Fund accounting : theoretical and empirical study

The public sector operates in the context of increasing demand for transparency and accountability and better control of financial resources spending. Governmental organizations differ from business enterprises in their missions, ways of revenue acquisition and performance evaluation. At the same time, international discussion about how to develop and improve governmental accounting uses commercial accounting as the only accounting framework and do not provide an attention to other available accounting models, such as fund accounting and cameral accounting. The thesis aims to introduce fund accounting into this international debate. The study acquires knowledge about fund accounting as an accounting platform, which is used when carrying out an empirical study, analyzing the financial statements of the City of Wolverhampton, UK. The study discusses if fund accounting, or some of its elements, could be of interest to use as a part of the accounting framework in the public sector. The study finds that even though, municipal accounting uses some elements based on the original fund approach, the fundamental fund accounting concepts changed their meanings affected by the current accounting trends of business accounting standards adoption in the public sector. The study takes into consideration the advantages of fund accounting, such as focus on budgetary control and fiduciary stewardship and suggests its improvement and simplification in order to serve the public sector better, but not the replacement by the commercial (accrual) accounting