The accounting system and its importance in Iraqi universities

By: Assistant Lecturer Osama Mahmoud Khudair
Master's in Accounting

The importance of the accounting system in Iraqi universities increases as the roles of these universities become more complex, their funding sources expand, and their programs multiply. The university today is not just classrooms and laboratories; it is a public institution that provides educational, research, and community services. It deals daily with operational budgets, investment projects, research grants, and self-generated revenues such as parallel education, continuing education, and consulting. In this context, the accounting system becomes the hidden infrastructure that holds the threads of resources and transforms numbers into a clear vision, helping management with prudent planning, cost control, enhancing transparency, and compliance with regulations, which ultimately reflects on the quality of services provided to students, researchers, and the community.

The university's success in financial planning depends on its ability to assess its resources and expenses accurately, and this is what the accounting system provides when it is designed on scientific foundations that consider the nature of the public sector. Accounting in universities is not measured solely by the logic of profit and loss, but by the logic of accountability for public funds and directing them toward clear academic goals. From here, the value of gradual alignment with the International Public Sector Accounting Standards (IPSAS) emerges as a framework that helps unify definitions, improve disclosure, and enable comparisons over time and between universities, without undermining the prevailing national regulations. With this reference, budget preparation becomes a more mature and participatory process: research and academic priorities are defined, realistic scenarios for expenditure and revenue are developed, risks are identified and monitored early, and decisions are made based on data rather than intuition or impression.

The function of the accounting system does not stop at the planning stage. Still, it extends to daily cost control by tracking expenses according to the natural cost centers in the university, such as colleges, departments, laboratories, and research projects. This tracking enables management to discover areas of waste, compare actual expenditures with planned ones, objectively analyze deviations, and then take swift corrective actions before gaps widen. The accounting system also provides senior management and various university units with updated dashboards that offer a direct view of the cost per student or course, expenditure rates, liquidity levels, supplier commitments, and the status of research grants in terms of expenditure and achievement. And when these indicators appear regularly and in a clear, understandable visual manner, meetings become shorter, decisions become more precise, and governance becomes stronger.

One aspect that is often neglected, despite its importance, is asset management. Scientific equipment, laboratories, and infrastructure constitute the university's wealth, and their management requires an accounting system that ensures proper entry, a clear schedule for depreciation and maintenance, and precise inventory mechanisms that reduce the knowledge gap between what is recorded on paper and what exists in reality. The same logic applies to the management of grants and research projects; each funding requires a separate financial lifecycle that ensures tracking from the moment of contracting to the final closure, with clear accounting restrictions and disclosure of terms and obligations. With this precise separation, trust between the university and the funding bodies is strengthened, and the likelihood of fund overlap or misuse is reduced.

And because the university is an interconnected system, the integration between the accounting system and other information systems—such as student affairs, payroll, inventory, and procurement—is not a technical luxury but a necessity to reduce double entry and manual errors, and to speed up the workflow from purchase order to receipt, then payment and bank reconciliation. With digital transformation, it becomes possible to automate approvals based on permissions, link payments electronically with banks, execute bank reconciliations in a semi-automated manner, and provide reports in real-time. All of this enhances data governance thru unified dictionaries and definitions, controlled permissions, and audit logs that show who did what and when, thereby increasing transparency and reducing the chances of errors or manipulation.

However, building a robust accounting system cannot be achieved solely by software; the lion's share of success lies with the people and the procedures. The existence of a written and understood policy and procedure manual, along with the appropriate separation of tasks between recording, approval, reconciliation, and review, and continuous training programs for accountants and project managers, all transform the system from a collection of screens and reports into a solid institutional practice. Risk management must also be an integral part of the daily culture, through clear maps of liquidity, compliance, fraud, and technical failure risks, and response plans that are periodically tested to ensure readiness. And when this culture is translated into practical measurement indicators—such as the month-end closing time and report issuance, the accuracy of entries, the average days for collection and payment, the percentage of unjustified budget deviations, and the percentage of physically verified assets—governance becomes measurable, not just slogans.

In the environment of Iraqi universities, which often operate under financial and regulatory constraints and increasing societal pressures, digital accounting transformation emerges as a key lever for improving efficiency. A gradual approach can be adopted, starting with the highest-return units, such as procurement, inventory, and grant management, while building a small financial business intelligence unit responsible for designing dashboards, performance indicators, and short- to medium-term forecasts. This transformation will face natural resistance to change, but involving stakeholders, preparing "change ambassadors" within colleges and departments, and providing continuous hands-on training can overcome the obstacles, especially if coupled with the publication of concise financial reports for the public that enhance trust and social responsibility.

In the long term, universities will benefit from gradually aligning their reports and practices with IPSAS, enabling better and more precise comparisons between years and universities, and making them more prepared to address regulatory and funding bodies. Additionally, building a strong relationship with the banking sector through electronic payment gateways will improve collection, reduce reliance on cash, and shorten the financial cycle. As the university progresses along these paths, it directly reflects on the quality of its educational and research services: equipping laboratories with higher efficiency, supporting researchers with carefully managed grants, and managing academic programs that make decisions based on accurate data rather than intuition.

In summary, the university's accounting system is not just a ledger for recording entries or a reporting program, but a strategic system that redefines the relationship between money and academic goals. It is the tool that translates the university's vision into measurable outcomes, turns those outcomes into executable decisions, and transforms decisions into tangible impact in the classroom, laboratory, and community. In the Iraqi context in particular, where there is an urgent need to maximize impact within limited resources, investing in the development of the accounting system—with its institutional, digital, and human dimensions—becomes an investment in sustainability and excellence, and a necessary step toward a more transparent, efficient, and trusted university for everyone.