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A 'Croatian' perspective on IPSAS based accounting and financial reporting model in the public sector

The aim of our research proposal is to discuss and analyse possibilities for foreseeable accruals and IPSAS appliance in Croatia. This study aims to reflect (a) the need for adjustments of Croatian public sector (governmental) accounting and reporting system so that it complies with the compulsory and recommended EU regulations (e.g. Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States sets that Member States shall have in place public accounting systems comprehensively and consistently covering all subsectors of general government and containing the information needed to generate accrual data), (b) the fact that Croatian budgetary regulatory framework implies future changes on the path of European and worldwide public sector accounting and financial reporting reforms (e.g. Croatian Budget Law recommends and normatively enables the International public sector accounting standards (IPSAS) implementation), (c) the need to explore the appropriateness of existing modified accrual accounting and financial reporting system in certain Croatian public sector sub-sectors, its discrepancies in assuring true and fair view of organization’s financial position and performance as opposed to accrual based model, in order to specify areas (sub-sectors) where it would be necessary to further develop the overall accrual government accounting information system. This research forms a part of a wider research project that explores the role of accounting and financial reporting system in enhancing a more efficient financial management in Croatian public sector. The study therefore presents the ongoing Croatian public sector accounting development processes and discusses the specific features and perspectives of Croatian governmental accounting and budgetary system reform in the light of international public sector accounting harmonisation processes. It provides an overview of recent publication referring to harmonization of budgetary accounting in the Republic of Croatia with the International Public Sector Accounting Standards ; reflects the implementation level of selected accounting solutions defined by IPSASs in Croatian public sector and the conformity of reporting in Croatian budgetary system with international accounting and statistics standards ; analyses and systematizes existing modified accrual financial reporting model constraints and eligible tendencies and challenges towards a more comprehensive IPSASs appliance. Based on our research insights of current Croatian system of public sector accounting and financial reporting years of appliance in practise, this paper identifies and discusses the reasons and specific areas for its gradual further development, and explains and elaborates reasons for supporting the thesis that financial, legal and technical constraints commonly associated with full accruals model and IPSAS introduction, are not anticipated to be significant and crucial constraint in pursuing public sector financial reporting reform. The study shows that taking into account the currently reached level of economic development and other relevant elements and specificities of both, the national economy and Croatian public sector, the current system can be evaluated as optimal transitional development phase towards accrual and IPSAS appliance. The paper also shows that although IPSASs are not obligatory enacted in Croatia, some public sector financial reporting model features comply with those recommended by IPSASs. Finally, the study also discusses translating and publishing IPSAS into Croatian language as the prerequisite for entities' better understanding standards' guidelines and implementing them in their accounting and financial reporting systems.

Public sector accounting; Accruals; IPSAS; Budgetary system; financial management; Croatia

Rad je također prezentiran i na radionici: EGPA XII PSG Spring Workshop, May 2015, Zurich – Winterthur. Rad će se doraditi prema sugestijama iznijetih od strane kolega s konferencije za potencijalnu objavu u posebnom izdanju međunarodnog časopisa koji prati radove prezentirane na konferenciji - Int. J. Public Sector Performance Management (Special Issue on "Public Sector Financial Management: Innovations, Achievements, Challenges and Prospects" ). Rok za predaju - rujan 2015., potencijalna objava ožujak, 2016.