The magic of IPSAS accrual: the real without reality

• DOI: https://doi.org/10.1108/IJPSM-10-2021-0238
• Published date: 20 June 2022
• Date: 20 June 2022
• Pages: 692-706
• Subject Matter: Public policy & environmental management,Politics,Public adminstration & management
• Author: Tausi Ally Mkasiwa

The magic of IPSAS accrual:

the real without reality

Tausi Ally Mkasiwa

The Institute of Finance Management, Dar es Salaam, United Republic of Tanzania

Abstract

Purpose –This study examines the controversial success of the International Public Sector Accounting

Standards (IPSAS) accrual implementation, using the case of Tanzania.

Design/methodology/approach –Interviews, documentary reviews and observations were used for data

collection. This study draws on the spectacle theory for data analysis.

Findings –Thefindings demonstratethatIPSAS accrualwas a spectacleduring its productionandconsumption.

The featuresand forms of the spectaclewere revealed in IPSAS accrual during its production and affirmed by

actors during its consumption. Further affirmation of IPSAS accrual as the spectacle was revealed through

communication of good news and the hiding of bad news. The outcome was the alleged roles of IPSAS accrual.

Research limitations/implications –The study is limited as it was conducted in only one country.

The controversial success is global and calls for further research in other parts of the world.

Practical implications –The International Monetary Fund should stop recommending implementation of

IPSAS accrual along with cash basis as the two systems are incompatible. Moreover, government officials

should have alternative thinking presenting a different view of the world, so as to avoid being passive, and

focus on reality rather than appearance.

Originality/value –Thisstudy is the firstto explainthe controversialsuccess ofIPSAS accrual implementation.

It demonstrates the usefulness of spectacletheory in the fieldof accounting research,especially in thecontext of

reform implementation.Moreover, this studyconfirms that IPSASaccrual is a spectacle(Uddin et al., 2011).

Keywords Spectacle theory, IPSAS, Tanzania, Accrual accounting, IPSASB, IMF

Paper type Research paper

Introduction

Accrual accounting is an aspect of new public management (NPM) because it reflects public

sector commitment to import commercial practices from the private sector (Guthrie et al.,

1999). Its adoption in the public sector is driven by the implementation of International Public

Sector Accounting Standards (IPSAS) (G

omez-Villegas et al., 2020). Traditionally, accounting

in the public sector is based on the cash principle (Christofzik, 2019). Accrual accounting

recognizes revenue and expenses in the accounting period in which they are earned or

incurred, respectively, rather than when cash is paid or received (Groot and Budding, 2008).

It is expected that it improves accountability, transparency, credibility, decision-making,

assisting investors, facilitating comparability of financial statements and showing the true

and fair view position of assets, liabilities, expenses and income, as addressed in the literature

(Groot and Budding, 2008;Moretti, 2016;Schmidthuber et al., 2022). However, some scholars

argue that accrual accounting has been unsuccessful as the expected objectives have not been

achieved (see, for example, Christofzik, 2019;Hyndman and Connolly, 2011;Moretti, 2016).

Adoption of accrual accounting is seen as the result of global pressure for a world of

standards (Lapsley et al., 2009). International organizations and other stakeholders, for

example, the International Public Sector Accounting Standards Board (IPSASB), the

Commission of the European Communities, the International Monetary Fund (IMF), the

Organization for Economic Cooperation and Development (OECD), the United Nations (UN),

the World Bank, management consultants, key reformers and some involved practitioners,

have played an active role in promoting the adoption of IPSAS accrual (Mart



ı, 2006). The

empirical literature shows that countries implement IPSAS accrual as a result of coercive

pressure from international organizations and other stakeholders (see, example,

IJPSM

35,6

692

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0951-3558.htm

Received 10 October 2021

Revised 2 February 2022

5 May 2022

Accepted 31 May 2022

International Journal of Public

Sector Management

Vol. 35 No. 6, 2022

pp. 692-706

© Emerald Publishing Limited

0951-3558

DOI 10.1108/IJPSM-10-2021-0238