New development: The protective role of conservatism in public sector accounting

Abstract

This article picks up a discussion in international business accounting about the appropriate definition and use of conservatism (or prudence) and calls for a similar discussion in public sector accounting. If financial reports present an overly optimistic situation, politicians might use them to justify spending public money that is not there, risking the sustainability of services and ‘borrowing’ from future generations.

Keywords:

• Conservatism
• EPSAS/IPSAS/IFRS
• prudence
• public sector accounting (PSA)

Acknowledgements

The views expressed in this article are solely those of the author. The author gratefully acknowledges the comments of participants at the 15th biennial CIGAR conference. He would also like to thank the two anonymous reviewers and the guest editors for their helpful comments and suggestions on earlier drafts of this article.

Additional information

Notes on contributors

Andreas Glöckner

Andreas Glöckner works for Division III3 (Accounting and Audit of Financial Statements) of the Hessian Court of Auditors, Darmstadt, Germany.