Financial Management Information Systems and accounting policies retention in Brazil

Purpose: The successful implementation of International Public Sector Accounting Standards (IPSAS) depends on the adoption and subsequent maintenance of accrual accounting policies. Moreover, Financial Management Information Systems (FMIS) are important drivers of reforms, and their replacement might disrupt the execution of accrual accounting policies. This paper aims to analyze the effects of FMIS replacement (or maintenance) on the retention of accrual accounting policies in Brazilian local governments. Design/methodology/approach: The research adopts a sequential mixed-methods approach, starting with a quantitative analysis of the presence of accrual accounting policies in local governments and the effects of FMIS replacement. Next, a qualitative analysis is conducted with a survey, documents and interviews to observe the FMIS replacement process. Our analysis focuses on local governments from one state in Brazil, but the context is highly transferable to other states, as the same procurement law and accounting regulations apply. Findings: FMIS replacement may reduce accounting policies retention; consequently, public procurement regulation may induce a public procurement context in which the IPSAS project would find more difficulties to prosper. Research limitations/implications: This research contributes to the IPSAS literature by examining the phenomenon of accounting policies retention or persistence, as one should not take it for granted that an adopted accounting procedure will be sustained over time. The analysis argues that FMIS replacement due to compulsory rebidding should be carefully considered. Practical implications: Promoters of accounting reforms may consider the regulation of contracting out for FMIS a relevant issue to the institutionalization of accounting policies. Originality/value: The analysis innovates by linking IPSAS accounting reform to the contracting out of FMIS.