Josette Caruana

EPSAS—Worrying the Wrong End of the Stick?

The ultimate objective of the European Public Sector Accounting Standards (EPSAS) project is for the European Union (EU) to improve budgetary surveillance of its member states through more reliable statistics. The objective of this article is to analyze the EPSAS decision and discuss the efficacy of the proposed solution. Harmonization is already present through national accounting rules; will more standardization do the trick? Is the problem really being dealt with, or is it just an attempt by the EU to appear to be doing the right thing while the real issue is ignored? This article suggests that targeting governmental accounting systems for this purpose may prove futile.

Public Sector Accounting and Auditing in the United Kingdom

The Treasury dominates budgeting and accounting for the revenues, expenses, assets, liabilities and cash flows of central government. Its powers and responsibilities for central government money extend to the economy as a whole, covering fiscal and monetary policy for the UK’s currency (although the operational responsibility for this is with the central bank). The political heads of the Treasury are the Prime Minister and the Chancellor of the Exchequer.

Governmental accounting in Malta towards IPSAS within the context of the European Union

The central Government of Malta has had an accrual accounting reform in process since 1999. Originally, the accrual accounting reform envisaged developing and implementing a tailor-made set of accounting standards. These were developed but not implemented. In 2011 the central Government of Malta decided instead to fully adopt IPSAS. By means of documentary research, supported by interviews, this study tries to identify the underlying factors that led to this decision. The institutional theoretical framework is used to analyse the findings. The findings show that, in Malta, credibility is regarded as the most important factor, which will be provided by the adoption of internationally recognised and accepted standards. It is claimed that EU pressure had nothing to do with the Maltese government’s decision on accounting policy, but an undercurrent of such potential pressure is experienced. Points for practitioners One advantage of an accrual accounting system is that accrual data is generated from the accounting system, but this accrual data would still need to be reviewed in order to make it ESA-compliant. The solution proposed by the EU Commission is to revise IPSAS and minimise the differences with ESA. The feasibility of this solution is questionable given that the objectives of IPSAS and ESA are different and relate to different types of reporting. They purport to measure the same thing, that is the deficits and debts of a government, but they do not. In order for such convergence to be considered, one financial measure would have to give way to the other.

Shades of governmental financial reporting with a national accounting twist

Abstract Malta is an example of an EU member state that is implementing governmental accounting reform in anticipation of the EU requirements. The proposed outcome from the new accounting system is examined and compared with the government reporting of another EU member state that has an established accrual accounting system, namely, the UK.

The use and non-use of the government financial report by Maltese members of parliament

The purpose of this paper is to examine the use and non-use of the Government Financial Report by Maltese Members of Parliament (MPs). It refers to information overload theory to analyse the gap between financial reports and their relevance for decision making.,A mix of qualitative (interviews) and quantitative (questionnaire) research tools are applied, with the Maltese MPs being the research participants. This method is acclaimed to be comprehensive, but this study highlights certain disadvantages when applied in the political arena.,The characteristics of the information itself could be the main cause of information overload, resulting in the non-use of the financial report for decision making. Politicians refer to financial data for their decision making, but not to the data presented in the financial report. Irrespective of the politician’s professional background, the data in the financial report is perceived as incomplete and outdated.,The cause of information overload and its effects are important considerations for preparers of financial information and accounting standard setters, if they wish that their production is relevant for decision makers.,There is an increase in research concerning politicians’ use of budgetary and performance information, at local and regional levels of government. This study investigates exclusively the use of the financial report by politicians at central level, in a politically stable environment.