A Delegation-Based View of Accountability in Public Sector Accounting: Implications for European Public Sector Accounting Standards (EPSAS)

Thursday, 2 July 2015: 4:00 PM-5:30 PM
TW1.1.01 (Tower One)
Annemarie Conrath-Hargreaves, European University Viadrina, Frankfurt (Oder), Germany

The European Commission currently presses ahead the introduction of accruals-based European Public Sector Accounting Standards (EPSAS) in all Member States of the European Union (EU), which shall be developed on the basis of International Public Sector Accounting Standards (IPSAS). From a research point of view, the planned harmonisation of public sector accounting in the EU requires an assessment of the concept of accountability: On the one hand, accountability is the overarching objective of public sector accounting; on the other hand, accountability needs to be ensured when governments consider delegating standard setting to private parties, such as the International Public Sector Accounting Standards Board (IPSASB). To discuss the adoption of IPSAS/EPSAS from an accountability perspective, we introduce the concept of a delegation-based view of accountability from a citizens’ perspective. Our analysis suggests that accountability from a citizens’ perspective has primarily three notions: intergenerational equity, statutory financial restrictions and regulations, and resource allocation. While the IPSASB has continuously taken steps to improve accountability (particularly apparent in its newly published Conceptual Framework), we reveal that the IFRS-based individual standards do not yet reflect this. We follow that IPSAS need to be further dissociated from IFRS to allow for a reflection of the stronger emphasis on accountability. Furthermore, we argue that in the development of EPSAS the EU should, in a first step, define a framework from which accounting principles in line with accountability as the primary objective can be deduced.