PUBLIC SECTOR ACCOUNTING STANDARDS SETTING PROCESS IN DEVELOPING ECONOMIES: AN INQUIRY INTO ZIMBABWE’S CONVERGENCE AND DIVERGENCE WITH INTERNATIONAL PRACTICE.

Abstract

The study explored public sector accounting standard setting processes in developing economies and reforms that resulted in major accounting policy shifts. Financial management functions were regulated to ensure that quality accounting information was used in budgeting, preceded auditing and assessment of government financial environments. Developing economies carries many economic reforms to cab the scourge of hemorrhaging of natural resources due to lack of metrological standards to national account for net worth. The transformative reforms enhance the whole of government’s financial management systems, furthering global economic integration, increase transparency and accountability in these economies. The developed economies’ reservations on the used to come up with IPSAS, caused the development of home grown public sector accounting standards employing traditional and cultural processes that made them acceptable and legally binding in their countries. The study, hence chose a qualitative research approach as an exploration procedure of indulgence based on discrete methodological conducts of inquiry to search forsocietal opinions and constructed an intricate scenery, scrutinized arguments and reports, meticulously extracting interpretations from 51 informants purposefully selected because of their information rich characteristics, while conducting the study in a natural setting. The adoption of International Public Sector Accounting Standards [IPSAS] warts and all, was found to be the cause of elusiveness of achieving developmental targets and objectives in the developing economies. Also, the IPSAS reform process was donor driven in developing economies and did not consider local ethos while escaping scrutiny of stakeholders. The donor driven transformation processes were unfriendly to the host countries. A plethora of challenges on the process of setting public sector accounting standards included lack of legislative scrutiny and undefined reporting frameworks that created polarity. The myriad of challenges was exposed by persistent audit observations that seem to suggest that no accounting and reporting standards were being set. The study concluded that developing economies do not have public sector accounting standard setting processes. The study might impact on a policy shift to was training public sector professionals and the creation of an independent process that would be transparent and bringing in a fresh breath into the adoption process. The study contributes financial reporting templates that countries may use to prescribed minimum performance reporting that assist to evaluate accounting for accountability.