Public Financial Management Reforms: The Role of Ipsas in Latin‐America
| Author | Mauricio Gómez‐villegas,Isabel Brusca,Vicente Montesinos |
| DOI | http://doi.org/10.1002/pad.1747 |
| Published date | 01 February 2016 |
| Date | 01 February 2016 |
PUBLIC FINANCIAL MANAGEMENT REFORMS: THE ROLE OF IPSAS IN
LATIN-AMERICA
ISABEL BRUSCA
1
*, MAURICIO GÓMEZ-VILLEGAS
2
AND VICENTE MONTESINOS
3
1
University of Zaragoza, Spain
2
National University of Colombia, Colombia
3
University of Valencia, Spain
SUMMARY
During the last 30 years, many public administration reforms promoted by New Public Management have been undertaken.
These reforms have spread to Latin-American countries and include changes in governmental accounting systems, where the
implementation of International Public Sector Accounting Standards (IPSASs) has been a stimulus for modernization. This
article aims to clarify the situation of IPSASs implementation in the Latin-American context as well as the stimuli for and effects
of their implementation. The analysis shows that there is an emerging international trend to adopt IPSASs in Latin-American
countries although at the same time, there are evident obstacles to achieving reform goals. In Colombia, reforms are still
underway, and the usefulness of IPSASs to improve decision-making at an organisational level cannot be evaluated. Meanwhile,
in Peru, the modernization is more rhetorical than real, and many efforts remain to be made for the effective implementation.
Copyright © 2016 John Wiley & Sons, Ltd.
key words—governmental accounting reforms; financial management reforms; IPSASs; accounting harmonisation; adaptation
to IPSASs
INTRODUCTION
The introduction of the accrual basis in government accounting systems is one of the initial and perhaps deter-
mining steps in the reform of public financial management (Ball and Pflugrath, 2012). It is argued that the change
from cash accounting to accrual has positive impacts on accountability and public decision-making (Lüder and
Jones, 2003; PwC, 2013), enhancing administrative efficiency, effectiveness and economy in accordance with
New Public Management (NPM) (Hood, 1995; Caperchione, 2006; Lapsley, 2009). Nevertheless, this trend
has its critics (Chan, 2003; Benito et al., 2007; Ellwood and Newberry, 2006, 2007; Robb and Newberry,
2007; Arnaboldi and Lapsley, 2009; Lapsley et al., 2009; Biondi, 2012; Wynne, 2012; Oulasvirta, 2013).
In this context, International Public Sector Accounting Standards (IPSASs) are becoming the international
benchmark for accrual-based government financial information (Ernst and Young, 2011), as noted in the European
Commission (EC) report (2013b) on the suitability of IPSASs for European Union (EU) Member States. One
option that countries can choose is first to implement the cash basis IPSAS and then to develop a route for the
transition to accrual accounting (Hughes, 2013), as recommended by the International Consortiumon Governmental
Financial Management (ICGFM, 2013) and the International Monetary Fund (IMF) (2011)for developing countries.
In Latin America, various public administration reforms are currently under way, including IPSASs adoption.
However, there are few studies and little information on their achievements and progress (Caba and López,
2003, 2007; Torres, 2004; Navarro and Rodríguez, 2007, 2011; Araya et al., 2011a, 2011b; Gómez and
Montesinos, 2012). This lack of evidence on the progress of the reforms justifies the study and critical assessment
of the situation in Latin America.
*Correspondence to: I. Brusca, Facultad de Economía y Empresa, University of Zaragoza, Gran Vía, n° 2, 50005-Zaragoza, Spain.
E-mail: ibrusca@unizar.es
public administration and development
Public Admin. Dev. 36,51–64 (2016)
Published online in Wiley Online Library
(wileyonlinelibrary.com) DOI: 10.1002/pad.1747
Copyright © 2016 John Wiley & Sons, Ltd.
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