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This paper aims to examine how proportional appropriation systems affect the quality of financial reporting in entities controlled by local governments.

The authors examine this issue using the setting of Italian municipally owned entities (MOEs) following the implementation of a new accounting regulation that limits the spending power of the participating municipality when the owned entity reports losses. The authors apply Benford's law on net income figures using the Chi-square and Z-tests on the adjusted version of the Mean Absolute Deviation (MAD) criterion to spot any sign of low data quality. The sample, which consists of 2,120 MOEs, covers the years 2010–2019 and is evenly divided into the periods pre- and post-policy introduction.

Widespread data anomalies were detected following the introduction of the new regulation for MOEs controlled by local governments. Evidence is stronger for entities owned entirely by municipalities. The results suggest that the extent of data manipulation grows as the municipality's ownership stake increases, consistent with the hypothesis that a decrease in spending power through the appropriation of financial resources affects earnings management practices in municipally controlled entities.

This paper sheds light on government-based accounting policies by documenting evidence of somewhat inefficient responses by those responsible for the preparation of financial statements on behalf of municipally owned entities, and, accordingly, insights are provided to help review these policies so as to forestall even indirectly detrimental repercussions on public services.

This paper extends prior research in public-sector earnings management by being the first to test whether MOEs manipulate their earnings as a consequence of participating municipalities' reduced spending capability. Understanding factors influencing earnings management practices driven by governments, other than political incentives, is still an open issue.

With the aim to enrich the ongoing debate about healthcare management, the paper has a twofold intent: [1] to emphasise the interpretative contribution that intellectual capital can provide to a better understanding of the relevant role of patients in the healthcare sector and [2] to investigate the relationships between the three main dimensions of intellectual capital – human capital, relational capital and structural capital – and patient satisfaction in the healthcare sector.

The intellectual capital framework is contextualised in the healthcare sector, and the relationships among patient evaluations of human capital, relational capital and structural capital and patient satisfaction are tested via structural equation modelling (SEM) using primary data collected with reference to a sample of 561 Italian patients involved in post survey treatments in three Italian hospitals.

The role of intellectual capital in supporting a better understanding of processes and dynamics of patient satisfaction in the healthcare sector is underlined. The empirical research provides possible guidelines for recovery patients centrality in healthcare management.

The paper shows how an intellectual capital framework can support a better understanding and management of dynamics and processes through which patient centrality and satisfaction in healthcare management can be enforced.