Using the full accrual basis instead of the cash basis in the Libyan government accounting system, and its impact on financial reporting

Abstract

This paper aimed to identify the possibility of using the full accrual basis instead of the cash basis in the Libyan government accounting system, as an efficient basis in achieving the objectives of financial reporting. On the real test of the inability to apply it to the accounting system in Libya, Where the study population is represented by those in charge of government units that apply the government accounting system, especially stakeholders from specialists, who are government accountants, heads of departments, directors of departments or general managers in the Ministry of Finance or in the municipalities within the borders of the Wadi Al-Shati region. And 60 questionnaire sheets were distributed as a tool for data collection to the three municipalities of Wadi Al-Shati evenly. The most important results of this study were the possibility of using the full accrual basis in Libya, where the results of the study hypotheses showed that the adoption of the accrual basis helps in achieving efficiency in the allocation of available resources. It also helps in preparing budgets that have the ability to meet the requirements of balancing programs and performance. As well as financial reports prepared on the basis of full accrual helps to achieve justice in the distribution of the tax burden. Also, the adoption of the accrual basis helps in achieving social justice in distributing the costs of public services. The study recommended the need to work on developing the governmental accounting system in line with accounting and auditing developments and in line with international accounting standards and international auditing standards in the public sector. The study recommended setting a plan to develop and modernize the accounting system in order to apply the accrual basis, develop government financial management, protect government assets, and achieve efficiency and effectiveness in managing public funds.