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The Impact of Accounting Basis and Applied Financial Reporting Framework on the Corruption Perception Index in the Public Sector

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  • Anida Jagodić

    (Faculty of Economics, University of Tuzla,Bosnia and Herzegovina)

  • Amra Gadžo

    (Faculty of Economics, University of Tuzla, Bosnia and Herzegovina)

  • Faruk MeÅ¡ković

    (Faculty of Economics, University of Tuzla,Bosnia and Herzegovina)

Abstract

This paper investigates the impact of different accounting bases and financial reporting frameworks on the Corruption Perceptions Index (CPI) in the public sector. Specifically, it examines how various accounting approaches (cash, modified cash, accrual, and modified accrual) and reporting frameworks (national accounting standards, International Public Sector Accounting Standards-IPSAS with or without modifications, and other frameworks) influence the perception of corruption in public institutions. The study uses a sample of 147 countries, with the CPI as the dependent variable and accounting basis and financial reporting framework as independent variables. The results of the ANOVA analysis reveal a statistically significant difference in corruption perception indices among countries employing different accounting bases. The results of this study indicate that countries applying simpler accounting frameworks, such as national standards and IPSAS modified for the local context, show a lower perception of corruption, as evidenced by a higher CPI value. In contrast, more complex frameworks, including IPSAS or national standards referencing IPSAS, combined with cash and partial accrual bases, do not significantly reduce corruption perception. Additionally, countries using national standards based on IFRS exhibit the lowest levels of perceived corruption in the public sector.

Suggested Citation

  • Anida Jagodić & Amra Gadžo & Faruk MeÅ¡ković, 2024. "The Impact of Accounting Basis and Applied Financial Reporting Framework on the Corruption Perception Index in the Public Sector," Eurasian Journal of Business and Management, Eurasian Publications, vol. 12(3-4), pages 132-141.
    • Handle: RePEc:ejn:ejbmjr:v:12:y:2024:i:3-4:p:132-141
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    References listed on IDEAS

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    1. Blane D. Lewis & Adrianus Hendrawan, 2020. "The impact of public sector accounting reform on corruption: Causal evidence from subnational Indonesia," Public Administration & Development, Blackwell Publishing, vol. 40(5), pages 245-254, December.
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