Towards accounting harmonization in Europe: a multinational survey among budget experts
| Author | Markus Frintrup,Dennis Hilgers,Lisa Schmidthuber |
| Published date | 01 June 2022 |
| DOI | 10.1177/0020852320915640 |
| Date | 01 June 2022 |
| Subject Matter | Articles |
Article
Towards accounting
harmonization in Europe:
a multinational survey
among budget experts
Markus Frintrup
Johannes Kepler University Linz, Austria
Lisa Schmidthuber
Johannes Kepler University Linz, Austria
Dennis Hilgers
Johannes Kepler University Linz, Austria
Abstract
Severe fiscal problems, the insufficient comparability of financial information and
increasing demands for better accountability require national governments and inter-
national organizations to change their current accounting regimes and to move towards
a system of standardized accounting practices. As the International Public Sector
Accounting Standards have insufficiently moved Europe towards accounting harmoni-
zation in recent years, the European Commission currently aims to suggest the adop-
tion of European Public Sector Accounting Standards. Based on a multinational survey
among budget experts, the current article investigates budget experts’ perceptions
towards adopting the European Public Sector Accounting Standards. The findings com-
pare attitudes towards new accounting practices and European Public Sector
Accounting Standards reform expectations on a comparative basis, and relate them
to the current national accounting system and contextual factors. Empirical results
indicate great variation in terms of European Public Sector Accounting Standards
reform expectations across countries. The study concludes with discussing the impli-
cations of the findings for international accounting research, accounting harmonization
and the development of a European accounting system.
Corresponding author:
Markus Frintrup, Johannes Kepler University Linz, Altenberger Straße 69 4040, Austria.
Email: markus.frintrup@gmx.de
International Review of Administrative
Sciences
!The Author(s) 2020
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DOI: 10.1177/0020852320915640
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2022, Vol. 88(2) 390–410
International
Review of
Administrative
Sciences
Points for practitioners
In this early stage of European Public Sector Accounting Standards development, under-
standing the factors associated with a country’s decision to adopt them could be helpful
for practitioners and professionals. The current study identifies information technology
costs as a potential barrier to implementing the European Public Sector Accounting
Standards. Politicians and standard setters might take this into account while developing
the European Public Sector Accounting Standards. Furthermore, this article reveals that
encouraging the voluntary introduction of accrual accounting in the first stage of
European Public Sector Accounting Standards development might be the appropriate
approach of the European Commission.
Keywords
accounting harmonization, accounting innovation, accounting reform, European Public
Sector Accounting Standards, international accounting practices
Introduction
Government and accounting systems have been changing significantly during
recent decades (Manes-Rossi et al., 2016b). In line with the New Public
Management (NPM) paradigm and economic rationalities (Nistor and
Deaconu, 2016), financial information systems have been aligned towards an
enhanced level of accountability and transparency (Brusca et al., 2018;
Christiaens et al., 2015). These accounting innovation efforts are associated
with the implementation of accrual accounting at the expense of cash accounting
in the public sector (Deaconu et al., 2011). Accrual accounting is expected to
increase the transparency of financial information and intergenerational equity
(Burth and Hilgers, 2014), as well as enhance cost efficiency (Lampe et al., 2015).
An increase in transparency, in turn, induces a reduction in the corruption and
opportunistic behavior of politicians (Cuadrado-Ballesteros et al., 2019).
Although an increasing number of countries in Europe and worldwide apply
accrual or at least modified accrual accounting at the governmental level
(OECD, 2017), and recent studies predict an even more rapid increase of accrual
accounting application (IFAC and CIPFA, 2019), some European countries still
apply cash accounting or at least modified cash accounting (Brusca et al., 2015),
and national accounting practices and norms still differ among countries (Pina
et al., 2009).
Due to this lack of accounting harmonization and the presence of urgent
financial problems, the European Commission (EC) implemented a project to har-
monize public sector accounting in 2013 (EC, 2013; Manes-Rossi et al., 2016a).
The introduction of the European Public Sector Accounting Standards (EPSAS)
should pave the way to European accounting harmonization (Mann et al., 2019;
391
Frintrup et al.
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