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1 – 10 of 654Ivana Pajković, Nives Botica Redmayne and Vesna Vašiček
This study analyses to what extent politicians use public sector entities' financial statements along with the politicians' perceptions of the usefulness of such statements in the…
Abstract
Purpose
This study analyses to what extent politicians use public sector entities' financial statements along with the politicians' perceptions of the usefulness of such statements in the politicians' decision-making. The authors analyze financial statements' use and usefulness when the statements are prepared on a modified accrual basis and in the setting where there is the intention of full accrual accounting adoption. In addition, this study provides information about the use of the individual components of financial statements and investigates the reasons why the statements may not be used.
Design/methodology/approach
This study was conducted using a questionnaire. The authors surveyed politicians that are members of Croatian public sector bodies. To conduct this research, the politicians were contacted by telephone over the period from February to April 2022.
Findings
The findings of this study are of potential interest to researchers, regulators and policy makers. The findings show that most politicians use financial statements, but the politicians' perception of the statements' usefulness when the statements are prepared on a modified accrual accounting basis is greater than the politicians' actual use of the statements. The findings also show that in the process of making decisions, politicians use the selected financial statements that contain information of interest to the politicians; that the politicians tend to gravitate to the use of reports on revenue, expenses, receipts and expenditure prepared on modified accrual bases which are closer to budgetary reporting; that the politicians use the information that supports the politicians' sphere of responsibility as enforced by legislation.
Originality/value
This study provides insights into the use and usefulness of financial statements in public sector setting where modified accrual accounting is used to prepare the statements and reports. This study provides additional evidence on the significance of legal setting to the financial reporting in public sector.
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This study aims to fill the research gap regarding the usability of group reporting information in the central government. It answers the question of how the consolidated…
Abstract
Purpose
This study aims to fill the research gap regarding the usability of group reporting information in the central government. It answers the question of how the consolidated information should be formed to benefit the real needs of governmental information users.
Design/methodology/approach
The empirical research is based on a survey and interviews among key internal preparers and users in the central government sector in the case country, Finland.
Findings
Results show that the private sector approach regarding consolidation is not appropriately transferable to the central government sector. The key stakeholders identified several economic and financial reporting needs that exceed what formal Consolidated Financial Statement (CFS) can offer. Consolidation is needed but not according to the extensive full control approach, but rather following the budgetary approach consolidating units of the legal person of the government, and further using the partial control approach for consolidating by discretion essential special purpose SOEs.
Research limitations/implications
Respondents and interviewees represented governmental internal organisations, free experts, auditors and financial managers from the group entities. Politicians and citizens were not directly represented.
Practical implications
Research gives applicable insights into central governments planning and developing group reporting for information needs in a favourable cost-benefit ratio. Findings benefit the development of EU's EPSAS (European Public Sector Accounting Standards) project which is still incomplete.
Social implications
Research recommends governments to make a thorough analysis before deciding on a new financial reporting system. A critical analysis prevents governments to waste money and resources on a reporting system not fulfilling the real needs of information users.
Originality/value
The value of this research is that the private sector approach in consolidation was not taken as granted. This study investigated critically and empirically the real need for consolidated information serving steering and overseeing purposes of the government's group entities.
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Timothy C. Miller, Sean A. Peffer and Dan N. Stone
This study contributes to the participative budgeting and budget misrepresentation literature by exploring: (1) whether managers’ judgments of fair behaviors are malleable and…
Abstract
This study contributes to the participative budgeting and budget misrepresentation literature by exploring: (1) whether managers’ judgments of fair behaviors are malleable and context-dependent and (2) if these judgments of fair behavior impact cost reporting misrepresentations. Two experiments investigate these questions. Experiment 1 (n = 42) tests whether the behavior that managers judge to be “fair” differs based on the decision context (i.e., initial economic position [IEP]). Experiment 2 (n = 130) investigates: (1) how managers’ deployment of fairness beliefs influences their reporting misrepresentations and (2) how decision aids that reduce task complexity impact managers’ deployment of fairness beliefs in their misreporting decisions. The study found that managers deploy fairness beliefs (i.e., honesty or equality) consistent with maximizing their context-relevant income. Hence, fairness beliefs constrain misrepresentations in predictable ways. In addition, we find more accounting information is not always beneficial. The presence of decision aids actually increases misrepresentations when managers are initially advantaged (i.e., start with more resources than others). The implications from these findings are relevant to the honesty and budgeting literature and provide novel findings of how managers’ preferences for fairness constrain managers from maximizing their income. The chapter demonstrates that contextual factors can influence the deployment of managers’ fairness beliefs which, in turn, differentially impact their reporting misrepresentation. Another contribution is that providing decision aids, which reduce task complexity, may not always benefit companies, since such aids may increase misrepresentation under certain conditions.
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Maxence Postaire and François-Régis Puyou
This research interrogates how the construction of narratives and accounting forecasts contributes to managing the emotional state of actors involved in reporting meetings by…
Abstract
Purpose
This research interrogates how the construction of narratives and accounting forecasts contributes to managing the emotional state of actors involved in reporting meetings by promoting discourses of hope in their organization's future, mitigating their anxiety. This study shows how narratives are built from multiple antenarratives and accounting forecasts, which restore and strengthen organizational actors' commitment to their organizations. This study contributes to a better understanding of the role played by narratives and accounting documents in mitigating organizational members' anxiety.
Design/methodology/approach
Over eight months, an interventionist research design method gave one of the authors the opportunity to record discussions held during reporting meetings in a business incubator. These recordings captured the production of narratives and forecasts in these meetings.
Findings
This study shows how the production of multiple antenarratives and accounting forecasts helps organizational actors who attend reporting meetings mitigate the anxiety triggered by disappointing performance figures and restore collective discourses full of hope for the organization's future. This case highlights how personal antenarratives and successive versions of accounting forecasts contribute to restoring a collective commitment to a failing organization.
Originality/value
This study refines current understanding of the under-explored links between accounting forecasts, narratives and anxiety management. The study provides insight into how accounting practices contribute to the production of narratives that successfully restore organizational members' commitment to working for a failing organization. The study also exemplifies the original insights gained from interventionist research protocols.
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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.
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Ethiopia has enacted laws on transparency and disclosure of information in state-owned enterprises (SOEs). However, these laws are not strict enough, with the transparency and…
Abstract
Purpose
Ethiopia has enacted laws on transparency and disclosure of information in state-owned enterprises (SOEs). However, these laws are not strict enough, with the transparency and disclosure practices disappointing in the country. Thus, this study aims to investigate the legal framework governing transparency and disclosure in SOEs.
Design/methodology/approach
This study uses doctrinal, qualitative and comparative approaches. Domestic legal texts are appraised based on the organization for economic co-operation and development Guideline on Corporate Governance of State-owned Enterprises, the World Bank Toolkit on Corporate Governance of State-owned Enterprises and best national practices. This approach has been further corroborated by qualitative analysis of the basic principles of transparency and disclosure.
Findings
The finding reveals that the laws on transparency and disclosure do not comply with global practices and are inadequate to ensure transparency and discourse in SOEs. They fail to establish appropriate disclosure frameworks and practices at the SOE and state-ownership entity levels. They also indiscriminately subject enterprises to multiple auditing functions and conflicting responsibilities.
Originality/value
To the author’s knowledge, this study is the first legal literature on transparency and disclosure in Ethiopian SOEs. This study assists the state as owner in reforming the laws and uplifting SOEs from their current unpleasant condition. It can also become a reference for future research.
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Fabiano Siqueira de Oliveira, Octávio Ribeiro de Mendonça Neto, Jose Carlos Tiomatsu Oyadomari and Claudio de Araújo Wanderley
This study aims to explore how management accounting practices act as drivers of organizational change in situations of institutional complexity.
Abstract
Purpose
This study aims to explore how management accounting practices act as drivers of organizational change in situations of institutional complexity.
Design/methodology/approach
A case study was carried out in a small company with a strongly rooted social culture, which was acquired by a large conglomerate and underwent a process of strategic change as part of a new control logic. Based on this, the study analyzes the evolution of this change, with a particular focus on the efforts to construct the meaning of the performance through the inscription of objects from the cultural system to which it is attached and the “situated rationality” of the managers who are involved in its production.
Findings
The authors show how managers link their own concepts of performance to accounting practices. At the same time, the authors show how accounting practices unfold through representational gaps that their production generates.
Research limitations/implications
This study acknowledges that bias may arise from reliance on retrospective views of past processes and events, gathered primarily through interviews, documentation and observations.
Practical implications
This study highlights that the way in which the performance concept is presented by accounting practices can have a constructive effect on the organization through the aspirations that its representations entail, thus having the potential to stimulate change in organizations.
Originality/value
This study contributes to the organizational literature by clarifying that accounting practices drive change by providing spaces for debates and questions that affect the way organizations understand and report their performance.
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The purpose of this chapter is to examine the budgeting process in a local church from a social capital perspective. The social capital provides novel insights into the…
Abstract
The purpose of this chapter is to examine the budgeting process in a local church from a social capital perspective. The social capital provides novel insights into the construction of budgets and its social aspects. A qualitative case study was adopted, with an interpretive methodology. Semi-structured interviews were used to interview 14 managers involved in the budgeting process at a local independent church. The interview data were supplemented by documentary evidence. Nahapiet and Ghoshal (1998) framework of social capital was used to analyse the data. The main finding was that budgeting was found to be a social process – that can best be explained by social capital theory. There may be an element of self-selection, as the church agreed to participate in the study and chose to allow a researcher to examine social aspects of its budgeting process. The chapter contributes to both social capital theory and church literature. Social capital provides novel insights into the construction of budgets and its social aspects. In addition, contemporary budgeting practices are studied in a church in a denomination and country not previously studied.
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Elodie Allain, Samuel Sponem and Frederic Munck
For many years, universities have been confronted with the rise of a managerial logic, in line with the new public management movement. They have been encouraged to implement new…
Abstract
Purpose
For many years, universities have been confronted with the rise of a managerial logic, in line with the new public management movement. They have been encouraged to implement new accounting tools such as cost calculations. Literature shows mixed results regarding the institutionalization of such tools, and the logic they try to support. In most studies, the agency of actors is examined to explain the institutionalization of accounting tools and only few studies consider the specific characteristics of these accounting tools to understand this process. To enrich the literature on institutionalization, this article examines how the affordances of costing tools affect the institutionalization of these tools and the institutionalization of new logics in pluralistic organizations such as universities.
Design/methodology/approach
The data were collected at a French university which is considered as an example of successful institutionalization of the tool and is cited as a model to follow. The data include a four-month participant observation and 18 interviews. Access to internal and external documents was also available. The analysis of the data is based on a framework proposed by Jarzabkowski and Kaplan (2015), which draws on the concept of affordance of tools, to investigate how the possibilities and constraints of costing tools shape the selection, application and outcomes of cost calculations.
Findings
The results show that the affordances of cost calculations facilitate the institutionalization of a new logic and its coexistence with previous logics. Technical affordances are mobilized by actors aiming to bring in a new logic without directly confronting the old ones. Role affordances also play a major role in the institutionalization by facilitating the adhesion of the actors through multiple applications of the tool. Finally, value-based affordances reinforce the institutionalization of a managerial logic by emphasizing the values shared with the other logics and thus facilitating the coexistence of the three logics at stake in the university.
Originality/value
This research provides three main contributions. First, it contributes to the literature on the institutionalization of accounting tools. It shows the relevance of the concept of affordance (Leonardi and Vaast, 2017) to unpack the characteristics of accounting tools (including the constraints and the possibilities they offer) and to achieve a better understanding of the institutionalization of accounting tools. Second, this paper contributes to the literature dealing with the role of accounting tools in the institutionalization of logics. The results suggest that the institutionalization of tools and the institutionalization of logics are two different phenomena that move at different speeds. However, these phenomena interact: the institutionalization of accounting tools can facilitate the coexistence of different logics in pluralistic organizations. Third, this paper contributes to the literature on affordances. The data reveal several types of affordances for accounting tools: technical affordances that refer to the technical possibilities to shape and tweak the tool; role affordances that refer to the various roles and purposes that the tool can fulfill and value-based affordances that refer to the plasticity of the values and beliefs that the tool can convey. The study shows that each type of affordance is prevalent at a different time of the process of institutionalization and that the combination of these affordances contributes to the institutionalization of the tool and of new logics.
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Ali Falaah Hassan and Rohaida Basiruddin
This study aims to investigate the influence of budgetary participation on budget quality on top of the moderating role of environmental uncertainty on the said relationship.
Abstract
Purpose
This study aims to investigate the influence of budgetary participation on budget quality on top of the moderating role of environmental uncertainty on the said relationship.
Design/methodology/approach
The objectives of the current study were achieved through a survey conducted in 15 Iraqi states. Each state contains several municipalities. In total, 180 survey forms were disseminated to the heads of the municipalities, where ultimately 155 questionnaires proceeded to the data analysis stage. In this stage, statistical package for social sciences, analysis of moment structure and structural equation modelling were used to solve the research problem and achieve the objectives.
Findings
Through the results of the statistical analysis, this study concluded the significant and positive effect of budgetary participation on budget quality. In addition, the study confirmed the moderating role of environmental uncertainty in weakening the positive relationship between budgetary participation and budget quality.
Originality/value
The findings can be used to encourage municipal institutions and local governments to expand on the factor of employee participation in affecting the process of budget determination, hence mitigating budget failure.
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