Accounting Reform in the Government of Canada: Exploratory Evidence on Accrual Accounting Adoption and Impact

Abstract

Abstract: This study investigates the adoption of accrual accounting in the Government of Canada. Data were collected through interviews of senior officials at central and implementing agencies. The political adoption decision was motivated by legitimacy and normative pressures by the accounting profession. The approach was primarily ‘top‐down’, with government‐wide accrual financial statements adopted, but many departments continued using cash accounting for decision making. It followed primarily the Anglo‐Saxon model, but with some European undertones. Benefits were scarce and difficult to attribute to accrual accounting. The ongoing impasse regarding accrual departmental financial statements and budgets suggests self‐interested behaviours by administrators and politicians.