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Accounting accruals are at the heart of most accounting systems. A basic premise of accrual accounting is that it provides a more timely and relevant performance measure than cash flows through a better matching of revenues and expenses. While some prior studies suggest that managers use individual accrual‐related disclosure items in an opportunistic manner, hindering market participants’ ability to predict future firm performance, the market’s expectation about future firm performance will become more accurate and consistent under accrual accounting if the market properly uses such information to set expectations about future firm performance. Consistent with this idea, our evidence shows that the frequency of accrual‐related disclosure is positively (negatively) associated with analysts’ forecast accuracy (dispersion). We interpret this finding as the presence of more detailed accrual‐related disclosure requirements enhancing the market participants’ ability to predict earnings.

This paper aims to contribute to the debate over the desirability of introducing an accrual-based accounting system in the public sector by examining whether accrual-based accounting information is superior to cash-based information in the context of public sector entities.

This paper applies a quantitative research method to assess the degree of smoothness and relevance of the accrual components of income recorded by 302 entities of the Italian National Health Service (INHS) over the period 2014–2020.

The analysis reveals that net income is smoother than cash flows as a summary measure of economic results and that accounting for accruals improves the predictability of future cash flows. However, the authors' novel disaggregation of accrual accounts reveals that those accounts that contribute the most to making income smoother than cash flows – noncurrent assets and liabilities – are also those that contribute the least to predicting future cash flows.

The disaggregation of accrual accounts allows to identify the sources of the informational benefits of accrual accounting, and to document the existence of an informational “trade-off” between smoothness and relevance in the context of public sector entities.

This paper examines the enterprise resource planning (ERP) systems of 27 European central governments and the governments' respective information technology (IT) reforms, facilitator role and association with accrual accounting reforms as premise of the International Public Sector Accounting Standards (IPSAS).

This paper presents a qualitative and content analysis of 27 European Union (EU) member states (MSs) regarding the states' IT and accounting maturity in association with accrual accounting as breeding ground for IPSAS convergence based on published surveys on behalf of Eurostat, web data and emails collected from authorized officials.

This paper has found that (1) increased accounting and IT maturity scores of central governments are associated with the establishment or upgrade of ERP systems; (2) ERP systems prove to facilitate and support accrual accounting adoption; (3) in majority, EU MSs adopt similar ERP vendors to implement accrual accounting reforms; (4) with prevalence among ERP vendors, the Systems Application Products (SAP) ERP software proves to be a success story toward public sector accounting (PSA) reforms.

Respective information on the ERP systems' facilitation to financial accounting reforms is collected only for 17 central governments.

This paper highlights the facilitation of ERP systems as reform drivers to accrual accounting change of EU MSs, through IT modernization. This paper links the ERP practices with specific ERP vendors pointing out the vendors' similarities. This paper presents examples of European ERP reforms and sets the reforms as reference for central governments that wish to embark on ERP and accrual accounting reforms.

This study aims to examine whether accounting comparability between two firms, as measured by De Franco et al. (2011), reflects closeness in the amounts of cash flows and accruals between the firms.

Using 278,452 pair-year observations over the years 2003–2019, the author evaluates the research question using regression models.

Closeness in cash flows and closeness in accruals both increase accounting comparability and the effect of closeness in cash flows is greater. The effect of closeness in earnings is greater than the combined effects of closeness in cash flows and accruals. Earnings quality strengthens, while product closeness weakens, the effects of closeness in earnings and closeness in cash flows.

To the best of the authors’ knowledge, this study is the first to empirically test the link between the closeness in earnings components and accounting comparability. This study is also the first to examine cash flows versus accruals in the context of accounting comparability.

Until the end of 1997, governmental accounting in Portugal was characterised as essentially cash-based budgetary accounting, using singleentry as the bookkeeping method. The only compulsory accounting system was Budgetary Accounting. As many countries all over the world, nowadays Portugal is implementing a reform of the whole governmental accounting, which has as most important innovations the use of double-entry within a system compulsorily integrating accrual-based Financial and Cost Accounting along with Budgetary Accounting (still essentially cash-based). The main purpose of this paper is to describe and analyse the reform and current situation of governmental accounting in Portugal, especially discussing the accrual basis implementation. In particular, it shows that not only governmental accounting reform in Portugal has been going towards international harmonization, but also problems that have arisen are common to others faced by several countries. Perspectives of future evolution are also presented.

The purpose of this paper is to add to our understanding of the nature of accrual accounting by examining the process involved in its construction, as a dynamic and controversial process. This paper reveals how it is built and constantly modified, reinforced or negated during the process of implementation.

This paper’s focus on a government initiative with multiple actors present in the laboratory. Specifically, this study offers a close examination of the day-to-day activities of a laboratory case study; it focuses on participant observation in video conference calls. The discussions held by the project teams are analyzed to extend our inquiry into the most intimate aspects of fact construction (Latour and Woolgar, 1979). These excerpts illustrate the processes of accrual accounting construction and open up the possibility of studying the emergence of accrual accounting through the lens of an action net.

The evidence collected reveals the absence of a well-defined template for implementing accrual accounting in government. These results reveal an elaborate process of improvisation and fabrication in the design of this accounting system and a fragile network in action.

Prior research on accrual accounting in government focuses on the examination of existing accrual accounting systems with somewhat puzzling results on lack of use. In this study, the perspective has been shifted from focusing on accrual accounting as self-evident (Lapsley et al., 2009) to examine its construction. This paper examines this tension between the apparent certainties as espoused by practitioners and the problematic nature of accrual accounting in government. It extends our knowledge of “black box accrual accounting,” and shows that it is a fluid object with significant discretion in the determination of practice.

The purpose of this paper is to examine the change from cash accounting to accrual accounting, identifying and assessing the institutional and organisational barriers that may affect this process. A specific focus on knowledge gaps is provided.

The study employs a mixed method design, combining action research activities, a survey, and in-depth qualitative interviews in the setting of Italian public universities.

The findings highlight a low degree of compliance with the accrual accounting system and budgeting system, which is the result of the lack of an accrual accounting culture in the Italian public sector.

The analysis confirms some barriers to the transition highlighted by previous literature and also adds further explanations of such limitations in terms of the lack of skills and accounting knowledge of the universities’ administrative staff possesses.

The purpose of this paper is to evaluate the merits of accrual-based accounting for the public in an Indonesian local government. It gives insights into the connection between the new practices and responses from government apparatus.

The paper applies genetic structuralism from Pierre Bourdieu to study the interrelation of habitus, field and capital in the accrual accounting implementation.

The result indicates a symbolic dominance of central government in the implementation of accrual-based accounting in the local government. Accrual accounting is considered to be a technique of government accountability which is independent from political and social situation.

The accrual accounting implementation preoccupies the government officials in their study of the preparation of financial statements while its utilization to increase the public welfare is still ignored.

The government still prioritizes accountability and transparency for managerial and political purposes. Hence, the public interest is less superior compared with the formalities established between governments – the central government and local governments – and the regional legislator.

This paper contributes to the evaluation of the alignment of government policy with the public interest.

In this paper an analysis is made of significant accounting and budgetary reforms that have recently been introduced within the framework of a broader reform called New Public Management. These reforms have led to the adoption of the accrual basis in accounting in many developed countries (i.e. the effects of transactions or events are recognized when they take place, irrespective of the moment when cash is paid or received). However, in 2003 it has only been adopted in budgeting by three of them: New Zealand, Australia and the United Kingdom. In this paper the international situation is analyzed with a view to the future adoption of the accrual basis in budgeting.

The purpose of this paper is to explore the coexistence of cash accounting and accrual accounting systems through an investigation of the roles they fulfill in Greek municipalities.

The survey results are based on the answers of the financial department principals of 106 municipalities to a structured questionnaire. The roles of accounting investigated are informed by Ansari and Euske's model.

It appears that cash accounting information prevails in the major function of decision making, with accrual accounting information playing a secondary role. Larger municipalities seem to use accounting data more extensively than smaller ones for negotiations, both in accrual and cash terms.

The study sheds light on the actual use of accrual accounting information in a public sector setting, where customarily decisions were based on cash accounting considerations.