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Article
Publication date: 1 March 2010

Abstract

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Journal of Public Budgeting, Accounting & Financial Management, vol. 22 no. 3
Type: Research Article
ISSN: 1096-3367

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Article
Publication date: 1 January 2000

Chong M Lau and Ian RC Eggleton

This research examines the interactive effect of accounting controls (Emphasis on meeting tight budget targets, External scanning, Results monitoring and Cost control) and…

Abstract

This research examines the interactive effect of accounting controls (Emphasis on meeting tight budget targets, External scanning, Results monitoring and Cost control) and task uncertainty on budgetary slack with a sample of 104 marketing and production managers. The results indicate that two accounting controls (Emphasis on meeting tight budget targets and External scanning) reduce the extent of budgetary slack creation in high task uncertainty situations, but not in low task uncertainty situations. Budgetary slack is lowest when the intensity of accounting controls and task uncertainty are both high. Whilst Emphasis on meeting tight budget targets has a significant effect on slack for both the production and marketing managers, External scanning has a significant effect only for the marketing managers.

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Asian Review of Accounting, vol. 8 no. 1
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 14 November 2019

Susana Jorge, Maria Antónia Jorge de Jesus and Sónia P. Nogueira

The purpose of this paper is to research the use of accounting information by politicians. Based on the Portuguese Parliament setting, it seeks to understand how useful…

Abstract

Purpose

The purpose of this paper is to research the use of accounting information by politicians. Based on the Portuguese Parliament setting, it seeks to understand how useful politicians consider this information to be, what type of budgetary and financial information they use, and for what purposes. Finally, the research also seeks to find out whether politicians resort to expert intermediaries or advisors help them in the use of this information.

Design/methodology/approach

Following a qualitative and interpretative methodology, the study draws upon interviews with Members of Parliament in Portugal (and their technical advisors (TAs)) from all political parties, in particular the members of the Budget, Finance and Administrative Modernization Committee (COFMA) of the Parliament.

Findings

Research shows that, due to the general lack of knowledge and the complexity of the accounting information, politicians in the Parliament do not use it frequently, only occasionally. To be better or worse informed for the debates and other activities depends on each Member of Parliament’s personal willingness to prepare oneself, notwithstanding some aggregated and previously analyzed information made available by official technical support units. Parliamentarians may also resort to TAs, who prepare the information at their request. Both intermediaries and TAs are deemed important to support parliamentarians’ understanding of more technical budgetary and financial issues.

Practical implications

This paper shows that politicians acknowledge there is room for improving the role of information intermediaries and advisors, who would support them to better understand and use accounting information. Parliamentary groups incharge of hiring advisors, as well as accounting professionals, in Portugal and in other countries, must be aware of the very useful role accountants play in this process.

Social implications

While allowing to understand whether and how politicians use accounting information, this research contributes to the process of public sector accounting reforms in Portugal, and at an international level, inasmuch as public sector accounting and reporting standards should better address these users’ information needs. Assuming that these reforms would foster more accurate, transparent and useful information for accountability and decision making, it is essential that politicians acknowledge and become real users of accounting information, in order to accomplish those objectives.

Originality/value

This study contributes to the general knowledge of how politicians use accounting information. Academic studies so far have not gathered enough evidence about the type of accounting information that is actually important for politicians. This paper highlights that use of such information by politicians depends on individual skills and their willingness to receive the appropriate advice.

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Journal of Public Budgeting, Accounting & Financial Management, vol. 31 no. 4
Type: Research Article
ISSN: 1096-3367

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Article
Publication date: 8 October 2019

Adriana Tiron-Tudor, Cristina Silvia Nistor and Cristina Alexandrina Stefanescu

The purpose of this paper is to approach, both theoretically and empirically, public sector reporting at European Union (EU) level. It contributes to the accounting

Abstract

Purpose

The purpose of this paper is to approach, both theoretically and empirically, public sector reporting at European Union (EU) level. It contributes to the accounting harmonisation literature by revealing the actual status of governmental reporting at the national level.

Design/methodology/approach

The paper carried out an exploratory data analysis of the harmonisation of statistical, budgetary and financial reporting at the EU level. A mapping visualisation offers a comprehensive overview of the current state of connections between these reporting systems.

Findings

The results reveal the complexity of governments’ reporting systems homogeneity, although all stakeholders recognise the struggle for the principles of performance and transparency in the public sector. Thus, these are following the EU Commission’s study, which concludes that there is significant heterogeneity in the accounting and reporting practices applied transversely throughout all Member States.

Research limitations/implications

The relevance of the study is comprehensive, from the economic environment to the practitioners, from the international regulatory bodies to the national ones, all can assess and quantify the significance of the past, present and future changes, considering their needs. The limitations of the research regard the documentation background because uniformly accessing some information presented by the EU Member States is relatively tricky. Future research might focus on the effects of these changes as they occur.

Originality/value

The study contributes to the scientific literature in the public sector through a comprehensive, well-supported and statistically grounded analysis performed at EU level, able to provide reliable results and to support valuable future recommendations towards harmonised reporting. Moreover, it supports and encourages all national and international efforts for improving the comparability of financial, budgetary and aggregated statistical reports.

Details

International Journal of Public Sector Management, vol. 33 no. 2/3
Type: Research Article
ISSN: 0951-3558

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Article
Publication date: 13 February 2017

Sónia Paula da Silva Nogueira and Susana Margarida Faustino Jorge

The purpose of this paper is to analyse the extent to which the perceived usefulness of financial information for internal decision making is affected by the internal…

Abstract

Purpose

The purpose of this paper is to analyse the extent to which the perceived usefulness of financial information for internal decision making is affected by the internal control to which that information is subjected.

Design/methodology/approach

The research is positivist and quantitative, based on a cross-sectional analysis developed in the local government context. Data were collected from a survey to decision makers (politicians and chief officials) in charge of the financial area in all Portuguese municipalities. The response rate was approximately 49 per cent, assuring representativeness.

Findings

Regarding the perceived usefulness of financial and budgetary reporting for internal decision making, the results in the paper show that municipalities’ internal users’ attitudes towards using accrual-based financial reporting for decision making is changing. Additionally, internal decision makers consider financial and budgetary information as very useful for decision making, and the different types of internal control applicable to that information as very important. The results also clearly point to the existence of a significant and positive relationship between the internal control (including internal auditing) to which financial and budgetary information is subject, and its perceived usefulness for municipal decision making.

Research limitations/implications

The main limitations of this study are related to the way in which information was collected in order to obtain empirical evidence. The questionnaire, sent by e-mail, despite reaching a wide-range and dispersed population, cannot guarantee the truthfulness and integrity of the responses. Findings might have been affected by the fact that respondents may have been sympathetic to the reforms brought by the Official Local Government Accounting Plan (POCAL). Certainly, politicians linked to the political party that promoted those reforms would be predisposed in this way. Another limitation might concern the fact that new laws and regulations passed after POCAL, might have somehow affected the answers regarding the perceived usefulness of budgetary and financial information for internal decision making, as well as the importance of the internal control to which that information is subject.

Practical implications

The results of this study have important repercussions for the implementation of internal control systems at local government level. Particularly, they highlight the need to develop or improve internal control procedures to ensure budgetary and financial information reliability, which in turn determines its usefulness for decision-making purposes.

Originality/value

This research makes a contribution to the (scarce) literature on the relationship between internal control and the perceived usefulness of financial and budgetary information for decision making, particularly in the local government setting. It adds with further empirical evidence concerning the relationship between these two issues, helping to reinforce previous embryonic research in this field. As to policy making, this research also contributes by calling attention for the need to define the types of internal control financial information must be subject, a critical issue while assuring the usefulness of that information for decision making. This is particular important in current contexts of countries moving towards IPSAS-based financial reporting systems.

Details

Journal of Applied Accounting Research, vol. 18 no. 1
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 1 March 2010

Isabel Brusca and Vicente Montesinos

In recent years, most Organisation for Economic and Cooperation Development (OECD) countries have brought in important reforms into their public accounting systems with…

Abstract

In recent years, most Organisation for Economic and Cooperation Development (OECD) countries have brought in important reforms into their public accounting systems with the objective of both improving public service management and increasing the transparency and accountability of governments. Reforms of government accounting share a common direction towards the implementation of accrual-based accounting systems. In this context, this paper presents the situation of local government accounting systems in European countries with the aim of showing the degree of uniformity/ heterogeneity that currently exists among the countries considered and why differences persist nowadays, trying to classify countries into groups according to accounting practice. Results show that three groups of countries can be identified: the first continues using the cash basis; in the second, an accrual or modified accrual basis is used for financial accounting but the cash basis still persists in the budgetary system; in the third, an accrual or modified accrual basis is used both in budget and in financial accounting.

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Journal of Public Budgeting, Accounting & Financial Management, vol. 22 no. 3
Type: Research Article
ISSN: 1096-3367

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Article
Publication date: 1 March 2007

Susana Margarida Jorge, João Baptista da Costa Carvalho and Maria José Fernandes

Until the end of 1997, governmental accounting in Portugal was characterised as essentially cash-based budgetary accounting, using singleentry as the bookkeeping method…

Abstract

Until the end of 1997, governmental accounting in Portugal was characterised as essentially cash-based budgetary accounting, using singleentry as the bookkeeping method. The only compulsory accounting system was Budgetary Accounting. As many countries all over the world, nowadays Portugal is implementing a reform of the whole governmental accounting, which has as most important innovations the use of double-entry within a system compulsorily integrating accrual-based Financial and Cost Accounting along with Budgetary Accounting (still essentially cash-based). The main purpose of this paper is to describe and analyse the reform and current situation of governmental accounting in Portugal, especially discussing the accrual basis implementation. In particular, it shows that not only governmental accounting reform in Portugal has been going towards international harmonization, but also problems that have arisen are common to others faced by several countries. Perspectives of future evolution are also presented.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 19 no. 4
Type: Research Article
ISSN: 1096-3367

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Article
Publication date: 1 March 2003

Bernardino Benito, Vicente Montesinos and José Manuel Vela

During the first half of the nineties, many accounting innovations and reforms have been introduced in Spanish governmental accounting. In this context, the purposes of…

Abstract

During the first half of the nineties, many accounting innovations and reforms have been introduced in Spanish governmental accounting. In this context, the purposes of this paper are, on the one hand, to present the main features of local financial reporting legal requirements, which are very close to the central state accounting regulations, as well as real accountability and quality of reported information. On the other hand, this paper looks for an analysis of the main differences and similarities of accounting regulation among Spanish regional governments, identifying practices and users' expectations, as the result of a survey developed by the authors.. Also presented are some proposals concerned with a possible harmonised accounting and reporting common framework, in order to maintain the traditional homogeneity that has characterised the past governmental accounting system in Spain.

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Journal of Public Budgeting, Accounting & Financial Management, vol. 15 no. 1
Type: Research Article
ISSN: 1096-3367

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Article
Publication date: 1 February 2001

Simon TW Leung and Samuel YS Chan

Using a contingency approach, this study examines the moderating effects of personality and compensation schemes on the budgetary participation ‐ performance relationship…

Abstract

Using a contingency approach, this study examines the moderating effects of personality and compensation schemes on the budgetary participation ‐ performance relationship. The data collected from a random sample of 303 chartered management accountants in Hong Kong was used to test three hypotheses. Multiple regression analyses found that both personality and compensation schemes interacted singly as well as jointly with budgetary participation in affecting performance. Post‐hoc tests further reveal that managers who perform better when they are highly participative in budget processes, are internally‐oriented, and receive a high variable‐pay income. The results are of interest not only to researchers but also to practitioners in management selection, job placement, and compensation package designs.

Details

Asian Review of Accounting, vol. 9 no. 2
Type: Research Article
ISSN: 1321-7348

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Book part
Publication date: 17 July 2015

William W. Stammerjohan, Maria A. Leach and Claire Allison Stammerjohan

This study extends the budgetary participation–performance/cultural effects literature by isolating and examining the moderating effect of one cultural dimension, power…

Abstract

Purpose

This study extends the budgetary participation–performance/cultural effects literature by isolating and examining the moderating effect of one cultural dimension, power distance, on the budgetary participation–performance relationship. Isolating the impact of power distance is important to this literature because of the fact that participative budgeting remains a possibly underutilized management tool in high power distance countries.

Methodology/approach

We regroup our multinational sample of managers by power distance level, and employ multigroup structural equation modeling (SEM) and a set of nonparametric bootstrap tests to triangulate our findings.

Findings

We find that the majority of our managers from three high power distance countries (Mexico, Korea, and China) score in the lower half of the power distance scale, that there is significant correlation between participation and performance in both the high and low power distance subsamples, but that the mechanisms connecting participation to performance are quite different. While job satisfaction plays a role in connecting budgetary participation and performance among low power distance managers, job relevant information alone connects budgetary participation and performance among their high power distance counterparts.

Originality/value

The primary contribution of our work is that we not only demonstrate that budget participation can improve the performance of subordinate managers in high power distance cultures, but also provide evidence of how and why this is plausible. First managers may not share the same high power distance tendencies of their countrymen, and second, the communication aspect of budget participation appears to be more important for increased performance among those with high power distance tendencies.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-78441-650-8

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