization of accounting policies.

Originality/value

The analysis innovates by linking IPSAS accounting reform to the contracting out of FMIS.

Details

International Journal of Public Sector Management, vol. 33 no. 2/3
Type: Research Article
ISSN: 0951-3558

Keywords

Article
Publication date: 31 December 2007

Rhoda Brown and Mark Whittington

The choice of accounting policies by a company has implications for the market’s understanding of corporate performance. Whilst the critical areas of choice may change over time…

2809

Abstract

The choice of accounting policies by a company has implications for the market’s understanding of corporate performance. Whilst the critical areas of choice may change over time with new developments and changes in standards, the underlying issue remains relevant. This paper examines the effect of accounting techniques upon the relationship between accounting variables and UK share prices.

Details

Journal of Applied Accounting Research, vol. 8 no. 3
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 1 December 1999

Christine Ryan

In the past two decades, the public sector both in Australia and overseas has undergone a period of intense change. The focus has been on efficiency, effectiveness and value for…

7480

Abstract

In the past two decades, the public sector both in Australia and overseas has undergone a period of intense change. The focus has been on efficiency, effectiveness and value for money of public sector operations. The methods by which governments account and report on their operations has received scrutiny. While Treasuries and Departments of Finance in each Australian jurisdiction have traditionally formulated the reporting and accounting rules used in the public sector, since 1983, with the formation of the Public Sector Accounting Standards Board (PSASB), the accounting profession has become involved in the setting of accounting standards for the public sector. Several researchers have suggested that a “contest” exists between the accounting profession and the government regulators for control over the public sector accounting standards process. This paper explores the processes whereby the public sector in Australia formulates its financial reporting policies by examining the interactions between the PSASB and the government regulators in each of the Australian jurisdictions. Policy community and policy network theory are used to argue that policy is formulated by a “cooperative” grouping of accounting professionals from the central agencies of Treasuries and Departments of Finance and the PSASB. The paper concludes that this method of policy formulation has implications for the content of policy and for the access of stakeholders to the formulation of that policy.

Details

Accounting, Auditing & Accountability Journal, vol. 12 no. 5
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 1 December 1998

Christine Ryan

Governments in Australia are in the process of implementing accrual reporting for their departments and governments as a whole. The central issue of this paper is to provide an…

8414

Abstract

Governments in Australia are in the process of implementing accrual reporting for their departments and governments as a whole. The central issue of this paper is to provide an explanation as to how general purpose financial reporting became a significant issue for governments in Australia. Agenda‐setting literature provides the framework within which to analyse the specific events and strategies used by public sector accountants to promote accrual technologies. The main finding of the research is that accrual technologies have been promoted by public sector accountants working from within government institutions, and often aligned with the organised accounting profession. Prior to the late 1980s the Auditors‐General were the main actors involved, however, more recently, accounting technologies have been promoted by accounting policy units within Treasuries and Departments of Finance. The paper concludes with a call for future research on the implications of such accounting changes for organisational and social functioning.

Details

Accounting, Auditing & Accountability Journal, vol. 11 no. 5
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 1 March 2009

Deborah A. Carroll and Justin Marlowe

Positive accounting theory suggests jurisdictions will meet their stakeholders’ financial information needs at the lowest possible cost, and current accounting policy will change…

Abstract

Positive accounting theory suggests jurisdictions will meet their stakeholders’ financial information needs at the lowest possible cost, and current accounting policy will change if it does not accomplish that objective. This paper examines the breadth of stakeholders who are associated with accounting policy. We use multivariate methods to determine which among a group of potential users including taxpayers, interest groups, local government managers, the municipal credit market, and other governmental entities are correlated with accounting policy among municipal governments in Illinois. The results suggest one particular stakeholder - the municipal credit market - is an important determinant of the use of Generally Accepted Accounting Principles (GAAP). The analysis shows that professionalism, history, and administrative capacity are also associated with a municipality’s accounting policy.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 21 no. 4
Type: Research Article
ISSN: 1096-3367

Book part
Publication date: 3 July 2017

Martin Schmidt

This paper analyzes what factors drive a company’s decision to align financial and management accounting policies as a measure of integration of management accounting and…

Abstract

Purpose

This paper analyzes what factors drive a company’s decision to align financial and management accounting policies as a measure of integration of management accounting and financial accounting at the highest hierarchy levels of a company.

Methodology/approach

Research hypotheses for six different determinants are developed: company size, number of operating segments and subsidiaries, internationality of the business, business strategy, company life cycle stage, and leverage. The hypotheses are tested using International Financial Reporting Standards 8 (IFRS 8) segment report data from a large sample of 175 German publicly listed companies.

Findings

A higher internationality of the business causes companies to choose a lower degree of integration. Companies with a prospector (defender) strategy choose a lower (higher) degree of integration. Companies in later life cycle stages and with higher leverage choose a lower degree of integration as well. Company size does not impact integration.

Practical implications

Companies have to decide whether, and to what extent, to integrate financial and management accounting and align the two sets of accounting policies. German companies have traditionally kept the two sets separate. As the research reported in this paper sheds light on when companies do not consider integration to be beneficial, it is useful for practitioners.

Originality/value

The legal reporting requirements in Germany as well as German accounting traditions make the German setting particularly suited for examining the integration of management accounting and financial accounting. Using the number of adjustments to financial accounting policies made for management accounting purposes is a novel approach, and the number of adjustments is a more fine-grained measure of integration at the highest hierarchy levels of a company than the measures used in prior literature.

Abstract

Details

Quality Control Procedure for Statutory Financial Audit
Type: Book
ISBN: 978-1-78714-226-8

Article
Publication date: 1 October 2010

J. Rossouw

Although the intention of the International Accounting Standards Board (IASB) is not to permit choices in the accounting treatment of similar transactions and events…

Abstract

Although the intention of the International Accounting Standards Board (IASB) is not to permit choices in the accounting treatment of similar transactions and events, International Financial Reporting Standards (IFRSs) still contain various choices of accounting treatment. Different accounting alternatives for similar transactions limit the comparability of financial information. Certain accounting policies result in differences in recognition, measurement and disclosures. This article identifies 16 such accounting policy choices and presents the descriptive empirical results on which accounting policies were in fact chosen by a sample of 157 South African listed companies, in cases where IFRSs allow a choice between alternative accounting policies. Disclosure of accounting policies is necessary for the users of financial statements to enable them to compare the financial statements of various entities in making economic decisions. The research also found a lack of disclosures relating to chosen accounting policies in limited cases.

Details

Meditari Accountancy Research, vol. 18 no. 2
Type: Research Article
ISSN: 1022-2529

Keywords

Article
Publication date: 1 December 2000

Niamh Brennan and Sidney J. Gray

Profit forecasts are rarely disclosed in the UK except in prospectuses, circulars and during takeover bids. There are few regulations governing the content of profit forecasts…

1131

Abstract

Profit forecasts are rarely disclosed in the UK except in prospectuses, circulars and during takeover bids. There are few regulations governing the content of profit forecasts. Under stock exchange rules these forecasts must be reported on by both reporting accountants and the merchant bankers advising on the deal. The format of the forecasts is at the discretion of individual companies. This paper summarises the regulations, including professional pronouncements, governing accountants’ reports on profit forecasts. Practical examples of such accountants’ reports extracted from 250 profit forecasts published during 701 UK takeover bids in the period 1988 to 1992 are reproduced and discussed. These examples provide useful precedent material for practitioners involved in reporting on a profit forecast. The paper concludes with a discussion of policy issues and suggestions for policy makers.

Details

Managerial Auditing Journal, vol. 15 no. 9
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 1 March 1996

C. William Garner

The reactions to informal surveys conducted by the author about the effort to set a national policy that would include public school districts indicated it was either largely…

Abstract

The reactions to informal surveys conducted by the author about the effort to set a national policy that would include public school districts indicated it was either largely unknown or not understood by many school officials and professors of education administration. Thus, an inquiry was conducted to document the historical basis for creating the double entry method of accounting, the impetus for a national accounting policy, and the relevance to public school districts. The ultimate objective of the inquiries, therefore, was to offer a set of conclusions regarding the current status of accounting and budgeting policies with particular reference to their potential influence on the practices of public school districts.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 8 no. 2
Type: Research Article
ISSN: 1096-3367

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