UAE in final phase of federal entities' switch to new accounting system
Adoption of accrual accounting will enhance the country’s position on global competitiveness indexes, finance ministry says
The UAE Ministry of Finance unveiled the third and final phase for government entities to switch to the accrual accounting system.
The transition to the new accounting standards provides an advanced infrastructure that is expected to enhance the country’s position on global competitiveness indexes, said Obaid Al Tayer, Minister of State for Financial Affairs, on Saturday.
Accrual accounting is a method where revenue or expenses are recorded when a transaction occurs rather than when payment is received or made.
The third phase will cover the ministries of interior, education, health and prevention and foreign affairs and international co-operation, among others.
These ministries began to apply accrual accounting methods from January 1.
The first group switched to accrual accounting on June 1 last year while the second batch adopted the new standards on October 1.
The Ministry of Finance has provided guides and manuals for a smooth transition and conducted 18 training sessions for more than 2,000 federal government employees.
“To help complete the project on time, the ministry allocated a specialised team to provide technical and accounting support to federal entity users, provide advanced technical forms and solutions, and direct them in preparing opening balances and collecting and exchanging information and data,” said Mr Al Tayer.
Public-sector entities are under mounting pressure to improve the management of public finances, according to PwC research.
One essential reform is for government to adopt the accrual accounting system, the consultancy said.
“By introducing accrual accounting, public entities demonstrate a commitment to improve the use and management of resources, a desire to promote enhanced financial reporting and transparency, plus greater accountability and a pledge to fight fraud and corruption,” said PwC.
Updated: February 14, 2021 02:59 AM