Editorial: PMM CIGAR theme: Public sector accounting—educating for reform challenges

Introduction

Accounting reforms are by no means new. For example, Soll (2014) explained that reforms in the field of public sector accounting have been taking place for 700 years, and ‘societies that managed to harness accounting as part of their general cultures flourished’. Soll (2014) also stressed the importance of integrating accounting into educational curricula for public sector reforms to be successful.

Over the past 20 to 30 years, accrual accounting and the International Public Sector Accounting Standards (IPSAS) have played a significant role in the reform and modernization of public sector accounting in many countries, adding further complexities (Karatzimas et al., 2022). As a result, there is a growing need to educate preparers and users of government financial information (Adam et al., 2020). As well, if public sector accounting education (PSAE) does not keep up with international developments, attempts to harmonize public sector accounting practices through the adoption of IPSASs will be hampered.

The overarching importance of PSAE for accrual accounting and IPSAS-based reforms was underlined in a PMM CIGAR theme ‘Public sector accounting education—stocktaking, challenges and innovations’ published in October 2022 (Public Money & Management, Vol. 42, No. 7). However, the theme also showed that there is still a long way to go before PSAE becomes an established discipline (Heiling et al., 2022). It was suggested that PSAE research should be further developed by applying a variety of research methods, ranging from international comparative analyses, case studies, surveys and interviews. The current theme is a further step in shaping PSAE.

The main goal of this new theme is to explore the relationship between accounting reforms in the public sector and the role of education. Recent reforms evidence a trend for accounting to move away from only technical financial issues, to include non-financial aspects, digitalization or government finance statistics.

This theme partly builds on the 16^th CIGAR Workshop (‘Educating for institutional change in public sector accounting?’), which was held in Cottbus and Berlin in September 2022. Workshop participants observed that research on PSAE is still limited and has traditionally focused on teaching methods, curriculum-oriented papers and career/employment-related issues. Also, international comparative research is very limited. An important aim of this PMM CIGAR theme was to provide a platform for research in PSAE and to further explore the role and objectives of PSAE.

The contributions in this theme

Debate articles

Cohen et al. (2023) addresses a major challenge for PSAE—the use of artificial intelligence (AI). While acknowledging the potential of AI tools, such as ChatGPT, to deal with tedious and straightforward topics in public sector accounting, namely those involving processing large quantity of available information, the author explains that academics in the field should not fear being replaced by AI. Teaching public sector accounting nowadays requires educating about using such tools, while stimulating critical thinking and critical assessment, and alerting students to take the best out of those instruments, while preserving creativity and being aware of possible traps.

Gomes et al. (2023) discuss the need to integrate new perspectives in PSAE, considering that public sector accounting is being challenged to enlarge its scope beyond the traditional technical perspective. While acknowledging the wicked contemporary issues faced by the public sector, namely climate, pandemic, energy and war crises, the authors debate the need to introduce innovative pedagogical approaches (for example dialogic pedagogy, project- or problem-based learning, collaborative work and simulation) in PSAE, by developing iterative learning processes. These methods are important to stimulate critical thinking and problem-solving skills, in order to prepare students to better understand the current environment of accounting.

Lorson and Haustein (2023) take the standpoint of German universities to argue that, in order to give PSAE the relevance it deserves, the Generation Z student profile should be considered. While acknowledging that public universities have an obligation to prepare accountants to work in the public sector, the authors recommend diversity, equity, inclusiveness, or pragmatic content-related or target group-related approaches to meet the preferences of Generation Z students, who are digital natives and are often more concerned with achieving happiness and contributing to the common good than with income generation. According to the authors, broad competencies on accounting, including public sector accounting, are important for matters of citizenship and democracy, as well as for a more sustainable future with the support of more competent managers. These purposes are more relevant than training professionals specifically for being recruited to work in the public sector.

Research articles

The article by Pericolo et al. (2023) explores the Italian PSAE setting in the light of such international trends as public sector reforms, e-government and digitization. The authors developed a taxonomy of curricula contents which can be used to investigate whether university courses support public sector changes. They found that recent changes in public sector accounting have had a minimal impact on the curricula of Italian higher education institutions (HEIs), leaving them outdated in terms of current and future practical challenges for public sector entities. Moreover, based on the international literature, the authors present a list of topics and competencies that they consider fundamental for equipping students with the necessary skills, capabilities and knowledge.

The next article, by Reichard et al. (2023), focuses on HEIs in Germany, providing empirical evidence of PSAE in public administration and public management programmes. They find different approaches in the coverage of accounting issues between research and applied sciences universities, as well as between bachelor and master programmes. Public sector accounting topics appear to be irrelevant in research universities and less relevant in master programmes in applied sciences universities compared to the bachelor programmes in those universities. The authors argue that this is a result of factors like the (low) representation of public sector accounting professors in the faculty, the stage of reform of the budgeting and accounting system at the respective government level, and the lack of demand for public sector accounting professionals.

New developments

Hoque (2023) reflects on how NPM values, impacting on the way public universities are managed, have contributed to reducing PSAE in the Australian context. Based on his own experience and reflection, the author argues that the only way for PSAE to survive in such a context is through some modules to be included in business accounting undergraduate programmes or, at least, for specialized public sector accounting topics to be addressed within general accounting modules. He also underlines an important role of professional bodies in requiring such matters to be taught in order for accounting degrees to be professionally accredited.

Falivena et al. (2023) develop a framework that can support higher education policy-makers and professional regulators by defining the accounting-related content course outline and syllabus within master’s programmes in public management or public administration. While acknowledging the need to reinforce studies on public sector accounting, considering ongoing reforms across the world, the authors highlight the importance of postgraduate studies in strengthening competences for professionals already in the field. As public sector accounting undergoes international harmonization, it seems appropriate that the content of what is taught about public sector accounting also follows a harmonized approach. A framework allowing courses to be compared is important to allow institutions within the same country and in different countries to understand what might be missing from syllabuses, in order to better prepare professionals for public sector accounting challenges faced internationally.

Finally, the article by Schuler et al. (2023) uses a socio-material perspective to highlight a misalignment between the human and the technical requirements of public sector accounting reforms. It appears that technical advancements receive far greater attention than public sector accountants’ educational development. PSAE can help in bridging these two aspects to overcome the various challenges that arise during a reform’s implementation. The authors also underline the relevance of continuous professional development to overcome reform challenges.

Conclusion

The need for more research

The ongoing development of internationally-harmonized public sector accounting, as well as recent challenges such as AI, climate, energy and war crises, underline the growing importance of PSAE. As public sector entities around the world face similar challenges, there is an increased need to research and develop a common ground for skills and competencies that preparers and users of government financial information need to be equipped with. International comparative PSAE research is needed to develop a best practice model of competencies to be provided for accounting reforms to be successful, and to address current worldwide challenges adequately.

Rethinking PSAE

Our new PMM CIGAR theme contributes to the discussion of the importance of PSAE through different case studies, which highlight the urgent need to strengthen the educational component of reforms rather than the technical side. It also debates new topics and approaches in PSAE, such as the use of AI, the importance of critical thinking and problem-solving skills as well as integrative approaches in teaching content (for example integrating business accounting and public sector accounting, Government Finance Statistics). Finally, it supports policy-makers and regulators in evaluating whether all necessary skills and competencies are adequately covered in their national educational programmes. As Soll (2014) showed, countries in which public sector managers are better educated, are more successful in implementing public sector reforms. We hope our new PSAE theme will increase scholarly and professional attention in regard to an international comparative discussion on how best to educate current and future public sector accountants.

Additional information

Notes on contributors

Jens Heiling

Jens Heiling is a Senior Manager with Ernst & Young GmbH Wirtschaftspruefungsgesellschaft, Germany. He was co-organizer of the 16th CIGAR Workshop held in Cottbus and Berlin in September 2022.

Berit Adam

Berit Adam is a full Professor of Public Management, especially financial management in the public sector, at the Berlin School of Economics and Law, Germany. Her research interests lie in international public sector accounting and financial management. She was organizer of the 16th CIGAR Workshop held in Cottbus and Berlin in September 2022.

Susana Jorge

Susana Jorge is Professor of Public Sector and Business Financial Accounting at FEUC—Faculty of Economics, University of Coimbra, Portugal, and Research Centre in Political Science (CICP), Portugal, with special research interests in financial reporting, IPSAS and transparency and local government

Sotirios Karatzimas

Sotirios Karatzimas is Assistant Professor of Accounting in the Department of Accounting and Finance at the Athens University of Economics and Business, Greece. His research interests lie in the field of public sector accounting and management accounting.