The Development of EPSAS: Contributions from the Literature

Abstract

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.

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

“…As a reaction to these developments, there is an ongoing process at the European Union level to develop compulsory European Public Sector Accounting Standards (EPSAS), which are based to a large extent on IPSAS (see e.g. Caruana et al, 2019;Oulasvirta & Bailey, 2016;Polzer & Reichard, 2020), for all member states.…”

“…The European Public Sector Accounting Standards (EPSAS) are a project of Eurostat, the statistical office of the European Union (Polzer & Reichard, 2020) and are expected to become another potential "competing" set of standards in the future. The development of EPSAS has made progress over recent years (for more details, see Caruana et al, 2019;Polzer & Reichard, 2020). The EPSAS are supposed to be implemented on a mandatory basis and differ in this regard from the IPSAS.…”

The impact of public–private partnerships on public accounts: The Portuguese roads sector

“…Fifth, it adds to the literatures that discusses the high level of divergence between the national accounts impact and the IPSAS 32‐simulated impact. It is thus another piece of stimulation to the debate between the relevant stakeholders (e.g., standard setters, statistical community) regarding the convergence of different frameworks for measuring and reporting economic reality (Caruana et al., 2019; Dabbicco, 2018). Policy implications should be highlighted such as the promotion of the harmonisation between national accounts and the international standards‐based accrual accounting system for PPPs.…”

“…Overall, our paper is relevant to other jurisdictions by showing evidence of off‐balance sheet financing through PPPs in a country that has current public sector accounting practices which are not convergent with international public sector accounting standards. It contributes to the discussion regarding the different treatment of certain transactions according to IPSAS and national accounts requirements (Caruana, Dabbicco, Jorge, & Jesus, 2019; Dabbicco, 2018). At the macro level there is an ongoing discussion about the role of whole of government accounts (WGA) as a macro surveillance tool (Bracci, Humphrey, Moll, & Steccolini, 2015) and the paper also contributes to this literature by showing the role of accrual accounting as a macroeconomic control tool hand in hand with national accounts by the analysis of PPPs contracts at the light of IPSAS and national accounts rules.…”

IPSAS for European Union member states as starting points for EPSAS

“…There can be, however, several ways pursued to harmonize government accounting across different EU member states: First, the scope of harmonization can be limited to such data directly needed for compiling the national accounts for statistics (i.e. within the scope of the European Systems of Accounts [ESA] [Caruana et al, 2019]). Second, harmonization can cover the entire financial reporting.…”