Cultural and language impact on the level of readiness to adopt IPSAS : the case of Malta

Abstract

Purpose: This study aims to examine the relationship between accounting language and accounting culture within a work environment, and their effect on the readiness of an organization to adopt IPSAS. Design: A mixed method approach has been deemed appropriate for this study. A questionnaire has been electronically distributed across all Government accounting departments and the results quantitatively analysed through IBM SPSS Statistics™ software. Furthermore, ten semi-structured interviews have been conducted: four with directors of accounting departments within Ministries and one with high ranking officials of accounting departments at the OPM, Treasury Department, NAO, AFM, Malta Police Force and the House of Representatives. Findings: Research shows that culture and language are determinants in the adoption of IPSAS by departments at the Maltese Central Government. It results that public sector employees working in accounting departments are not prepared for the introduction of IPSAS, at the time of the research. Nonetheless, this does not mean that such employees are unwilling to learn, but are rather intimidated by this change. Culture factors have exposed bureaucracy, lack of accounting education and cultural shock; the accounting revolution is perceived as something extraneous and no adequate IPSAS training has yet been provided by the Treasury. Interviewed directors have a general understanding of both accrual accounting language expressed in the English language and also of the potential benefits to be reaped from IPSAS. Yet, enhanced understanding and appreciation of accrual accounting language and advantages are still missing. Conclusion: Given the matter of urgency due to deadlines imposed in configuring the new system, the study concludes that the Government should immediately provide adequate training to public sector accounting employees, in order to prepare them both technically and mentally for such a major accounting revolution. Moreover, cultural change is expected to result over time. Value: This study attempts to determine the level of preparedness of public sector accounting employees, in terms of accounting culture and language. It is desired that through the possible improvements unveiled, the Government furnishes its employees with the right training and mind-set, to enable the production of a truer and fairer view of Government financial statements for their users.