Question Tag: Transitional Challenges

a) Challenges when adopting IPSAS which will slow the speed of the transition to accrual accounting include:

• Set up of business process, such as CoA, IFMIS and ICT
• Change management – whether the changes are being driven from the top down, or bottom up. For example, changes driven by the top level of government may be mandatory for all entities within that government and may have fixed time frames;
• The current basis of accounting used by the entity, the capability of existing information systems, and the completeness and accuracy of existing information particularly in relation to assets and liabilities;
• Misconception between Management personnel concerning the impact of change to the budgeting basis;
• The level of political commitment to the adoption of accrual accounting and the system of government and the political environment; and
• The capacity and skills of the staff and organizations responsible for implementation of the changes.

(1.5 marks for 4 points = 6 marks)