History Of Accounting And Private Sector

1534 WordsSep 21, 20147 Pages
Introduction Since the early 1980s public sector accounting and private sector accounting have experienced significant transformation such as decentralization, deregulation and the differences between thee two sectors are highly topical and political in many countries (Blondal 2003). The key transformation is the adoption of ‘accrual basis’ of accounting rather than ‘cash basis’ accounting by increasing number of countries (Guthrie and Ryan 1998). Meanwhile, public sectors refer specifically to organizations owned by government and private sectors refer to those organizations which are not government, owned and run by individuals and companies for profit-oriented (Investopedia 2014). In this essay, there are several accounting issues to be discussed, include the development of sector neutrality, advantages and disadvantages of accrual basis accounting in public sector and meaningfulness of sector neutrality. Development of sector neutrality ‘New Public Management’ is used to describe the institutionalization of private sector corporate models into the public sectors (Guthrie and Ryan 1998). In order to set a standards to private and public sectors, the Public Sector Accounting Standards Board (PSASB) merged with the Australian Accounting Standards Board (AASB) in 2000 (Ryan, Guthrie and Day 2007). After merging with PSASB, the new AASB made a decision regarding International Financial Reporting Standards (IFRS) adoption in 2002 but effective in 2005 (Ryan, Guthrie and Day
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