THE EFFECT OF TRANSITING FROM CASH ACCOUNTING TO ACCRUAL ACCOUNTING ON PERFORMANCE IN THE PUBLIC SECTOR
THE EFFECT OF TRANSITING FROM CASH ACCOUNTING TO ACCRUAL ACCOUNTING ON PERFORMANCE IN THE PUBLIC SECTOR

Summary/Abstract: The study of Romanian public accounting system starts from the following hypothesis: the organization performance – including the one of public institutions – could be shown in the financial statements, respectively Performance is highly brought forward through shifting from cash accounting to accrual accounting by offering more benefits compared to the existing situation before the reform. We tested the second hypothesis in two stages. Firstly, by analyzing the literature, we identified and rated the benefits that accrual accounting offers compared to cash accounting. Secondly, we transformed these benefits into themes and categories in the case of a content analysis of the Romanian financial statements before and after reform. By applying certain economic Analysis procedures we confirmed our hypothesis that accrual accounting is superior to cash accounting.

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