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Which accounting system is more suitable for the Dutch central government: a comparison between accrual based accounting system and commitment-cash accounting system

Schrooten, R.G.A.M. (2014) Which accounting system is more suitable for the Dutch central government: a comparison between accrual based accounting system and commitment-cash accounting system.

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Abstract:Purpose – This paper aims to give a multiple-perspective view on the future of the Dutch central accounting system. Currently the commitment-cash accounting system is used to produce information in the Netherlands. We make a comparison between the accrual based accounting systems and the cash accounting system, using the insights of different perspectives. The main purpose was to create a vision, explaining which accounting system should be adopted. Design/methodology/approach – Seven stakeholders were interviewed. These respondents have different backgrounds, for example: academic, public and private sector backgrounds. The sample group was chosen based on their high financial expertise regarding accounting systems. The interviews were semi-structured. Findings – Although the Dutch government will not reform on short-term notice, the outcome of the research suggests that an accounting reform towards an accrual based accounting system should be considered as inevitable. The current cash accounting system does not provide sufficient information. Furthermore, the European Union is preparing an accrual based accounting system for all member states, which will be called EPSAS. The EU wants to improve the quality of the accounting information, on which the EMU data is based. Research limitations/implications – The sample group was relatively small with seven respondents. However for exploratory research this could be considered as sufficient. In the interviews multiple perspectives were gathered. Although the respondents all have different backgrounds, for future research a cross-reference between experts with the same background could be made. The proposed EPSAS system will serve as financial reporting tool. In regard to budgeting, no reforms will be made. A future dual system is a possible consequence for the Dutch central government. Further in-depth research could give more insight in the cost and complexity of a dual system and accrual accounting in budgeting. Originality/value – The main contribution of this paper is the vision, which is built in respect to the future of the accounting system in the Dutch central government. By refuting the arguments of the Dutch minister of finance, used in the recent assembly of the committee of national expenditure, this paper can contribute to the discussion about adopting accrual accounting in the whole Dutch government. Beside this discussion, the paper contributes by providing multiple perspectives, such as possible shifts in the balance of power, technical aspects of accrual accounting reforms, etc.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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