The influence of the nature of government accounting and reporting in decision-making: evidence from Switzerland

Abstract

A key objective of government accounting and reporting has been to achieve accountability and its use in that respect has been well documented, however its use for decision-making has had less coverage. This article addresses the latter issue, providing evidence from Switzerland that the accounting basis used (accrual versus cash) influences decision-making. This is the result of the effect that the different approaches have on the nature of the information used for decision-making. Switzerland was among the first western democracies to adopt accrual accounting at both state (canton) and local levels of government in the 1980s. The Swiss federal government followed in 2007. The main examples of the use of accrual information in decision-making are: the focus on self-financing of investments in order to control borrowing, as well as the fiscal policy targets of debt reduction and maintenance of capital. All three require accrual basis information. Therefore accrual basis information is key in fiscal decision-making in Switzerland.

Keywords:

• Accrual accounting
• cash accounting
• fiscal policy
• government accounting
• International Public Sector Accounting Standards Board
• Swiss government

Additional information

Notes on contributors

Andreas Bergmann

Andreas Bergmann is a professor at Zurich University of Applied Sciences (ZHAW), Switzerland, and chair of the International Public Sector Accounting Standards Board (IPSASB).