Reservations about governments producing balance sheets
By: CONN, Neil
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Material type: 
ArticlePublisher: Oxford : Blackwell Publishers Limited, March 1996Australian Journal of Public Administration 55, 1, p. 82-85Abstract: There are, in my view, exaggerated expectations of the benefits to flow from the widespread adoption of accrual accounting by general government agencies. These benefits are said to include:more accurate measurement of costs and revenues; a greater focus on outputs rather than inputs; a more efficient and effective use of scarce resources; a better indication of the sustainability of government policy;improved accountability by governments to their constituents; better financial management by public service managers; greater comparability of management performance between jurisdictions; and a complete coverage of all relevant transactions and stocks. In theory, this breathtaking range of achievements is expected to flow from a simple change in the timing of recording of trasactions, from the point at which cash changes hands to the point at which an event accurs which eventually leads to cash changing hands. (More is said on this simplifying proposition later, under the heading 'The narrow issue'). In reality, the term 'accrual accounting' has become code for a much wider-ranging set of changes, and this brief paper comments sceptically on a number of them
There are, in my view, exaggerated expectations of the benefits to flow from the widespread adoption of accrual accounting by general government agencies. These benefits are said to include:more accurate measurement of costs and revenues; a greater focus on outputs rather than inputs; a more efficient and effective use of scarce resources; a better indication of the sustainability of government policy;improved accountability by governments to their constituents; better financial management by public service managers; greater comparability of management performance between jurisdictions; and a complete coverage of all relevant transactions and stocks. In theory, this breathtaking range of achievements is expected to flow from a simple change in the timing of recording of trasactions, from the point at which cash changes hands to the point at which an event accurs which eventually leads to cash changing hands. (More is said on this simplifying proposition later, under the heading 'The narrow issue'). In reality, the term 'accrual accounting' has become code for a much wider-ranging set of changes, and this brief paper comments sceptically on a number of them
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