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Reporting public sector financial results

Author

Listed:
  • Ron Hodges
  • Howard Mellett

Abstract

Part of the process of recent public sector reform has involved replacing traditional cashbased accounts with accrual-based financial statements, similar to those found in the private sector. This article examines the use of accrual-based accounting in the public sector and provides examples from the UK National Health Service of situations where the accruals system may be deemed inappropriate. It shows that one possible response is to withdraw from the accruals mode and revert to cash measures, deeming the accruals adjustments to be ‘merely technical’. An alternative response is to change the mode of operating so that the cash impact of a transaction matches its accruals reporting impact. The conclusion is that there are modifications to public sector accounting practices away from those of the private sector that undermine the metaphor of running the public sector ‘like a business’.

Suggested Citation

  • Ron Hodges & Howard Mellett, 2003. "Reporting public sector financial results," Public Management Review, Taylor & Francis Journals, vol. 5(1), pages 99-113, March.
    • Handle: RePEc:taf:pubmgr:v:5:y:2003:i:1:p:99-113
    DOI: 10.1080/1461667022000028870
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    Cited by:

    1. Marco Tieghi & Rebecca L. Orelli & Emanuele Padovani, 2018. "Accounting Reform in Italian Universities. Internal Response to Accounting Change," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2018(1), pages 117-138.
    2. Syarifuddin, 2018. "Accrual Basis Landscape: The Absence of Political Will in Preventing Dysfunctional Behaviour in Indonesia," GATR Journals afr160, Global Academy of Training and Research (GATR) Enterprise.
    3. Eriotis, Nikolaos & Stamatiadis, Filippos & Vasiliou, Dimitrios, 2011. "Assessing Accrual Accounting Reform in Greek Public Hospitals: An Empirical Investigation," MPRA Paper 30246, University Library of Munich, Germany.
    4. or Aurelia STEFĂNESCUkplace-Name: & Eugeniu TURLEA & Ileana Cosmina PITULICE & Ionela- Cătălina TUDORACHE (ZAMFIR), 2016. "Research On The Romanian Public Sector Entities’ Accounting System," ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, Faculty of Economic Cybernetics, Statistics and Informatics, vol. 50(3), pages 173-191.
    5. Alessandro Lombrano, 2021. "Dall?armonizzazione alla standardizzazione contabile. Quale via per la riforma degli ordinamenti contabili europei," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2021(3), pages 7-31.
    6. Ellwood, Sheila & Greenwood, Margaret, 2016. "Accounting for heritage assets: Does measuring economic value ‘kill the cat’?," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 38(C), pages 1-13.
    7. Kathryn Trewavas & Nives Botica Redmayne & Fawzi Laswad, 2012. "The Impact of IFRS Adoption on Public Sector Financial Statements," Australian Accounting Review, CPA Australia, vol. 22(1), pages 86-102, March.
    8. Paolo Ferri & Simone Napolitano & Luca Zan, 2023. "The income gap reporting framework in public not-for-profit organizations: the British Museum case," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(4), pages 1303-1338, December.
    9. M. Rozaidy & A. K. Siti-Nabiha, 2023. "Reconstructing identity and logic through the implementation of accrual accounting in Malaysia: an intra-organisational analysis," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(1), pages 331-370, March.
    10. Chandrasiri Abeysinghe & Dinushika Samanthi, 2016. "Accrual Basis and Political Interest in Public Sector Accounting. The Case of a Municipal Council in Sri Lanka," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(3), pages 58-68, July.
    11. Biondi Yuri & Soverchia Michela, 2014. "Accounting Rules for the European Communities: A Theoretical Analysis," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 4(3), pages 1-36, December.
    12. Yue Wang & Honggen Zhu & Noshaba Aziz & Yu Liu, 2023. "Does Social Capital Improve the Effectiveness of Public Service? An Insight from Rural-to-Urban Migrants in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(2), pages 431-452, January.
    13. Stamatiadis, Filippos & Eriotis, Nikolaos, 2011. "Evolution of the Governmental Accounting Reform implementation in Greek Public Hospitals: Testing the institutional framework," MPRA Paper 28816, University Library of Munich, Germany.
    14. Sabrina Gigli & Laura Mariani & Angelo Paletta, 2021. "Management accounting and governance implications: The case of the University of Bologna," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2021(suppl. 2), pages 289-311.
    15. Cristina Silvia NISTOR & Cristina Alexandrina ȘTEFĂNESCU, 2021. "The Link Between Public Management and Accounting from the Point of View of Performance," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 2(1), pages 60-72, January.

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