Institutionalisation of the Cash Basis International Public Sector Accounting Standard in the Central Government of Bangladesh

Abstract

Purpose -This paper examines public sector accounting reforms, mainly the adoption and implementation of the Cash Basis International Public Sector Accounting Standard (IPSAS) in the central government of Bangladesh.Design/Methodology/Approach -Drawing on the ideas of new institutionalism, the paper investigates the factors which have forced the country to accept the Cash Basis IPSAS but have delayed its implementation in practice.Findings -Different approaches towards the Cash Basis IPSAS are now distinct in the central government of Bangladesh. Differences between Bangladesh and other emerging economies have been narrowed as the potency of institutional pressures has increased, and there is a risk, as experienced in other emerging economies, that the very adoption of the Cash Basis IPSAS may remain more a rhetoric than a reality in Bangladesh. The paper demonstrates that the extent to which professional accountants and their associations participate in reforms determines the public sector accounting reform trajectories in emerging economies.Practical implications -The paper demonstrates that reforms driven by indigenous administrators can have the potential of becoming more instrumental in emerging economies than the externally propagated reforms, such as IPSASs and accrual accounting. What is important is to advance incrementally those public sector accounting reforms that local administrators have identified as important, that they could cope with their existing knowledge and capacity, and that they are interested in engaging with the reform process.Originality/value -Firstly, the study has contributed to extending neo-institutional theory by bringing out the responses of different stakeholders responsible for implementing public sector accounting reforms, mainly the Cash Basis IPSAS, in practice. Next, the paper has raised a question as to whether the Cash Basis IPSAS could be an appropriate reform measure for the central government of Bangladesh.

Unintended consequences in implementing public sector accounting reforms in emerging economies: evidence from Egypt, Nepal and Sri Lanka

“…This practice diversity challenges the global debate of public sector accounting harmonisation articulated by international organisations and standard setters (Argento et al, 2018). Next, extending the findings of prior work in emerging economies (Busca et al, 2016;Goddard et al, 2016;Adhikari et al, 2013 andRajib et al, 2019), we have illustrated why the diffusion of public sector accounting reforms and their adoption by emerging economies, as championed by international organisations, has remained ineffective in practice. As such reforms have not only experienced delay and resistance at the implementation stage, as they have been diffused and adopted de-emphasising the specific contextual elements, in many cases they have resulted in internal conflicts and unintended consequences, including the fabrication of results, without any evidence of yielding better results for public sector governance and accountability.…”

“…Russia and Indonesia are other examples where the externally propagated accounting reforms fitted very well into the top political contexts in terms of maintaining legitimacy, but contradicted the public sector accounting traditions, thereby keeping the existing system intact (Khodachek and Timoshenko, 2017;Harun et al, 2012). That public sector accounting reforms have represented facades, simply adding a layer over the existing practices, is also evident in other emerging economies, including Ghana and Benin (Lassou, 2017), Bangladesh (Rajib et al, 2019), Indonesia (Harun et al, 2012), and Nepal and Sri Lanka (Adhikari et al, 2013;Yapa and Ukwatte, 2015). In sub-Saharan Africa the adoption of accrual accounting has engendered more harm in practice by opening up a space for corruption, patronage and neopatrimonialism to proliferate (Bakre et al, 2017;Goddard et al, 2016).…”

“…Egypt. In a range of emerging economies, international organisations have employed professional accountants and their associations as a channel through which to communicate the benefits of accrual accounting(Rajib et al, 2019). Such an absence of a professional channelto diffuse the superiority of accrual accounting perhaps serves as a reason why the diffused reforms in Egypt were more focused on improving the existing cash accounting and maintaining consistency with the budget (World Bank, 2015).…”

Factors Influencing Implementation of Accrual Based International Public Sector Accounting Standards in Tanzanian Local Government Authorities

“…Previous findings have reported that presence of conducive policies leads to effective implementation of any accounting reforms [54,67]. In addition, Rajib [9] and Kalulu [52] highlighted that presence of political will and support from the oversight bodies facilitates implementation of accrual-based IPSAS.…”

“…Past studies have reported that developing countries are implementing them as a mere fashion, accompanied by non-preparedness of accountants and auditors [5,6,7,8]. In addition to that, most of them are adopting and implementing accrual-based IPSAS as a response to pressure from development partners [1,9,10,11,12,13]. This indicates that there are factors that influence the implementation of accrual-based IPSAS, in the Public Authorities, Local Government Authorities (LGAs) and Central Government [14,3].…”