Explaining the pattern of financial reporting challenges of the country's public sector
Subject Areas :Reza Sotudeh 1 , Aref Khoshroo Moini 2
1 - Assistant Professor, Department of Accounting, Nikshahr Branch, Islamic Azad University, Nikshahr, Iran
2 - PhD student ,Department of Accounting, Zahedan Branch, Islamic Azad university, Zahedan, Iran.
Keywords: Challenge of reporting, public section, reporting quality,
Abstract :
Purpose: Purpose: In the last three decades, major changes in public management and especially the establishment of accrual accounting have been characteristic of the public sector of many countries. The financial system of the public sector of Iran is also in the process of implementation of these developments, according to the available evidence, that the accounting standards of the public sector are not fully and properly applied, the purpose of this study is to examine the challenges of public sector financial reporting in the country.
Methodology: The current research is conducted qualitatively. The statistical population of this research includes university accounting professors and executive managers of government organizations and auditors of government organizations.
Findings: By using library studies as well as semi-structured interviews and receiving experts' opinions, concepts related to the challenges of financial reporting in the country's public sector were extracted. Based on the results, 12 main challenges affecting public sector financial reporting were identified. The experts confirmed the extracted components based on Delphi-fuzzy logistic type 3 approaches with Shaffer input function 4. The input function based on hybrid sine and cosine works more efficiently to cover uncertainty in expert responses. By using the principal component analysis approach, it was concluded that the challenges of the accounting system, economic factors and human resources are respectively the most important challenges affecting the quality of reporting in the country's public sector.
Originality: The lack of modern, integrated and compatible accounting systems with the executive process of government activities is the most important factor affecting the quality of financial reporting in the public sector of the country.
اسماعیلی کیا، غریبه، و نادعلی نژاد، سودابه. (1402). فعالیت‌های مدیریت دارایی‌ها در نهادهای بخش عمومی: بررسی وضعیت فعلی و عوامل زمینه‌ای مؤثر بر بهبود آن‌ها. حسابداری دولتی، 9(2)، 211-228. doi: 10.30473/GAA.2023.66854.1642
اسماعیلی کیا، ﻏﺮﯾﺒﻪ؛ ﻣﻼﻧﻈﺮي، ﻣﻬﻨﺎز. (1395). ﺑﺮرسی ﺿﺮورت ﺗﺤﻮل در ﻧﻈﺎم پاسخگویی مالی و عملیاتی دانشگاه‌های دولتی اﯾﺮان و شناسایی اﺑﻌﺎد آن از دیدگاه خبرگان و دانشگاهیان. پژوﻫﺶﻫﺎي تجربی ﺣﺴﺎﺑﺪاري، (6)1،53-80. doi: 10.22051/jera.2016.2160
باباجانی، جعفر. (1384). گزارشکری مالی نوین در بخش عمومی، فصلنامه دانش حسابرسی، 17(18)، 14-39. https://www.sid.ir/paper/472855/fa
رستمی زینب، و مستشارنژاد الهه. (1403). حسابداری دارایی‌های بخش عمومی و پیامدهای توانایی خدمات: بررسی چالش‌های مرتبط، حسابداری و بودجه ریزی بخش عمومی، 1(5). doi: 10.22034/psab.2024.194870
رعنایی، علیرضا. (1402). تحلیل چالش‌های موجود در حسابداری دولتی، نهمین کنفرانس ملی یافته‌های نوین علوم و تکنولوژی با محوریت کامپیوتر، مدیریت و حسابداری، تهران. https://civilica.com/doc/1751733
محمدی، علی، محمدزاده سالطه، حیدر، دیانتی دیلمی، زهرا، و اقدم مزرعه، یعقوب. (1398). ارائه مدل تبیین‌کننده چالش‌های کیفیت گزارشگری مالی در بخش عمومی: با استفاده از رویکرد زمینه بنیان. مطالعات تجربی حسابداری مالی، 16(63)، 27-51. doi: 10.22054/qjma.2019.10644
مهدوی، احمد، ذبیحی، علی، و پورآقاجان، عباسعلی. (1402). ارزیابی زمینه‌های چالش برانگیز پیاده‌سازی حسابداری تعهدی در بخش عمومی. مطالعات تجربی حسابداری مالی، 20(79)، 245-282. doi: 10.22054/qjma.2023.75600.2491
Bjurstrøm, K. H. (2020). Principal–agent or principal–steward: how ministry–agency relations condition the impact of performance management in the steering of government agencies. Public Performance & Management Review, 43(5), 1053-1077. doi: 10.1080/15309576.2020.1739087
Batley, R.; Larbi, G. The Changing Role of Government: The Reform of Public Services in Developing Countries; Springer: New York, NY, USA, 2004.
Caers, R.; Du Bois, C.; Jegers, M.; De Gieter, S.; Schepers, C.; Pepermans, R. Principal-Agent Relationships on the Stewardship-Agency Axis. Nonprofit Manag. Leadersh. 2006, 17, 25–47. doi: 10.1002/nml.129
Chan, J. L. (2006). IPSAS and government accounting reform in developing countries. Accounting reform in the public sector: mimicry, fad or necessity, 31-42.
Calabrò, A., Torchia, M., & Ranalli, F. (2013). Ownership and control in local public utilities: the Italian case. Journal of Management & Governance, 17, 835-862. doi: 10.1007/s10997-011-9206-1
Cuadrado-Ballesteros, B., & Bisogno, M. (2021). Public sector accounting reforms and the quality of governance. Public Money & Management, 41(2). doi: 10.1080/09540962.2020.1724665
Chan, J. L. (2003). Government accounting: an assessment of theory, purposes and standards. Public Money & Management, 23(1), 13-20. doi: 10.1111/1467-9302.00336
Dabbicco, G., & Mattei, G. (2021). The reconciliation of budgeting with financial reporting: A comparative study of Italy and the UK. Public Money & Management, 41(2). doi: 10.1080/09540962.2019.1708059
Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management review, 22(1), 20-47. doi: 10.5465/amr.1997.9707180258
Ehalaiye, D., Botica Redmayne, N., & Laswad, F. (2021). Does accounting information contribute to a better understanding of public assets management? The case of local government infrastructural assets. Public Money & Management, 41(2). doi: 10.1080/09540962.2020.1719669
Esmaili Kia, G., & Nad Alinejad, S. (2023). Asset management activities in public sector institutions: examining the current situation and contextual factors affecting their improvement. Government Accounting, 9(2), 211-228. doi: 10.30473/gaa.2023.66854.1642 [In Persian]
Esmaili Kia, G., & Molanazari, M. (2016). Investigating the necessity of transformation in the financial and operational accountability system of Iran's public universities and identifying its dimensions from the point of view of experts and academics. Experimental Accounting Research, 6(1), 53-80. doi: 10.30473/gaa.2023.66854.1642 [In Persian]
GASB. (1993). Codification of Accounting and financial reporting standards statement of principle, Accounting and reporting copability.
Gnan, L., Hinna, A., Monteduro, F., & Scarozza, D. (2011). SOEs ownership and control: independence and competence of boards members. Corporate Ownership & Control, 8(1), 720-739. doi: 10.22495/cocv8i1c7p6
Hinna, A., De Nito, E., & Mangia, G. (2010). Board of directors within public organisations: A literature review. International Journal of Business Governance and Ethics, 5(3), 131-156. doi.org/10.1504/IJBGE.2010.033343
Jovanović, T., & Vašiček, V. (2021). The role and application of accounting and budgeting information in government financial management process—a qualitative study in Slovenia. Public Money & Management, 41(2). doi: 10.1080/09540962.2020.1724405
Keay, A. (2017). Stewardship theory: is board accountability necessary?. International Journal of Law and Management, 59(6), 1292-1314. doi: 10.1108/IJLMA-11-2016-0118
Kyere, M., & Ausloos, M. (2021). Corporate governance and firms financial performance in the United Kingdom. International Journal of Finance & Economics, 26(2), 1871-1885. doi: 10.1002/ijfe.1883
Lane, J.E. Public Administration and Public Management: The Principal-Agent Perspective; Taylor & Francis: New York, NY, USA, 2005.
Mahdavi, A., Zabihi, A., & Pour Aghajan, A. (2023). Assessing the challenging areas of accrual accounting implementation in the public sector. Financial Accounting Empirical Studies, 20(79), 245-282. doi: 10.22054/qjma.2023.75600.2491 [In Persian]
Mauro, S. G. (2019). Public sector performance-based budgeting in Italy. Performance-Based Budgeting in the Public Sector, 125-140. doi: 10.1007/978-3-030-02077-4_6
Mohammadi, A., Mohammadzadeh Saltah, H., Dayanti Deilmi, Z., & Eghdam Mazrae, Y. (2019). Presenting a model explaining the quality challenges of financial reporting in the public sector: using the context-based approach. Empirical Studies of Financial Accounting, 16(63), 27-51. doi: 10.22054/qjma.2019.10644 [In Persian]
Nicolo, G., Zanellato, G., Manes-Rossi, F., & Tiron-Tudor, A. (2021). Corporate reporting metamorphosis: empirical findings from state-owned enterprises. Public Money & Management, 41(2). doi: 10.1080/09540962.2020.1719633
PWC. (2012). Adoption of IPSAS in Ghana -prospects, challenges and the forward, http: //www. pwc. com/en_GH/gh/pdf/adoption-of-ipsas.pdf.
Ranaei, A. (2023). Analysis of existing challenges in government accounting, 9th National Conference on New Science and Technology Findings focusing on Computer, Management and Accounting, Tehran. https://civilica.com/doc/1751733 [In Persian]
Rostami Z., & Mishteranjad, E. (2024). Public Sector Asset Accounting and Service Ability Consequences: Examining Related Challenges. Public Sector Accounting and Budgeting, 1(5). doi: 10.22034/psab.2024.194870 [In Persian]
Roje, G., & Botica Redmayne, N. (2021). On the management and financial reporting for state assets—a comparative analysis between Croatia and New Zealand. Public Money & Management, 41(2). doi: 10.1080/09540962.2020.1723261
Schillemans, T. (2013). Moving beyond the clash of interests: On stewardship theory and the relationships between central government departments and public agencies. Public management review, 15(4), 541-562. doi: 10.1080/14719037.2012.691008
Shawtari, F. A., Har Sani Mohamad, M., Abdul Rashid, H. M., & Ayedh, A. M. D. (2017). Board characteristics and real performance in Malaysian state-owned enterprises (SOEs). International Journal of Productivity and Performance Management, 66(8), 1064-1086. doi: 10.1108/IJPPM-12-2015-0188
Schillemans, T., & Bjurstrøm, K. H. (2020). Trust and verification: Balancing agency and stewardship theory in the governance of agencies. International Public Management Journal, 23(5), 650-676. doi: 10.1080/10967494.2018.1553807
Tiron Tudor, A., & Mutiu, A. (1990). Cash versus accrual accounting in public sector. Studia Universitatis Babes Bolyai Oeconomica. Available at SSRN: https://ssrn.com/abstract=906813
Van Slyke, D. M. (2007). Agents or stewards: Using theory to understand the government-nonprofit social service contracting relationship. Journal of public administration research and theory, 17(2), 157-187. https://www.jstor.org/stable/4139740
Wason, V., Goel, P., & Gupta, S. K. (2024). Quality Of Financial Reporting Of Central Public Sector Enterprises In India: A Case Study Of India Infrastructure Finance Company Limited. Educational Administration: Theory and Practice, 30(4), 6710-6719. doi: 10.53555/kuey.v30i4.2466.