A Study on the Effectiveness of Accrual Accounting Standards in Public Units (With Special Reference to the Madhya Pradesh)

Abstract

The accrual system of accounting is more effective to present the financial position of a business entity rather than the cash system of accounting. The present study is conducted on the parameters which are base for the effectiveness of accrual based accounting to maintain the accuracy and accountability of the financial information in the Public Sector Units. The objective of this study is to examine the variables associated with the effectiveness of accrual accounting standards such as: reliability, authenticity, accountability, transparency and uniformity. In the study descriptive research design is applied and self structured questionnaire is prepared.  Total 65 finance staff working in selected public units was selected as sample on the basis of simple random sampling method. Statistical tools like correlation and regression were applied in examining the impact of factors related to effectiveness of accrual accounting standards on financial performance. The findings showed that through the execution of accrual accounting, one can do better asset management, improve consistency and comparability of financial information and manage corporate governance in better way.

Keywords-reliability, authenticity, accountability, transparency and uniformity, effectiveness of financial information.