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

Abstract

As part of introducing accrual accounting in the public sector, many governments havevoluntarilyimplemented the International Public Sector Accounting Standards (IPSAS) for financial reporting. Amongst other claimed benefits, IPSAS have been argued to facilitate comparison of adopters' financial reports and to lead to favourable conditions on credit markets. However, governments that are confronted with the implementation decision face a trade-off between unaltered adoption, partial adoption, adaptation and non-adoption of standards. Drawing on insights from the literature on standardization and practice variation, this paper analyses the reasons, expressed by various actors from nine European countries, for deviating from implementing unaltered IPSAS and proposes a taxonomy of these reasons. The results show that, first, substantial deviations exist, and second, there is a plethora of reasons for them. These deviations are presented and then structured in the further course of the paper. As a consequence of deviations, achieving comparability as the central aim of standardization runs the risk of being undermined.

Is IPSAS Implementation Related to Fiscal Transparency and Accountability?

“…But despite the supposed benefits of IPSAS adoption, such as harmonization, comparability, transparency, and accountability (Brusca et al, 2016;Brusca & Montesinos, 2014;Gómez-Villegas et al, 2020;Polzer et al, 2021;Schmidthuber et al, 2020), there is not enough empirical evidence on the respective relations, which justifies this research. Furthermore, it is difficult to determine whether IPSAS adoption is related to real benefits when the process has been slow and ambiguous.…”

“…There are many governments around the world in a race to implement International Public Sector Accounting Standards (IPSAS) 1 with the hope of improving state intervention, efficiency, comparability, transparency, and accountability (Association of Chartered Certified Accountants [ACCA], 2017; Deloitte, 2013;International Public Sector Accounting Standards Board [IPSASB], 2014 ;Lusinyan, et al, 2009;Polzer, Grossi, & Reichard, 2021), but with uncertainty about the compliance of those goals. For their part, multilateral institutions state that the adoption of IPSAS allows obtaining high quality public financial reporting and favors transparency and accountability (Ball, 2012;Brusca, Gómez-Villegas, & Montesinos, 2016;Castañeda-Rodríguez, 2019;Schmidthuber, Hilgers, & Hofmann, 2020), although implementing them is a costly process in terms of money and time (Carnegie & West, 2005), and does not guarantee better results in those matters.…”

“…Indeed, improving transparency and accountability requires an active role of the citizens since it is more likely that governments take responsibility for their actions when people request information on public issues and exercise citizen oversight (Fung, 2015). In addition, although IPSAS define some criteria for recording, disclosing, and measuring economic transactions, they leave without deep discussion many topics (e.g., pension funds and heritage assets) (Biondi & Lapsley, 2014), which hampers harmonization and comparability (Polzer et al, 2021). For instance, some balance sheet items are not traded in an active market (e.g., many intangible assets), which gives rise to estimations that may be arbitrary and unreliable (Carnegie & West, 2005).…”

Accounting and tax aspects of expenses in double accounting in Slovakia

“…In literature in this area, no special attention is paid to the comparison of these 2 aspects, which we deal with in the presented article (Henrique et al, 2020;Hajnal, 2021;Hillebrandt, Leino-Sandberg, 2021;Patel, Harrison, 2021;Polzer et al, 2021). In accounting, we report taxes as costs by type, which represent a burden for entrepreneurs and serve to signal the amount of output and sales and control expected contributions to the state budget.…”

Accounting aspects of revenues in double entry accounting of Slovakia and comparison with international accounting standards

“…The basic structure of financial statements is defined in International Accounting Standards. The authors state, that incorrect presentation of deferred tax liability can be caused by different application of basic accounting principles (Lu, et al 2014;Tvaronavičienė, 2018;Bernstein, Wild, 1999;Kajanová, 2014aKajanová, , 2014bSavina, et al 2021;Miah, 2021;Polzer, 2021).…”