Cost and management accounting in budget-funded organizations in Bosnia and Herzegovina

Abstract

This article aims to provide information on the level of application of cost and management accounting practices in the budget-funded organizations in Bosnia and Herzegovina (hereinafter B&H) and the usefulness of these practices in the performance measurement in the B&H public sector. Namely, the current budget accounting system in B&H does not provide measurement and reporting on efficiency, effectiveness, and economy of the public administration, which results in a decrease in transparency and the creation of a favourable ground for corruption. Therefore, the study was conducted among 208 budget-funded organizations by using a survey questionnaire to evaluate the current level of theoretical and practical knowledge in the field of cost and management accounting and the possibilities for their application in the budget-funded organizations in B&H to improve current budget accounting system. Research results have shown that, even though respondents are less familiar with cost and management accounting practices, they believe that the introduction of new forms of accounting (cost and management accounting) into budget accounting system in B&H would improve the quality of accounting information as a basis for decision-making of the public management. This would enable performance measurement in the B&H public sector and therefore improve transparency and accountability of the public management.