Evolution of EU public sector financial accounting standardisation: critical events that opened the window for attempted policy change

Abstract

This paper analyses agenda-setting for EU policy change in respect to public sector accounting harmonisation, adopting the garbage can model for its theoretical framework. It utilises qualitative research methods to determine what caused the window of opportunity to open, why it led to a proposal for compulsory public sector accounting standardisation for member states and why the International Public Sector Accounting Standards were not adopted by the EU. It concludes that harmonised accrual accounting is likely to be only a minor instrument of EU fiscal governance and its Excessive Deficit Procedure aiming to prevent governments running structurally unbalanced public finances.

Implementation of the international public sector accounting standards in Europe. Variations on a global theme

“…As they formally have the character of recommendations (IPSASB, 2020;Oulasvirta & Bailey, 2016), the IPSAS serve as guidelines for governments and national standard setters to formulate or revise their own national accounting standards, which then comply to a greater or lesser degree with IPSAS (Caruana, 2019). Especially for emerging economies, the IPSAS take the role of a quasi-benchmark (Toudas et al, 2013).…”

“…have only partially implemented IPSAS or have made significant amendments to certain standards (Grossi & Steccolini, 2015). This is possibly because IPSAS serve primarily as principle-based guidelines for governments to establish their own standards and therefore represent a set of "soft" standards (Oulasvirta & Bailey, 2016).…”

“…Adoption of IPSAS issued by the IPSAS Board (IPSASB) is not mandatory (IPSASB, 2020;Oulasvirta & Bailey, 2016). Given this, governments confronted with the decision to implement IPSAS (we synonymously refer to this as the "translation of IPSAS into national accounting systems") have the choice between unaltered adoption, partial adoption (i.e.…”

Building legitimacy for European public sector accounting standards (EPSAS)

“…8 A total of 1.2 Eur million was awarded to 6 MS (7 projects) in 2015. Oulasvirta and Bailey, 2016), statisticians and accountants and MS public authorities. The latter started to take positions against such developments or expressed different positions to the centralised top down approach (see for example Bundesrechnungshof, 2017;CFRR, 2016).…”

“…Among others, Biondi (2014), Calmel (2014), Mussari (2014), Aggestam and Brusca (2016) focused on EPSAS issues and process of harmonisation. Heald and Hodges (2015) and Oulasvirta & Bailey (2016) Biondi and Boisseau-Sierra (2017), Biondi (2016), Dabbicco (2015Dabbicco ( , 2018 focused on technical issues, e.g. recognition, measurement issues and impact of implementation of accrual.…”