The Role of accrual-based accounting as an infrastruture for the fiscal discipline of public sectors

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In the third (final) term of the research program, we progressed the following task ;1. Verification of the defects and limitations of the Cash-based accounting and usefulness of the accrual-based accounting for the role of the public sector accounting as an infrastructure for the fiscal discipline.2. Verification of the Usefulness of the accrual-based accounting as an infrastructure for the fiscal discipline of the Special Accounts in the Central GovernmentIn order to perform the first task, we analyzed the accounting data which use the index for the judgment of the financial healthy of the Local Governments. As a result, we found the defect of the "Real Deficit Ratio" because of the room for the artificial manipulation of the timing of redemption of the public loan and adjustments of reserve. These defects mean s the limitation of the cash-based accounting.In order to perform the first task, we analyzed the Statements of the revenue and expenditures in the Special accounts for the Central Government. We found a certain usefulness of the cash-based accounting information for the tool of promotion of the budget control. We also found the merit of the accrual-based accounting in the judgment of the rationality of the carry-over of annual expenditures and surplus.