Advantages of Using Accrual Accounting in the Public Sector

Cash basis has been used in the governmental accounting traditionally; however, thegovernmental accounting system in some countries has changed from cash basis to accrualbasis in recent years. Some experts in these countries have believed that accrual basis ofaccounting can act better than cash basis of accounting with regard to the transparency of financial reporting especially in the governmental accounting. Therefore, the analyticalstudy on the advantage of using the approach seems to be necessary. In order to studythis subject, we must recognize the fundamentals of cognition in relation to accountingbefore anything. Thus the benefits from applying accrual basis of accounting on thepublic sector have been studied in this research. This study is a kind of survey, havedistributed some questionnaires to two following groups: professionals and academics.The result from testing hypotheses indicated that the performance of accrual basis ofaccounting is better than cash basis of accounting.