Finalidad y Objetivos de la investigación

The general comments section presented a very broad diversity of topics. Brazilian and English local governments’ comments were more related to their particular experiences on implementing the PSA reforms. Thus, Brazilian comments were related to general expectations regarding the changes as well as the strategy adopted to materialize them. English comments were more related to IFRS implementation and utility. Complaints were also made: English in regards IFRS usefulness and Brazilians in regards of general aspects of the reforms, such as its scheduled timing.

Brazilian general comments

The strategy followed by Brazilian local governments to implement the reforms was usually based in three pillars: qualified staff, systems and processes. A common view was that technical staff are not qualified enough to promote the changes, that most process will have to be reviewed and that the IT systems are not usually compliant or integrated. The technical staff believes that the accounting expertise is not valued by the local stakeholders. Therefore, Brazilian respondents believe that the PSA reforms will be an opportunity to show how important accounting information is in the decision-making process. Consequently, they believe that the accounting profession will be gradually more strategic in the local management as the PSA reforms progresses.

Some local authorities are using the opportunity brought by the PSA reforms to promote deeper changes, such as the coordination between different agencies in order to capture the accounting information timely, and to change local culture from

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cash budget oriented to become accrual oriented. Several governments have constituted accounting study groups to analyse, discuss and promote the reforms. In addition, it is said that an accounting career in local government is gaining strength, with new accounting positions being created to attract qualified professionals and, in some cases, significant investments in staff training. Finally, in some cases a partnership was observed between the Court of Accounts and the authorities in which both are learning together how to deal with this new accounting framework.

There are also challenges faced by a significant number of Brazilian local governments. One is the lack of financial and human resources. Some respondents suggested that local governments do not have resources to acquire consulting services or new IT systems and to train the staff. According to them, it may put in risk the PSA reforms locally.

Another challenge is the lack of political and institutional support. Some respondents suggested that the political administration is not against the reforms, but do not support them as the benefits will arise for the future administrations, and not for them.

The strict schedule that has to be followed was also presented as a challenge. It was suggested that the schedule to promote the PSA reforms is not long enough due to all the financial, technical and material challenges faced by Brazilian local governments.

The lack of previous experience with AA and IAS was suggested as another challenge. The cash basis culture is strongly present in the local governments, and it was suggested that AA and IAS are complex to be learnt when compared to cash

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accounting. Under the cash basis all the registries would be easier make when compared to the accrual basis, mainly because the latter requires more professional judgment.

The absence of a national benchmark was pointed as another challenge. It was suggested that it is impossible for the technical staff to learn from mistakes made by others. In addition, it was often suggested that the non-accounting or financial departments do not see the PSA reforms as a priority. In some cases, the efforts to complete these reforms would be centralised in the departments of accounting and finance, which are supposed to be the only responsible for the information that will be part of the financial reports. Finally, the low pay for the accounting and finance staff was also presented as a challenge. It was suggested that local governments do not attract skilled accounting and finance professionals due to their low wage policies.

Even though some managers believe that little will be changed by the PSA reforms, most of Brazilians expectations about the results are very positive. Some say that it is the opportunity to make the public sector more responsible with public resources, and making the finance/accounting office a source of information that is more useful than for external control purposes.

English general comments

The English opinions were usually positive regarding AA issues of PSA reforms and very critical about IFRS adoption. An example is that they suggested that while AA is logical, IFRS is driven from an academic viewpoint and would have questionable practical benefits. Some English respondents suggested that the theory presented in IFRS is not relevant for the public sector day-by-day accounting and financial

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management. Therefore, it would only add complexity to the financial management, and the concepts presented in IFRS would not improve local management.

Another pointed criticism of IFRS was that it brings little benefits to local authorities or to taxpayers. Respondents suggested that these standards do not bring more transparency on how public resources are used. Therefore, nothing would be changed other than increasing the financial management complexity. Public finances would still be hard to understand by local taxpayers and stakeholders. It was also suggested that even accountants sometimes have difficulties to understand IFRS (e.g. financial instruments). Some respondents suggested that it would lead to an opposite effect to transparency and would not support the decision-making process.

It was also suggested that IFRS brings many transactions (e.g. for fixed assets) that are reversed out and have no effect in decision-making. According to them, it seems to be just ‘paper transactions’ without any effect other than making the statements harder to be understood by the lay user. These transactions would have to be excluded while determining the cash needed to support local government services.

Finally, English respondents pointed out that IFRS implementation was very resource intensive and had only increased the cost of producing the accounts rather than adding any value to the readership of them. They commented that this is unacceptable in times of financial austerity.

The positive aspect of IFRS implementation was that it was well planned, usually going smoothly. Some minor challenges were found and overcome, such as making the fixed assets software compliant and providing comparative year data.

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CHAPTER V

5. QUALITATIVE ANALYSIS

This chapter presents the analyses of the data collected through the interviews. It uses the coded interviews as the basis to identify deeper aspects of the Brazilian and English financial managers perceptions with regards to PSA reforms.

This chapter is divided into two different sections. The first one presents Brazilian and English local governments’ perceptions of the AA, IAS and CH aspects. It consists of the analysis of the first nine interview questions. The second section is based in the interview guide last question, which is not linked to any of the questionnaire variables.