Evaluating the financial sustainability of government units under international public sector accounting standards

Abstract

Government units in Iraq rely on the traditional method of preparing financial statements, and great emphasis is placed on achieving financial control to ensure that government units do not exceed their financial allocations and that they are spent in the areas allocated to them without verifying the extent of the efficiency and effectiveness of the government units’ performance. They are managing money and achieving desired goals. This paper aims to evaluate the financial sustainability of public sector units in light of the application of international accounting standards for the public sector, as well as to demonstrate the impact of applying these standards on the level of financial sustainability of public sector units through the application of a case study in the Najaf Municipality Directorate. The results also show that applying international accounting standards for public sector units in the Municipalities Directorate In Najaf Governorate will significantly affect financial sustainability indicators compared to those extracted using the currently approved traditional accounting system. In addition, the possibility of enhancing the financial sustainability of public sector units and enhancing their financial performance requires the application of international accounting standards for public sector units because of the information they provide that reflects the true financial situation of those units. Therefore, the study recommends applying international accounting standards to public sector units in all centrally funded government units in Iraq to advance their financial management function, rationalize spending, and the possibility they provide for managing risk and achieving financial stability during crises