Cash to accruals accounting in British central government: A journey through time

Abstract

Departmental and central government accountability to the UK Parliament was based principally on cash transactions for a period of over 300 years commencing with the Glorious Revolution of 1688. Beginning in the second decade of the 19th century, recurrent proposals for the replacement of cash accounting by accruals accounting were founded on the conviction that ‘commercial’ accounting practices provided a more effective basis for performance measurement, financial control and public accountability. This paper studies the progress of these initiatives through time, with Treasury resistance to the adoption of private sector-type accounting practices by administrative departments recognised as a persistent and effective barrier to innovation up until the 1980s.