Public Sector Accounting and Budgeting

Public Sector Accounting and Budgeting

The effect of the new financial management system in the public sector on its subsystems

Document Type : Review Article

Authors
Mehdi Agha Mohammad 1
Gholamreza Kordestani 2
Hossein Kazemi 3
1 Department of Accounting, Qazvin Branch, Islamic Azad University, Qazvin, Iran
2 Professor, Department of Accounting, Imam Khomeini International University, Qazvin, Iran
3 Assistant Professor of Accounting, Qazvin Branch, Islamic Azad University, Qazvin, Iran
Abstract
Financial management systems are placed in a wide set of processes and institutions and are affected by this set. Most of the developing countries have valid laws and regulations in the field of financial management of the public sector, but they are not implemented well, which has created a problem. The main purpose of this research is to investigate the new financial management system and evaluate its current situation in the public sector of the country. The current research is a mixed type of research. In the past, financial management in the public sector included reports on the resources and expenditures of the public sector, the application of the modern public financial management approach in accordance with the environmental characteristics of the country can lead to the integration of information systems, more realistic financial statements and ease of decision-making by creditors in investment opportunities as well as improving accountability through reporting on performance, assessing the ability to fulfill government and budget obligations. Financial management is an ideal method to control the financial activities of an organization. The modern public financial management approach in accordance with the environmental characteristics can make the information systems coherent and increase the ability to respond by presenting reports on performance, evaluating the ability to fulfill government and budget obligations. Also, modern financial management improves allocation management in the public sector and time management. In addition, it leads to improvement in the management of budget resource allocation, accuracy in measuring the cost of services and time management. If reforms are implemented without considering the nature of the country's public sector, it can lead to adverse consequences such as lack of creativity in the public sector, class divide, contradiction in performance criteria and financial corruption. 
Keywords
Financial Management
Public Sector
New Financial Management
Budgeting

Subjects

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  • Receive Date 24 June 2022
  • Revise Date 16 August 2022
  • Accept Date 24 August 2022