Transformation process of state accounting to accrual basis accounting in conditions of the Czech Republic

Abstract

This paper briefly outlines the significant issues that occur during the implementation of the accrual principle accounting in the public sector in the context of the reform of accounting of public finance in the Czech Republic. The reform mostly regards government organizational units, selfgoverning territorial units and allowance organizations. The objective of the paper is to describe the transformation process from state accounting to accrual principle accounting in the Czech Republic and to identify the main problems associated with the introduction of accrual principle. Authors summarize these key problems with the use of questionnaire survey results at the municipal level in the Czech Republic. According to the research presented in this paper, the ongoing reform has not provided the intended transparency of accounting in selected entities and these tend to have an impression of their efforts being wasted by doing unnecessary work. Drawing on the above facts, approaches to the public finance accounting reform by central authorities and municipalities are different. However, we can say that the reform was launched to improve the situation of users of financial statements and had been needed for many years because public sector accounting regulations were incomplete and non-uniform.