The Process of Harmonization of Public Sector Accounting in the ÅU

Summary: This paper analyzes the need for harmonizing the standards for accounting reporting by fully applying the principle of Accrual Based Accounting in the public sector in the EU member states. It also examines the discrepancy between the accountancy in the public sector, based on the cash flow principle (cash basis) and the Accrual Based principle applied in the process of budgetary surveillance in the EU (ESA 95, 2011). The emphasis is laid on the strong dependency of the statistical information at the European level on the quality of the accounting and information basis of public finances and on Eurostat’s willingness to create a system of harmonized accounting standards, based on the Accrual Based accounting, which are in compliance with ЕSA and applicable to all agents in the State Management sector. This paper further analyzes the standardization of the accounting in the public sector of the EU member states and globally and presents some trends of its development. The conclusion is reached that IPSAS are an indisputable staring point to develop harmonized reports in the EU public sector. IPSAS provide the best