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Accrual accounting – an untapped opportunity to measure the performance of budgetary bodies

Tamas Borbely (), Maria Kiraly Szikszaine () and Sandor Kakas ()
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Tamas Borbely: Project Manager, State Audit Office of Hungary
Maria Kiraly Szikszaine: Project Manager, State Audit Office of Hungary
Sandor Kakas: Director, State Audit Office of Hungary

Public Finance Quarterly, 2021, vol. 66, issue 6, 52 - 74

Abstract: Hungary's public accounting system underwent a significant reform in 2014. The reform meant not only a change in accounting, but also a new opportunity to support sustainable financial management and the measurement of organisational performance. In order to gather practical experience, a re-search was carried out by the State Audit Office. Based on the results of the survey, accrual-based accounting was only partially integrated into the accounting profit and return calculations of individu-al activities, and, especially in case of smaller organizations, it did not exceed the mandatory, admin-istrative role stipulated by law. Accrual-based accounting typically did not support the measurement of organisational performance. Further development can be carried out in terms of increasing the role of governing bodies in order to achieve target-setting, measurement and reporting along the same principles, as well as raising awareness. Moreover, in order to support organizational performance measurement, it may be necessary to develop a sectoral system of task and performance indicators, for which accrual-based accounting can become an important source of information.

Keywords: accrual-based accounting; organizational performance measurement; sustainable financial manage-ment; public sector; research (search for similar items in EconPapers)
JEL-codes: H11 H61 H83 M41 M42 M48 (search for similar items in EconPapers)
Date: 2021
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