Into the Shadows - A Reflection on International Developments in Public Sector Accounting

Our earlier studies have reported on contemporary international developments in public sector accounting (PSA) within the reforms of New Public Management (NPM) and New Public Financial Management (NPFM). This paper focuses on what we consider to be the crucial change associated with NPFM, the transformation of traditional modified cash accounting into accrual accounting as part of these reforms. This paper discusses the change, in terms of structure and processes, focusing primarily on Australia, Sweden and the United Kingdom. The research finds that the accrual accounting in the public sector in these three different countries varies, and that there is a similar variation in private sector accounting in the three countries. We also find that the influence of the international standard-setters has recently become stronger in the public sector, but that a main decision-maker in the PSA, the politician, seems to be lost in the standard-setting process