Analysis of Public Accounting Systems in the European Union

Abstract

Public accounting is continuously evolving and accrual accounting gains importance in governments. As a part of the New Public Management, this concept applies the practices used in the private sector to the public sector. The application of new accounting methods improves financial management and decision making. The European Union, through its Directive 2011/85/EU of November 8, 2011, is really sensitive to the use of reliable and transparent accounting data and accrual accounting could be a very interesting tool to provide quality data.So, the aim of this paper is to analyze the accounting systems used in the European Union Member States. After a review of the literature including concepts of New Public Management and accrual accounting, we classify, on the basis of a survey carried out in the European Union Member States, the States according to the accounting system they use at the central level and at the local level. This system can be cash basis accounting, modified cash basis accounting, accrual accounting or modified accrual accounting. We conclude that there are important disparities between the Member States and also within the country from a government level to another. However, we can see that accrual accounting is dominant in the European Union Member States.