Impact Of Financial Practices On Public Sector Performance: A Literature Review

Literature Review

In the public sector, the practices of the financial management plays a crucial role as there are various factors which impacts on the performance and the position of the public companies. The financial practices involve various kinds of policies, guidelines and the rules which are followed by the businesses to present and report their financial transaction in the financial statement. The changes in these practices, guidelines and rules could affect the financial performance of the business. The financial management practices in the public sector makes the positive changes in the public institutions, government and stakeholders of the business to make better conclusion about the position of the business. The financial practices are the independent variable which is not affected by the other factors, but few changes into the policy could affect the public sector performance. It has been found through the study that recording the financial transaction and presenting them in the financial statement is one of the important and mandatory processes for all the public sector companies in order to represent the financial performance and policies to the stakeholders of the business. The research paper mainly focuses on the impact of financial practices on the financial statement of the business.

through the study, it has been found that the study of Monir Mir and Wahyu Sutiyono, 2013, Mr. Patrick Mutai Cheruiyot, Mr. Julius Robert Oketch, Professor Gregory S. Namusonge, Professor Maurice Sakwad, 2017 and Frank Verbeeten, 2008 have been taken into the context to perform the study.

According to Mir and Sutiyono, 2013, it has been found that the few changes into the financial practices have affected the financial performance of the Indonesian company at a huge level. The Indonesian accounting standards had made few changes into the accounting and recording policies which have lead towards the different result of the financial performance ad because of it the stakeholder decision have been affected along with the investment level in the companies. The article explains that the demand of the stock of the companies depend on the financial statement and the performance of the business. If there is different practices followed by the company than the outcome of the company would be automatically different and it could affect the overall position of the business.

Along with the research of Mir and Sutiyono, 2013, it has been found that few changes could be done by them in order to improve the research outcome. Further, the article of Cheruiyota et al (2017) explains that along with the changes in the financial practices of the Kenya companies, the stakeholder’s decisions have been affected because they got different outcome than expected from the market. It explains that the financial practices are always the independent variable which would impact over the financial performance of the public sector companies and the economical position of the country.

Further, the Verbeeten, 2008 has explained that mainly the government policies and the amendments in the financial policies lead the different among the financial performance of the public sector companies. The article explains that the demand of the stock of the companies depend on the financial statement and the performance of the business. The financial practices are the independent variable which is not affected by the other factors, but few changes into the policy could affect the public sector performance.

Data Collection and Methodology

On the basis of the study on the different articles and the research paper, it has been found that the IT factors and other factors could also be researched in depth in order to reach over a better conclusion and outcome of the business.

The design of the research is basic for picking a reasonable strategy to gather data about the examination matter and efficiently meet the point and destinations of the examination matter. There are sure devices, procedures, and strategies as it would be basic getting a possible result. Moreover, there are sure strategies of the examination that could be utilized by the researchers to get data about the exploration issue like research reasoning, investigate philosophy, inquire about methodology, look into configuration, investigate techniques, and information accumulation strategy, testing, and foreseen constraint. The few of the strategies have been taken into the concern to perform this study.

The data collection method encourages choosing the reasonable wellsprings of collection of the data and meeting research point and goals. Likewise, it is inspected that primary and secondary information is utilized in the research to reach over a conclusion about the research topic and get the answer of the research questions. In this investigation, both primary and secondary information gathering methods is utilized to acquire data about the research issues. Through the essential information, the researcher will acquire new data with regards to the examination issue. There are creation sources as it could be considered by the researchers like perception and overview through asking some questions. Aside from this, secondary data collection method instrument is utilized to get reasonable data about research issues like a diary, articles, books, and on the web and disconnected sources. It would be basic for the achievement of the research goals.

Further, the sample size is also one of the important factors which must be evaluated while conducting the study. In the report, the sample size of the research report has been taken 3 companies. the financial data and the financial practices change of the 3 companies of last 5 years have been studied in order to identify that how the financial performance of the companies are affected by the financial practices and the policies of the company.

The time scale is one of the most important studies of a research paper which explains that how much time would be consumed to conduct the study and at what time which study and the method must be applied in the research to get accurate data. In the research report, the time has been demonstrated as below:

Figure 1: Gantt chart

In the respect of the above given Gantt chart, it has been found that the time was limited in the business and because of it, the quality of the outcome has been affected.

Conclusion:

On the basis of the study, it has been concluded that the financial practices are dependent factor in the public sector which affects the performance and the activity level of the public sector companies. If the public sector companies are following the different practices than the outcome of the company would be automatically different and it could affect the overall position of the public sector.

References:

Cheruiyota, M. P. M., Oketchb, M. J. R., Namusonge, G. S., & Sakwa, M. (2017). EFFECT OF PUBLIC FINANCIAL MANAGEMENT PRACTICES ON PERFORMANCE IN KERICHO COUNTY GOVERNMENT, KENYA: A CRITICAL REVIEW. [online]. retrieved from: https://www.ijern.com/journal/2017/December-2017/18.pdf 

Fryer, K., Antony, J., & Ogden, S. (2009). Performance management in the public sector. International Journal of Public Sector Management, 22(6), 478-498.

Mir, M., & Sutiyono, W. (2013). Public sector financial management reform: A case study of local government agencies in Indonesia. Australasian Accounting, Business and Finance Journal, 7(4), 97-117.

Van Dooren, W., Bouckaert, G., & Halligan, J. (2015). Performance management in the public sector. Routledge.

Verbeeten, F. H. (2008). Performance management practices in public sector organizations: Impact on performance. Accounting, Auditing & Accountability Journal, 21(3), 427-454.

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