Public accounting history in post-communist Romania

Cristina Silvia Nistor,Adela Deaconu

doi:10.1080/1331677x.2016.1193945

Cristina Silvia Nistor, Adela Deaconu

Open Access

https://doi.org/10.1080/1331677x.2016.1193945

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Abstract

Having a longitudinal approach of the Romanian public accounting system’s evolution, this historical study proposes the development of a framework in order to assess in a descriptive manner the change of public accounting and its implications for Romania, a European emerging country. The evolution from cash accounting to accrual accounting took place during three time periods within the timeframe 1991–2015. For each of these time periods we investigated influential factors such as period, place, people, practices, propagation, products, and profession. The study shows that under the influence of the international managerial public reform and the internal factors analysed, the public accounting system shifts from the old values of the post-communist period to new reference bases such as International Public Sector Accounting Standards (IPSAS). The results of the study place Romania, an East European country, on the map of international public sector accounting systems as a relatively new arrival but with serious intentions of integration.

Highlights

Around the world, the public sector follows the management rules of private organisations as the services provided by the public sector are based on the investment theory (e.g., Haavelmo, 1960)
The remainder of the paper is organised as follows: Section 2 provides a literature review considering the role of accrual accounting within the public sector reform in the world and in Romania; Section 3 presents the framework of the study and its application for the case of Romanian public accounting evolution; the final section discusses the accrual accounting benefit for the emerging studied context and concludes
European and global economic life shows that public institutions are significant players, at least for the following reasons (Lequiller, 2012): governments are major participants in capital markets globally; the fiscal accountability of governments is significant for enhancing economic growth and development worldwide; governments and other public sector entities raise resources from taxpayers, donors, lenders and other resource providers to provide services to citizens and other service recipients; data generated by government accounting is used as a basis for the preparation of Government Financial Statistics; money raised through taxation is allocated to spending, for the benefit of the country and its citizens

Summary

Introduction

Around the world, the public sector follows the management rules of private organisations as the services provided by the public sector are based on the investment theory (e.g., Haavelmo, 1960). Dorotinsky (2008) states that these countries should be very well-informed, should resort to international guidance, and should know their national characteristics and economic limits Taking into account these facts, the present study may be categorised as a historical paper, as it addresses issues related to the Romanian public accounting evolution in its environment and the forces affecting this development. The remainder of the paper is organised as follows: Section 2 provides a literature review considering the role of accrual accounting within the public sector reform in the world and in Romania; Section 3 presents the framework of the study and its application for the case of Romanian public accounting evolution; the final section discusses the accrual accounting benefit for the emerging studied context and concludes

The public sector reform in the international context

Debates regarding cash-based and accrual-based public accounting systems

The public sector reform in Romania – an Eastern European country

The framework and the history of Romanian public accounting

Conclusions