The rise and fall of accruals: a case of Nepalese central government

Abstract

PurposeThe purpose of this paper is to trace the rise and fall of accruals in the Nepalese central government, contributing to the literature on accrual accounting by looking at the developments in developing countries.Design/methodology/approachThe ideas of institutional theory have provided a theoretical setting through which to trace the country's journey toward the accrual basis of accounting. Document search and informal interviews represent the major methods of collecting data for this paper.FindingsThe paper demonstrates that Nepal has been acquainted with the notion of accrual accounting since the late 1980s. The interest of international organizations and the involvement of professional accountants have been the two main factors driving this accrual accounting journey. The study also shows that the implementation of accrual accounting in the Nepalese central government has been an unsuccessful mission. This is why the notion of accrual accounting has been replaced by the improved version of cash accounting anchored on the cash basis International Public Sector Accounting Standard (IPSAS).Research limitations/implicationsIt is beyond the scope of this paper to generalize that the trend toward accrual accounting has also reversed in other developing countries.Originality/valueThe paper contributes to the literature dealing with the role and influence of international organizations in facilitating public sector accounting reforms in developing countries. Moreover, the study argues that there has been a change in the attitude of international organizations toward exerting pressures on developing countries to carry out accrual accounting reforms. This changing attitude of international organizations has led many developing nations to focus more on improvements in their existing accounting standards and procedures.

A Review on the Country Health System, Its Challenges and the Corrective Solutions

“…The lack of specialization and expertise and clear understanding of the process and barriers to the health system, lack of commitment, lack of experience and level of education, manpower and overall low number of qualified experts and the retirement of some staff lack motivation in staff dissatisfaction with due to the heavy workload and low wages and job security (Lapointe, 2008;Adhikari & Mellemvik, 2011) leads to the exploitation of the expected benefits of the new system. Accordingly government should provide training opportunities for managers of information as well as the commitment to education should also be considered in the implementation of this system should be encouraged by all levels of government (Connolly & Hyndman, 2006;Mahdavi & Funnel, 2003) On the other hand group meetings for senior managers, middle and operational levels and to inform the staff, to motivate and positive attitude towards this system will help reduce the resistance (Bastani et al, 2012).…”

Reforma contábil do setor público na América Latina e comunidades epistêmicas: uma abordagem institucional

“…Specialized literature describes the adoption of international accounting techniques by public entities as a symbolic resource by governments looking for external legitimacy (Rahaman & Lawrence, 2001;Uddin & Hopper, 2001) or, in other cases, as an attempt to obtain resources from international agencies for implementing public reforms (Adhikari & Mellemvik, 2011). Technical ambiguities, diversity in its application, transition costs, and scarce accrual accounting by some public actors are constantly pointed by academics, practitioners and professional accountants as restraints for IPSAS implementation (Caperchione, Salvatori & Benghi, 2014).…”

Evaluating the Implementation of a Mandatory Dual Reporting System: The Case of Indonesian Local Government

“…). One notable exception is the study conducted by Adhikari and Mellemvik (), discussed above, who find that the adoption of accrual accounting in the Nepalese public sector was a complete failure. This 2011 study may possibly be the only exploratory study to date on the implementation of accrual accounting and its outcomes in the developing economy context except for some sporadic Indonesian studies.…”

“…Similarly, Gårseth‐Nesbakk () observe that accrual accounting created ambiguity at the Norwegian government level and call for further thinking and alternative accounting solutions in the public sector. Adhikari and Mellemvik () find that accrual accounting adoption in Nepal failed completely and as a result the system was replaced by an improved version of cash accounting.…”

“…Most published studies on the reform of public sector accounting systems focus on the implementation of full accrual systems in the public sectors of developed economies (Goddard 2010;Mir and Rahaman 2007;Timoshenko and Adhikari 2010;Tooley et al 2010). One notable exception is the study conducted by Adhikari and Mellemvik (2011), discussed above, who find that the adoption of accrual accounting in the Nepalese public sector was a complete failure. This 2011 study may possibly be the only exploratory study to date on the implementation of accrual accounting and its outcomes in the developing economy context except for some sporadic Indonesian studies.…”