Accounting Problems in the Public Sector Entities: Evidence from Republic of Bulgaria

The article discusses the accounting problems in the public sector entities in Republic of Bulgaria. The study is based on academic research, articles of professional organizations, regulatory documents, and reports of state institutions. The hypothesis is that there is weaknesses in accounting in the public sector, caused by the multitude of regulatory documents above all, the lack of special accounting standards. The research method is based on analysis of the reports of the National Audit Office about the audits of the annual financial statements of budgetary organizations in the period from 2015 to 2022. The problems of the classification of incomes, expenses, assets and liabilities, accounting for depreciation, accounting for provisions, reporting of payment commitments, accounting for impairment of non-current assets and funds under EU programs are analyzed. As a result of the study, it is established that the frequent changes in the requirements of the regulatory framework related to financial and accounting reporting is main reason for the systematically repeated weaknesses. This affects the quality of information on the net asset value and financial position of budgetary organizations presented in the financial statements highlighting the need for developping specific national accounting standards for the public sector in Bulgaria.