From Servant to Master? On the evolving relationship between accounting and budgeting in the public sector

This paper addresses the evolving relationship between accounting and budgeting in the public sector. At the lowest stage, accounting has no influence over budgeting, it then tracks the flow of budgetary resources, and furthermore compares actual with expected performance, dutifully following budget rules all the time. But the nature of the relationship changes when accrual accounting acquires the confidence to challenge budgeting rules, necessitating an explanation of their differences, and possibly ending up converting budgeting to the accrual basis as well. This has happened only in a few countries so far. Whether the “servant” will become the “master” globally remains to be seen.