Exploring the New Public Management (NPM)-Based Reforms in the Public Sector Accounting

Abstract

This Chapter aims to explore the process of adopting International Public Sector Accounting Standards (IPSAS) as a New Public Management (NPM) based reform in Sri Lanka as a developing country. Based on institutional theory and resource dependence theory, framework was developed to highlight the importance of reforms and of changes in the area of public sector accounting specifically during the last three decades. It shows the extent to which Sri Lankan public sector has adopted IPSAS based accounting reforms and the limitations of adopting these standards in developing countries. This chapter argues that adopting reforms in developing countries is problematic due to limited resources and concludes that, significant changes towards adoption of IPSAS and implementing some of the reform ideas has taken place during the last decade. Relatively little is known about the NPM-based reforms in public sector accounting practices in developing countries. This is an attempt to fill this gap.