Central government accounting harmonization in EU member states: will EPSAS be enough?

Abstract

A highly controversial topic in the EU is the need for harmonized accrual-based standards to improve the quality of public accounts and reduce differences (adjustments) between the micro-(governmental accounting) and macro- (national accounting) levels. This paper shows that a set of high-quality accounting standards, like the future EPSAS, are not going to be sufficient to overcome the present lack of harmonization. The authors explain why this is the case having researched accounting data from 28 EU member states.

Keywords:

• Accounting practices
• comparative international governmental accounting
• deficit/surplus measurement
• legal enforcement
• macro- and micro-levels

IMPACT

This paper provides evidence for standard-setters that the future EPSAS will not, on their own, overcome the fragility of the European public accounting system. The authors propose that regulators, by enforcing effective reforms, should have an active role in preventing current discrepancies between micro- and macro-level government accounts.

Notes

* ESA95 was replaced by a new version (ESA 2010) in September 2014.

* Results (not tabulated) indicate that among the governance indicators there is enough intercorrelation to perform a PCA (OECD, 2008; Hair et al., 2010).

Additional information

Notes on contributors

Vincenzo Sforza

Vincenzo Sforza is Associate Professor of Public Management and Governance in the Department of Economics and Business, University of Tuscia, Italy.

Riccardo Cimini

Riccardo Cimini is a Researcher in the Department of Economics and Business, University of Tuscia, Italy.