The role of full accrual basis of accounting to improve accountability

Financial reporting is one of the key tools of Accountability. The government performs accountability through preparing and publishing financial reports to the citizens. In fact, democracy requires governments to be accountable against people who have delegated power to them. In Cash basis of accounting only receipts and payments have been emphasized. In this method, assets, liabilities, revenues and expenses do not be fully identified and reported. Although, accrual accounting is not the ultimate goal of financial reporting for enterprises but it is considered as a tool for changing the budgeting process from input cash to output. Governments hope to achieve more and better results from transferring to accrual accounting and get more managerial efficiency. The accrual basis establishment results in improving accountability, improving financial management, better financial performance comparison and stable government policy. Accrual financial reporting systems with an effective, powerful and high quality feature are considered the most comprehensive reporting system to enhance accountability and transparency for government financial reporting.

Keywords: full accrual basis of accounting, performance, accountability improvement