The implications of implementing accrual accounting in government

Abstract

This dissertation examines users' perceptions of the accrual accounting and reporting system being adopted in the Maltese Government. It observes whether the implementation of accrual accounting will aid a selection of the Malta Government Financial Report users to better take decisions. The users identified have been those found in the Malta Government Accounting Standards. The study shows that there exists a gap between users identified in the Malta Government Accounting Standards and the factual users of the Financial Report. A survey conducted on a sample of these users reveals that the cash based financial report does not seem to be relevant for decision-making purposes, while most users agree that the proposed accrual accounting system will revolutionize the information Government discloses. Notwithstanding this, the study shows that, in Malta's case, the implementation of accrual accounting has not been motivated to improve external financial reporting by government but rather to introduce new financial management concepts. This shows that the financial report, as yet, does not seem to play the role of a general purpose external report. It rather seems to be prepared to comply with law requirements and serve as an accountability medium.