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

Date

2009

Authors

Barton, Allan

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Volume Title

Publisher

University of Sydney Press

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.

Description

Keywords

Keywords: Accrual accounting; Financial management reforms; Public choice theory; Public sector

Citation

Source

Abacus

Type

Journal article

Book Title

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License Rights

DOI

10.1111/j.1467-6281.2009.00283.x

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