Review of Related Literature

Our business landscape is continuously changing. Therefore, authorities and

governing bodies need to cope with the changes, and because of this the Government
Accounting Manual came into existence, it’s a milestone so far for the Philippine
Government insofar as public accounting sector is concerned. Government Accounting
Manual updated the standards, policies, guidelines and procedures in accounting for
government funds and property; coding structure and accounts; and accounting books,
registries, records, forms, reports and financial statements. According to the manual
with regards to the preparation of financial statements and other reports in conformity
with the requirements of the PPSAS and relevant accounting policies, it ensures
uniformity, accuracy, reliability and timeliness.
According to Dayag (2017), profit oriented entities and government entities are
not the same in reporting to the shareholders, but they should make sure that they
provide a report accounting the funds received and how they are spent. Perhaps most
importantly, taxpayers are entitled to see how the government is spending their money.
Pursuant to Section 109 of PD 1445, government accounting “encompasses the
process of analyzing, recording, classifying, summarizing and communicating all
transactions involving the receipt and disposition of government fund and property and
interpreting the result thereof.”
The status and wellness of a barangay’s accounting information system differs,
be it rural or urban. On a study by Bukar et al. (2013), it states that giving utmost
attention to the biggest challenges that the local government system today is
experiencing which are the lack of proper cash management and poor internal revenue
sourcing and collection is very necessary to ensure fund’s safety and proper application
of such funds to the required areas.
In relation to barangay’s accounting information system a study conducted by
Valle-Cruz et al. (2016) indicates that interactions between citizens and municipal
governments, supported by technologies, do affect citizens’ perception of transparency,
efficiency, and corruption and that the most impactful technologies identified were
websites, social media, and mobile technologies. The only demographic factor that had
a significant effect on citizens’ perception was employment status.
Also, a study by Nirwana et al. (2018) says that personal factors competence,
system or administration on factors regulation, and political factors will affect on the high
financial statements quality. On the other hand, they found out that personal factor
competence has no direct effect on the high or low performance.
According to Gillera et al. (2014) sources from other countries (trust fund), as
initiated by private companies, Foreign loans. Their study also indicated that
management of funds of government agencies differ, Ecosystem Research and
Development Bureau as the central office has a right to play the key facilitating role in
the implementations and operations, thus, broadening its scope in getting other sources
of funds, allocation, disbursement and monitoring.
In addition, Brule et al. (2015), article’s main contention is that the important
dimension of the state’s accountability to its citizens is the variation in individuals’
perceived ability to engage elected officials.
As regards to the LGU’s efficiency and quality of performance Sarmiento et al.
(2014) study revealed that in terms of economic dynamism the LGU’s overall quality of
performance is highly relevant but not excellent.
Transparency should always be observed in every information system and
financial reporting especially on the part of the government. Amir et al. (2017) finds that
business corruption is rampant on a wealthier country compared to the poor countries.
Falkowski (2013) which studied political accountability and governance in rural
areas finds that establishing leader-type public-private partnerships seems to be more
likely in municipalities where holding politicians to account is easier.
Meanwhile, a qualitative study by Gullberg et al. (2016) shows that timeliness is
also determined by organizational values and routines, management style and
managers’ previous experiences of technology not just accounting artefact.
Kim et al. (2012) study suggest that its likely to create a positive perception of
government transparency on e-participation applications focusing on user-friendly
design, it also finds that their development and their assessment of government
transparency is directly associated with e-participants’ satisfaction with e-participation
application.
A study conducted by Modlin (2012) indicate numerous reporting problems within
a majority of county governments ranging from internal control problems to
reconciliation issues that are required to be addressed for information users that
question the sustainability of the unit.
Fernandes et al. (2017) study shows that the higher implementation of open
government information, the stronger the influence of role of public leader on public
service performance.
Kapur (2019) The main areas that have been taken into account in this research
paper include, self-help: an issue in rural development, Ministry of Rural Development,
Department of Rural Development, principles of effective rural governance and
implementation of leadership functions.
Wiley (2015) stated that the answer to a question on “why were separate
accounting and financial reporting standards needed for governments?” depends on the
objectives and identities of the readers and the users as well as the overall objectives of
governmental financial reporting. In his book one primary characteristics of a
government’s structure and the services it provides is that, the relationship of taxpayers
to service receivers-In terms of impact on the objectives of financial reporting this
characteristic of governments may be the most significant. Following are some
interesting points that the Government Accounting Standards Board included in
Government Accounting Standards Board Concept Statement 1 (1987) that may affect
financial reporting objectives: Taxpayers are involuntary resource providers. They
cannot choose whether to pay their taxes, another is that it is difficult to measure
optimal quality or quantity for many of the services provided by governments. Those
receiving the services cannot decide the quantity or quality of a particular service of the
government.
Administrative Code (1987) Sec. 1, Chap. 1, Subtitle B of book V states that “all
resources of the government shall be managed, expended or utilized in accordance with
law and regulations and safeguarded against loss or wastages through illegal or
improper disposition to ensure efficiency, economy and effectiveness in the operations
of government. The responsibility to take care that such policy is faithfully adhered to
rests directly with the chief or head of the government agency concerned.”
United Nations Convention Against Corruption (2003), Art. 9 of Chap. II states
that “[e]ach State Party shall, in accordance with the fundamental principles of its legal
system, take appropriate measures to promote transparency and accountability in the
management of public finances. Such measures shall encompass, inter alia:
Procedures for the adoption of the national budget; Timely reporting on revenue and
expenditure; A system of accounting and auditing standards and related oversight;
Effective and efficient systems of risk management and internal control;
and Where appropriate, corrective action in the case of failure to comply with
the requirements established in this paragraph.”
Mancini et al. (2013) in his lecture notes in information system and organization,
mandatory compliance in transparency of public administration research paper shows
that a better level of transparency is achieved when it is required by law. s