Perception of the Malaysian Federal Government accountants of the usefulness of financial information under an accrual accounting system: a preliminary assessment

Abstract

Purpose The objective of this study is to examine the perceived usefulness of accrual accounting-based financial information for accountability and for supporting decision-making in public sector organisations. Design/methodology/approach A questionnaire survey adapted from Kober et al. (2010) was used to survey Malaysian Federal Government accountants to ascertain their views on the usefulness of accrual accounting information across 12 situations regarding accountability and decision-making. Mean scores and mean score ranking were computed on a total of 165 usable responses received. The independent t-test was conducted to investigate the differences in the perception between “accountants with” and the “accountants without” prior work experience in the private sector. Findings The study provides evidence that Malaysian Federal Government accountants consider accrual accounting information as very useful for decision-making. The three most important decision-usefulness indicators in the survey are “To assist in managing the department’s assets and liabilities”, “To assess cash flow needs of a department” and “For departmental resource allocation decisions”. The least useful accrual accounting information as perceived by the Malaysian public sector accountants is “To assist in discharging the department’s accountability obligations”. Originality/value The study provides valuable insights into the extent to which accrual accounting information is considered useful for accountability and decision-making, lending support to the Malaysian Government’s reform agenda of moving towards using accrual accounting in public sector organisations at the federal level.