Accrual Accounting Change: Malaysian Public Sector Readiness

Abstract

The federal government decision to implement accrual-based accounting in Malaysia under the Government Transformation Programme (GTP) led to major changes in public finance management. To ensure the reforms achieve the target, the behaviour and mindset of employees must be ready. Therefore, this preliminary study will determine which attributes measure the readiness for change among public sector accounting personnel in Malaysia. This study also investigates any significant difference between demographic factors (position and length of service) and readiness for change. A survey was conducted of 119 public sector accounting personnel consisting of accountants, assistant accountant 1 and assistant accountant 2 in respect of their readiness to adopt accrual accounting in various ministries in Malaysia. The objectives of the study have been tested using descriptive analysis and ANOVA. The general findings show that the respondents have positive behaviour concerning readiness for change to accrual-based accounting. However, the results show that they are slightly disagree to take responsibility if the accounting change fails in their area. This study proves that the demographic factors of position and length of service are not related to readiness for change. These results are important for the government in order to strategize the effective guidelines for change interventions to ensure the successful implementation of accrual accounting in Malaysia.