The importance and challenges of the implementation of IPSAS accrual basis to the public sector: The case of Kosovo

Ahmet Ismaili,Nexhmie Berisha Vokshi,Hysen Ismajli

doi:10.5267/j.ac.2021.2.028

Abstract

This paper aims to determine the importance and challenges of the reform and transition towards the International Public Sector Accounting Standards’ (IPSASs’) accrual accounting and its implementation in the public sector in Kosovo. A survey obtained primary data from a considerable representative sample of officials from budget organizations and institutions and members of publicly owned enterprises (POEs) and professional societies. The study analyzed the collected data using descriptive statistics, correlation and the Chi-Square and Kruskal–Wallis H tests. The reform contributes significantly to a better decision-making process and the use of public funds. It reflects the true long-term implications of policy decisions and therefore helps governments demonstrate accountability in the use of public funds. Despite the identified challenges, the study justifies the suggested reform in Kosovo. The findings emphasize its importance for improving accountability, transparency and financial management and building public confidence in information and the country’s macro-fiscal sustainability position.

Highlights

IntroductionThere is a need for a common economic language so that stakeholders around the world can communicate with each other
Because of increasing globalization, there is a need for a common economic language so that stakeholders around the world can communicate with each other
On the other hand, such financial statements can be considered as an opportunity to prepare and publish quality management information for better decision making by contributing to better public service performance and sustainable public finances as a strategic objective

Summary

Introduction

There is a need for a common economic language so that stakeholders around the world can communicate with each other. Governments need to prepare and publish highquality and transparent financial statements that are reliable and internationally recognized by using the IPSASs or equivalent standards. This is a key feature of democratic responsibility, accountability and reliability towards the public. On the other hand, such financial statements can be considered as an opportunity to prepare and publish quality management information for better decision making by contributing to better public service performance and sustainable public finances as a strategic objective. The recognition of the importance of accrual accounting and public sector financial management has been growing as a key means of achieving sustainable public finances. It is understood that the Republic of Kosovo is interested in gradually moving towards accrual accounting in the public sector (budgetary institutions), realizing that this is the model of best practice adopted in European countries and beyond (Berger, 2012)

Objectives

Results

Conclusion