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Article
Publication date: 12 September 2023

Margarida Isabel Liberato, Inna Choban de Sousa Paiva and Rogério Serrasqueiro

The purpose of this study is to discuss the most relevant literature related to the adoption of International Public Sector Accounting Standards (IPSAS) in the public sector in…

Abstract

Purpose

The purpose of this study is to discuss the most relevant literature related to the adoption of International Public Sector Accounting Standards (IPSAS) in the public sector in developed and developing countries, identifying the constraints and stimuli they represent in the implementation of the public accounting reform. It also presents future research proposals on the factors identified.

Design/methodology/approach

The methodology is based on a systematic review of the literature described by Moher et al. (2009). The final sample includes 90 academic papers published from 2000 to 2022.

Findings

The main findings indicate that there are differences between constraints and stimuli in the implementation of accounting standards between developed and developing countries. In terms of constraints, the main factor in developed countries is the lack of training, whereas in developing countries it is the limitation on financial resources. In addition, the results demonstrate that in developed countries the factors that most encourage the implementation of accounting standards are modernization and improvement of accounting, while in developing countries, encouragement comes mainly from external and internal pressure.

Practical implications

This study helps countries and institutions to learn from experience and better prepare for the accounting reforms of public administration that they will undertake. Managers of public organizations may be willing to make decisions in the adoption of IPSAS if they take into account the factors established herein.

Social implications

This study helps countries and institutions to learn from the experience, better prepare for the public administration accounting reforms that they will undertake and add greater transparency in the accountability of public accounts to citizens.

Originality/value

In addition to previous studies, this study addresses a number of factors perceived by those involved in the implementation of IPSAS in developed and developing countries and provides a robust research agenda to pursue during the coming years, as there are several important unexplored questions that invite further research.

Details

Journal of Accounting & Organizational Change, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 5 December 2023

Justyna Fijałkowska, Dominika Hadro, Enrico Supino and Karol M. Klimczak

This study aims to explore the intelligibility of communication with stakeholders as a result of accrual accounting adoption. It focuses on changes in the use of visual forms and…

Abstract

Purpose

This study aims to explore the intelligibility of communication with stakeholders as a result of accrual accounting adoption. It focuses on changes in the use of visual forms and the readability of text that occurred immediately after the adoption of accrual accounting in performance reports of Italian public universities.

Design/methodology/approach

The authors collect the stakeholder section of performance reports published before and after accrual accounting adoption. Then, the authors use manual and computer-assisted textual analysis. Finally, the authors explore the data using principal component analysis and qualitative comparative analysis.

Findings

This study demonstrates that switching from cash to accrual accounting provokes immediate changes in communication patterns. It confirms the significant reduction of readability and increase in visual forms after accruals accounting adoption. The results indicate that smaller universities especially put effort into increasing intelligibility while implementing a more complex accounting system. This study also finds a relation between the change in readability and the change in visual forms that are complementary, with the exception of several very large universities.

Practical implications

The findings underline the possibility of neutralising the adverse effects of accounting reform associated with its complexity and difficulties in understanding by the use of visual forms and attention to the document’s readability.

Originality/value

This paper adds a new dimension to the study of public sector accounting from the external stakeholder perspective. It provides further insight into the link between accrual accounting adoption and readability, together with the use of visual forms by universities.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 21 March 2024

Michalis Bekiaris, Thekla Paraponti and Foteini Spanou

This paper develops and tests a theoretical model that draws on the Diffusion Contingency Model and the Theory of Human Behavior to explain the factors influencing users’…

Abstract

Purpose

This paper develops and tests a theoretical model that draws on the Diffusion Contingency Model and the Theory of Human Behavior to explain the factors influencing users’ acceptance of accrual accounting in terms of two distinct dimensions: behavioral intention and usage behavior.

Design/methodology/approach

Based on surveyed data from financial departments and directorates of different Greek general government entities, the paper uses factor analysis to build a theoretical model that assesses the factors influencing behavioral intention to adopt and usage behavior of accrual accounting. Then, it tests the relationship between behavioral intention and usage behavior through structural equation modeling.

Findings

The theoretical model suggests that the expected improvement of the quality of financial information and political and financial support are the most important determinants of behavioral intention. Usage behavior is mainly influenced by the compatibility between the existing legal framework and the new accounting system. The structural equation modeling identifies a statistically significant positive influence of behavioral intention on usage behavior.

Practical implications

The study provides valuable insights regarding the timing and focus of the actions taken by policymakers when designing accounting reforms. Special attention is drawn to the factors influencing behavioral intentions, as these are found to influence usage behavior significantly.

Originality/value

The study extends prior research on the diffusion of accounting innovations by breaking down the diffusion process into intentions-oriented actions aiming to promote accrual accounting and increase acceptance and implementation-oriented actions aiming to facilitate successful implementation.

Details

International Journal of Public Sector Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3558

Keywords

Article
Publication date: 8 December 2023

Augusta Ferreira

The aim of this paper is to investigate whether Mayors in Portugal engage in earnings management close to zero with the motivation of re-election.

Abstract

Purpose

The aim of this paper is to investigate whether Mayors in Portugal engage in earnings management close to zero with the motivation of re-election.

Design/methodology/approach

The data used in this study were annual financial information from Portuguese municipalities from 2005 to 2016, as well as data on elections and Mayor re-elections involving three political cycles. The methodologies employed were quantitative, including graphical and panel data regressions.

Findings

The results indicate that municipalities used discretionary accruals to engage in earnings management to report net earnings close to zero, and re-election seems to be a motivation for earnings management behaviour. Furthermore, the results suggest that municipalities in which the Mayor is re-elected are less likely to report positive net earnings close to zero.

Originality/value

This paper makes a valuable contribution to the literature on earnings management in municipalities. At the theoretical level, it makes it possible to identify whether re-election is a motivation for earnings management and, in this sense, to identify patterns of behaviour by managers. On a practical level, the knowledge of a manager's behaviour patterns will help to anticipate his or her future behaviour and, consequently, may prevent inefficiencies.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1096-3367

Keywords

Article
Publication date: 12 December 2023

Joyce Njoroge, Lori Solsma and Kent Hu

This paper documents the Government Accounting Standards Board (GASB) 34 literature, primarily in the areas of (1) accountability and improved reporting, (2) government-wide…

Abstract

Purpose

This paper documents the Government Accounting Standards Board (GASB) 34 literature, primarily in the areas of (1) accountability and improved reporting, (2) government-wide financial statements and accrual accounting and (3) infrastructure asset capitalization and the modified approach. The paper also evaluates the state of the research, recognizes implications for practice and standard setting, identifies knowledge gaps and proposes avenues for future research.

Design/methodology/approach

The authors identified the articles in this narrative review by searching Google Scholar and EBSCO for the years 2000 through 2023, using the keywords GASB 34, government-wide financial statements, government fund statements, infrastructure assets and modified approach.

Findings

This review finds that GASB 34 requirements improved accountability and reporting, but GASB can still make improvements. The addition of the MD&A section requirement improved readability but placed a burden on preparers. Analysis of government-wide statement research indicates that the accrual-based Statement of Net Assets provides value in credit decisions, while the accrual-based Statement of Activities does not. The research on infrastructure accounting requirements shows limited adoption of the modified approach and some comparability issues with choices involving capitalization thresholds, baselines and asset management systems (AMSs). Based on this review, the authors also present suggestions to further this line of research.

Originality/value

To the best of the authors’ knowledge, this is the first article that reviews over 20 years of GASB 34 related literature. The review and suggestions for future research are timely as GASB is in the process of reexamining some of GASB 34's requirements.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1096-3367

Keywords

Article
Publication date: 12 January 2024

Ioanna Malkogianni

This study examines specific budget execution items (as proxies of vulnerability and sustainability) along with political factors to identify earnings management (EM) practices in…

Abstract

Purpose

This study examines specific budget execution items (as proxies of vulnerability and sustainability) along with political factors to identify earnings management (EM) practices in Greek municipalities.

Design/methodology/approach

The study employs a sample of 1,831 financial and budget execution statements for the period 2011–2019. EM is proxied by unsigned discretionary accruals that are assessed through the performance-matched modified-Jones model and the modified-Jones model.

Findings

The findings provide evidence that the municipality’s dependence on subsidies (or its self-sufficiency) affects EM, especially during the pre-election year. Municipalities that maintain their financial autonomy engage less in EM in pre-election years. Lastly, it is proven that electoral cycles, weak opposition and other variables exert an effect on the size of EM. Sensitivity analysis confirms the results.

Originality/value

This paper contributes to the literature on EM by analyzing for the first time budget execution items (as proxies of vulnerability and sustainability) and their impact on the size of unsigned discretionary accruals.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1096-3367

Keywords

Article
Publication date: 14 August 2023

Gerasimos Rompotis and Dimitris Balios

This paper tries to shed light on the international progress regarding the adoption of International Public Sector Accounting Standards (IPSAS), to accentuate the benefits…

Abstract

Purpose

This paper tries to shed light on the international progress regarding the adoption of International Public Sector Accounting Standards (IPSAS), to accentuate the benefits resulting from the application of IPSAS, and to highlight the main differences between IPSAS and IFRS.

Design/methodology/approach

A comprehensive literature review is conducted which focuses on issues concerning the factors that induce the adoption of IPSAS, the obstacles that must be overcome, the degree of IPSAS’ proliferation worldwide, the repercussions from adopting IPSAS, the benefits of IPSAS, and the differences between IPSAS and IFRS. The selection process of the cited articles focuses on journals with high rankings in the ABS list.

Findings

It is accentuated that IPSAS carry significant benefits regarding the improved quality of the financial information reported by the public sector, the enhancement of transparency and accountability, the upgrading of the decision-making process and the restored trust in public finances. However, there is more work that needs to be done toward the global proliferation of IPSAS.

Practical implications

This study provides insights regarding the implementation process of IPSAS, which should be useful to all the parties engaged in the reform of the public administration, such as national governments, local or international regulators, accounting standard setters and institutional organizations.

Originality/value

The current study clarifies whether the public sector should move from using the business focused IFRS, as it is frequently the case, to the adoption of IPSAS. In addition, this study comprehensive literature review can be used by academics and researchers as a basis for further research on the issue. More importantly, policymakers and other officials who need to make informed decisions about financial reporting issues at the government level and the public sector in general can benefit from this study.

Details

EuroMed Journal of Business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1450-2194

Keywords

Article
Publication date: 13 April 2022

Diem Nhat Phuong Ngo and Cong Van Nguyen

This study aims to analyse the role of the financial and accounting expertise of the chief executive officer (CEO) on financial reporting quality (FRQ) in an emerging economy.

Abstract

Purpose

This study aims to analyse the role of the financial and accounting expertise of the chief executive officer (CEO) on financial reporting quality (FRQ) in an emerging economy.

Design/methodology/approach

This study is based on data collected from a large sample of all non-financial companies listed on Vietnamese stock exchanges during the period 2016–2020 with 2,435 observations. FEM-ROBUST standard errors regression model is used to examine the relationship between the financial, accounting expertise of CEOs and FRQ through earnings management by discretionary accruals.

Findings

The results show that CEOs with financial and accounting expertise have more influence and intervention on earnings management and thus adversely affect FRQ. This behaviour is explained by the fact that CEOs not only have a firm grasp of financial and accounting policies but also know the tricks to interfere with earnings management. Moreover, in the context of emerging economies, CEOs’ awareness and management level are still limited and legal sanctions are not yet strict, so when they have power in their hands, CEOs immediately find ways to build a reputation to enhance the power and earnings for the CEOs themselves.

Research limitations/implications

The limitation of this study is first of all that the research data are not complete and rich because the companies are prohibited from disclosing information and the cooperation relationship is not close. Next is the new research in only one emerging market – Vietnam – so the generalizability is not high.

Originality/value

To the best of the authors’ knowledge, this is the first study to examine the impact of CEOs’ accounting and finance expertise on FRQ in an emerging economy, contributing to the existing literature regarding the scientific debates about CEOs, CEO characteristics, earnings management and FRQ.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 13 February 2024

Ajid ur Rehman, Asad Yaqub, Tanveer Ahsan and Zia-ur-Rehman Rao

This study aims to investigate earnings management practice of classification shifting of revenues in Chinese-listed firms.

Abstract

Purpose

This study aims to investigate earnings management practice of classification shifting of revenues in Chinese-listed firms.

Design/methodology/approach

The study employs a dataset of 2,920 A-listed firms from Chinese stock exchanges of Shanghai and Shenzhen for the period of 2003–2019. We apply both univariate and panel regression analysis by using fixed effect estimation with robust standard errors.

Findings

Our findings reveal that firms misclassify revenues by taking advantage of the flexibility provided by applicable financial reporting standards. The empirical evidence obtained through regression analysis suggest that managers reclassify non-operating revenues as operating revenue to alter the economic reality while seeking the advantage of financial reports users’ vulnerability for valuing the upper half of income statement items more as compared to lower part. The results further indicate that international financial reporting standards adoption inhibits the earnings management practices using classification shifting of revenues. It is also concluded that firms, which are suffering losses or having low growth, are more persistently involved in misclassification of revenues.

Originality/value

The study is unique from the point of view that it investigates earnings management from the prospective of revenue’s classification in an emerging market characterized by various market imperfections such as lower investor protection and higher information asymmetry.

Details

Journal of Accounting in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 11 May 2023

Md Jahidur Rahman, Jiadan Xuan, Hongtao Zhu and Md Moazzem Hossain

The purpose of this study is to determine the relationship between accounting fraud and corporate sustainability.

Abstract

Purpose

The purpose of this study is to determine the relationship between accounting fraud and corporate sustainability.

Design/methodology/approach

Companies listed on the Shenzhen Stock Exchange in 2019 are used to estimate a pooled ordinary least square regression model using panel data. Accounting fraud is represented by accounting disclosure, which is measured by its quality and timeliness, while corporate sustainability is measured by earnings management and corporate social responsibility.

Findings

Empirical findings support the hypothesis that the quality and timeliness of accounting disclosure have a statistically favorable impact on the management of company earnings and corporate social responsibility, respectively. Accounting fraud also has an impact on the sustainable development of the company.

Originality/value

Although the inferences of this study are limited to Chinese listed companies, this study may interest other scholars to explore similar topics.

Details

Journal of Financial Crime, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-0790

Keywords

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