Abstract:
The Sri Lankan government is considering the adoption of accrual-based accounting with the
objective of introducing internationally accepted best financial practices. The government now
operates on a cash basis/modified cash basis accounting system while the accrual accounting has
become the accepted norm for accounting across the world.
The research objectives are to identify the appropriateness of the accrual system, understanding
on SLAPS and accrual principles, identify suggestions for changes and finally, identify the
factors affecting the implementation of accrual accounting in the public sector of Sri Lanka. The
Roger’s Diffusion Theory (1962) of Innovation has been used as the theoretical framework and
semi-structured interview questionnaire is developed based on the same theory.
The general qualitative method has been used for the study. The population represents the
government accountants, academics & professionals. The judgmental sampling method was used
in selecting the sample. The sample included 20 accountants .The data collected through semi
structured questionnaire was analyzed manually.
The findings of the study include supportive factors such as awareness on the existing system,
lower accountability, wiliness to shift, better performance measures, system benefits, circular
issued to all entities and mandatory of adoption. The impeding factors are negative attitudes, lack
of influence, absence of monitoring task force, lack of top management support, lack of
communication, system complications, poor quality of output, lack of leaderships, and the
absence of an Act of Parliament.
.
The conclusion is that the government should adopt the accrual accounting system while taking
clear policy decision and formulating the implementation strategies with the advice of a steering
committee. The fiscal management and budgeting should also be changed to be in line with
accrual accounting. The experience of countries where accrual accounting is adopted should also
take into consideration.
