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The Use and Abuse of Accounting in the Public Sector Financial Management Reform Program in Australia

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  • ALLAN BARTON

Abstract

Accrual accounting has been central to financial management reforms designed to promote greater efficiency, effectiveness and accountability in the Australian public sector. This is the setting for the article; however, the issues covered apply to all nations that have reformed their public sectors over recent years. The results of the reforms have been mixed. While accrual accounting has had some beneficial results for the above purposes, the benefits have been offset by aspects of accounting misuse resulting largely from adoption of the business model of accrual accounting, termination of the former cash accounting system, and adoption of some questionable marketization reforms which appear to be more driven by the objective of reducing the size of government rather than enhancing efficiency of operations. Because Treasury believed that the business model was not appropriate for budget fiscal policy purposes, it introduced a second combined accrual and cash accounting system—the Government Finance Statistics system. The use of two accrual accounting systems reporting different results caused much confusion in parliament.

Suggested Citation

  • Allan Barton, 2009. "The Use and Abuse of Accounting in the Public Sector Financial Management Reform Program in Australia," Abacus, Accounting Foundation, University of Sydney, vol. 45(2), pages 221-248, June.
    • Handle: RePEc:bla:abacus:v:45:y:2009:i:2:p:221-248
    DOI: 10.1111/j.1467-6281.2009.00283.x
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    2. Milana OTRUSINOVÁ, 2016. "Public sector accounting in the Czech Republic and Slovakia," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2016(27), pages 30-45, Decembre.
    3. Ahmad Amar Sayed & Nasseredine Hassan, 2019. "Major Challenges and Barriers to IPSASs Implementation in Lebanon," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 13(1), pages 326-334, May.
    4. Khoirul Aswar, 2019. "Factors on the Accrual Accounting Adoption: Empirical Evidence from Indonesia," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 12(3), pages 36-42, December.
    5. Spies-Butcher, Ben & Bryant, Gareth, 2024. "The history and future of the tax state: Possibilities for a new fiscal politics beyond neoliberalism," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 98(C).
    6. Amar SAYED AHMAD & Hassan NASSEREDINE, 2019. "Major Challenges And Barriers To Ipsass Implementation In Lebanon," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 27-36, June.
    7. Karen Benson & Peter M Clarkson & Tom Smith & Irene Tutticci, 2015. "A review of accounting research in the Asia Pacific region," Australian Journal of Management, Australian School of Business, vol. 40(1), pages 36-88, February.
    8. Anup Chowdhury & Nikhil Chandra Shil, 2017. "Public Sector Reforms and New Public Management: Exploratory Evidence from Australian Public Sector," Asian Development Policy Review, Asian Economic and Social Society, vol. 5(1), pages 1-16, March.
    9. Wonder Agbenyo & Yuansheng Jiang & Prince Komla Cobblah, 2018. "Assessment of Government Internal Control Systems on Financial Reporting Quality in Ghana: A Case Study of Ghana Revenue Authority," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(11), pages 1-40, November.
    10. Ali Kassem & Ionescu Bogdan Stefan, 2019. "Is Adoption Of Ipsas Constitutes Support To Different Security Systems Adopted In The Lebanon Public Accounting Sector?," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 4-12, August.
    11. Vincenzo Sforza & Riccardo Cimini, 2017. "Running the Obstacle Race towards Public Accounting Harmonization in EU-28: A Temporal Study," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(3), pages 1-49, February.
    12. Rooney, Jim & Dumay, John, 2016. "Intellectual capital, calculability and qualculation," The British Accounting Review, Elsevier, vol. 48(1), pages 1-16.
    13. Zubir Azhar & Ervina Alfan & Krishnen Kishan & Nurul Husna Assanah, 2022. "Accrual Accounting at Different Levels of the Public Sector: A Systematic Literature Review," Australian Accounting Review, CPA Australia, vol. 32(1), pages 36-62, March.
    14. Ralph Kober & Janet Lee & Juliana Ng, 2013. "GAAP, GFS and AASB 1049: perceptions of public sector stakeholders," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(2), pages 471-496, June.
    15. Mussari Riccardo, 2014. "EPSAS and the Unification of Public Sector Accounting Across Europe," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 4(3), pages 299-312, December.

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