With the importance of accrual accounting in the contribution towards accountability and performance measurement, this study therefore attempts to examine the extent of disclosure of accrual accounting information in Malaysia with a focus on the Sarawak local authorities’ annual financial statement. Contrary to their counterparts in West Malaysia and Sabah, the Sarawak local authorities’ financial reporting practices are very much different and majority of them are still using modified cash accounting. Drawing from the public accountability paradigm and institutional theory, three objectives of the study will be developed: (i) to determine the extent of disclosure of accrual accounting information in the annual financial statement, (ii) to identify whether certain set of variables, namely the technology infrastructure, size of local authorities, qualification of accountancy personnel, audit institution size and regulations have significant associations with the disclosure of accrual accounting information as found in (i), and (iii) to ascertain the perceptions of the Sarawak local authorities in the implementation and disclosure of accrual accounting information. Therefore, the study is expected to provide valuable inputs and frameworks for both regulators and researchers which may facilitate the Financial Management Transformation in the Sarawak local authorities by moving towards accrual accounting.
Keywords: Accrual accounting, annual financial statement, disclosure requirements, local authorities
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