Accruals Accounting Developments on Public Sector Accounting in Malaysia
According to a circular issued by the Accountant General’s Department (AGD), the new system is ‘expected to be flexible and in compliance with accounting standards based on cash or accrual basis, or a hybrid of both’ (AGD, 2003a: 1).
The AGD had also put forward the accrual accounting migration conceptual plan in which it is planned that the government would adopt accrual accounting by 2008. The accrual accounting system will be part of the support system for the Government Financial Management Accounting System (GFMAS) (AGD, 2003b).
The accounting basis used by the federal and state governments in Malaysia is that of modified cash accounting (a cash basis of accounting throughout the year but modified to include those transactions that relate to the financial year that occurred within one month of the year end).
Respondents of this study are federal and state government accountant in Malaysia that listed on AGD and researcher were using an e-mail. The study were examine the respondent’s perception on the objectives of financial reporting. The objectives listed in this question are identified in International Public Sector Accounting Standard No 1 (IFAC, 2000).The result shows these objectives, the last two objectives are more closely associated with the information provided by accruals accounting. This would seem to suggest that many of those closely involved with the preparation of governmental accounts in Malaysia see a need for the use of accruals accounting rather than modified cash.
Many respondents took the opportunity to write in comments and it was clear from these that it was generally felt that the current government accounting system is sufficient for providing financial information about government activities. Even so, there was also a clearly felt need for a movement towards accruals accounting. Among the suggestions offered for...
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