The central Government of Malta has had an accrual accounting reform in process since 1999. Originally, the accrual accounting reform envisaged developing and implementing a tailor-made set of accounting standards. These were developed but not implemented. In 2011 the central Government of Malta decided instead to fully adopt IPSAS. By means of documentary research, supported by interviews, this study tries to identify the underlying factors that led to this decision. The institutional theoretical framework is used to analyse the findings. The findings show that, in Malta, credibility is regarded as the most important factor, which will be provided by the adoption of internationally recognised and accepted standards. It is claimed that EU pressure had nothing to do with the Maltese government's decision on accounting policy, but an undercurrent of such potential pressure is experienced. Points for practitionersOne advantage of an accrual accounting system is that accrual data is generated from the accounting system, but this accrual data would still need to be reviewed in order to make it ESA-compliant. The solution proposed by the EU Commission is to revise IPSAS and minimise the differences with ESA. The feasibility of this solution is questionable given that the objectives of IPSAS and ESA are different and relate to different types of reporting. They purport to measure the same thing, that is the deficits and debts of a government, but they do not. In order for such convergence to be considered, one financial measure would have to give way to the other.
Purpose The purpose of this paper is to examine the use and non-use of the Government Financial Report by Maltese Members of Parliament (MPs). It refers to information overload theory to analyse the gap between financial reports and their relevance for decision making. Design/methodology/approach A mix of qualitative (interviews) and quantitative (questionnaire) research tools are applied, with the Maltese MPs being the research participants. This method is acclaimed to be comprehensive, but this study highlights certain disadvantages when applied in the political arena. Findings The characteristics of the information itself could be the main cause of information overload, resulting in the non-use of the financial report for decision making. Politicians refer to financial data for their decision making, but not to the data presented in the financial report. Irrespective of the politician’s professional background, the data in the financial report is perceived as incomplete and outdated. Practical implications The cause of information overload and its effects are important considerations for preparers of financial information and accounting standard setters, if they wish that their production is relevant for decision makers. Originality/value There is an increase in research concerning politicians’ use of budgetary and performance information, at local and regional levels of government. This study investigates exclusively the use of the financial report by politicians at central level, in a politically stable environment.
EPSAS are being considered in the EU context where a need for harmonisation in Governmental Accounting (GA) has been recognised as important to increase the reliability of sources of information to the National Accounts (NA) figures.However, GA and NA are two different and parallel reporting systems at national level, even if, within the European context, EPSAS intend to contribute for their convergence.The relationship between GA and NA has been recurrently addressed in the literature over the last two decades, with professionals being more proactive while academics have been more reactive in the debate. Several issues have been raised. This paper recaptures and revises these issues, synthesising academic and practitioner literature, archival documents and reports of EU working groups, from 1996 to 2018.The analysis highlights the more controversial areas, and those that seemed already settled but yet are now, within the context of EPSAS development, being raised again. Specifically, the paper calls attention to (1) the need to manage between two different conceptual frameworks of GA and NA; (2) the importance of interdisciplinary collaboration between the professionals involved, namely accountants, public administrators and statisticians; (3) the role of budgetary accounting and the alignment required between reporting in GA and NA, reducing and harmonising adjustments to be made when translating data from one into the other; and (4) the need to address auditing issues, as EPSAS on their own may not be enough to ensure reliability of the information reported.
The ultimate objective of the European Public Sector Accounting Standards (EPSAS) project is for the European Union (EU) to improve budgetary surveillance of its member states through more reliable statistics. The objective of this article is to analyze the EPSAS decision and discuss the efficacy of the proposed solution. Harmonization is already present through national accounting rules; will more standardization do the trick? Is the problem really being dealt with, or is it just an attempt by the EU to appear to be doing the right thing while the real issue is ignored? This article suggests that targeting governmental accounting systems for this purpose may prove futile.
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