FINANCIAL REPORTING AND PERFORMANCE MEASUREMENT OF ITALIAN UNIVERSITIES

Purpose: There is an increasing trend and pressure on public sector entities (PSE) to broaden the scope of their financial responsibilities from accounting to accountability. To demonstrate accountability, PSE must provide clear, understandable and reliable information to citizens and taxpayers, which are entitled to high quality information about the financial performance. In more specific terms, there are two main reasons in order to expect high quality reporting from PSE: – the first reason is accountability: taxpayers and citizens need information which allow them to hold PSE accountable for use of public resources; – secondly, PSE, just like private organizations, need timely and accurate financial information to monitor and manage their performance. The paper examines these aspects focusing on a specific PSE: Italian public universities with the aim to investigate their financial reporting and performance measurement. The current accounting system of all Italian Universities is largely cash- or commitment-based budgetary accounting. So, the aim of this research is to evaluate the characteristics of the present accounting system, to understand the role of budget and financial reporting in decision-making process, to assess the measure of performance used and to investigate the possibility of the implementation of accrual accounting.