The Impact of the Accounting Transition from Cash Basis to Accrual Basis in the Healthcare Sector: A Case Study on Asir Central Hospital

Abstract

Traditionally, governments have relied on input-based budgeting systems and cash-based accounting systems. However, these systems do not provide the necessary information for the government to operate efficiently and effectively. The transition from cash basis to accrual basis accounting contributes to enhancing transparency and accountability, and improving management capabilities in the public sector through an integrated financial system, supporting decision-making with more accurate and comprehensive information. This research aims to understand the impact of the accounting transition in the healthcare sector through a field study in the financial management of Asir Central Hospital in Saudi Arabia. The study is divided into three main themes: the situation before the implementation of the accounting transition, during its implementation, and after its application. To achieve the study's objectives, a descriptive method using a survey approach was adopted, collecting data from the study sample through questionnaires distributed electronically to the hospital's financial management staff. A total of 20 complete responses were obtained from 40 employees in the study population. The SPSS program was used for data analysis. The study concluded that the financial management of Asir Central Hospital is prepared for the accounting transition in terms of human resources, technical and accounting systems, supported by several factors such as: proficient employee training, quality of the accounting and technical system, enhanced governance and overall performance, and employee expertise. Thus, the research highlights the importance of comprehensive readiness for the accounting transition in improving financial and administrative performance in the healthcare sector.