Design of the Financial Management and Accounting Maturity Model for Public Sector Entities

Document Type : Research Paper

Authors

1 Prof., Department of Accounting, Faculty of Social Sciences & Economics, Alzahra University, Tehran, Iran.

2 Associate Prof., Department of Accounting, Faculty of Social Sciences & Economics, Alzahra University, Tehran, Iran.

3 Ph.D., Department of Accounting, Faculty of Economics, Management and Social Sciences, Shiraz University, Shiraz, Iran.

4 Ph.D., Department of Accounting, Faculty of Social Sciences & Economics, Alzahra University, Tehran, Iran.

5 Assistant Prof., Department of Accounting, Faculty of Social Sciences & Economics, Alzahra University, Tehran, Iran.

6 Associate Prof., Department of Accounting, Faculty of Social Sciences & Economics, Alzahra University, Tehran, Iran.

Abstract

Objective: The accounting and financial units play a crucial role in promoting financial reporting systems of the public sector. Reliable and accurate financial accounting and reporting increase accountability, budget control, transparency of financing, and improve the effective management of assets and liabilities. The efficiency and effectiveness of financial management is essential for making any change in the quality of public sector performance. An effective financial unit in the public sector is needed to achieve the goals of an Iranian resilient economy and financial discipline. The main purpose of this study is to provide a financial management and accounting maturity model for public sector reporting units in Iran. A maturity model with a good leveling will enable managers to evaluate public sector units. It also provides sufficient motivation for managers to attain higher levels of the maturity model and to attract the support of CEOs for improving actions. Maturity models are customized to the conditions of each country in the developed countries.
Methods: Maturity-related studies were reviewed to identify the components of financial management and accounting maturity. Then, the initial maturity model was designed based on the authors' experiences and the situation in the Iranian public sector. In the next stage, semi-structured interviews were conducted with Iranian public sector specialists selected through purposive sampling. The focus group technique was used to collect data through group interaction. Findings from the group interviews were analyzed using semantic analysis.
Results: The primary extracted components were modified using the opinions of experts. Dimensions of the maturity model include 1) information technology, 2) financial reporting, 3) budgeting and financial planning, 4) rules and regulations, 5) financial supervision and governance, 6) leadership, 7) efficiency and effectiveness, and 8) human capital. Based on the several discussions held in the focus group meetings, checklists can be used to measure the dimensions of the maturity model. It is also necessary to use experts to assess the maturity of reporting units.
Conclusion: Our results provide a clear framework for evaluating reporting units in the public sector. Managers can use the proposed maturity model in their policies for public sector units. Public sector organizations can use it to assess the status of their accounting and financial management units in Iran. They can also evaluate the strengths and weaknesses of the public sector accounting and financial management unit and use the model as a roadmap to develop the position of financial management. The results of this paper improve the quality of financial reporting of public sector organizations. In addition, the extracted components of the maturity model may lead to the presentation of the Excellence Award to the financial management and accounting units in the public sector of Iran.

Keywords

References

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Accounting and Auditing Review
Volume 29, Issue 2
2022
Pages 287-310

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