Impact of IPSAS on Reforming Governmental Financial Information Systems: A Comparative Study

The diversity in reformed governmental financial information systems created a need for harmonized international accounting standards, resulting in the elaboration of the IPSAS (International Public Sector Accounting Standards). By means of a survey to experts this study examines the extent to which governments in Europe adopt IPSAS-inspired accrual accounting and how the differing levels of adoption can be explained.<br><br>The study reveals diversity in the adoption process of IPSAS-inspired accrual accounting. Some governments still account cash based. Only a minority apply IPSASs. The majority of local and central governments apply accrual accounting disregarding IPSASs.<br><br>The trend toward accrual accounting can be explained by the need for transparency, efficiency and performance management. The fact that the IPSAS are unique and offer specific know-how is the main argument to make use of them. A number of jurisdictions do not adopt IPSASs because they transfer their own local business accounting rules.