Loading…
Analysing the accounting measurement of financial sustainability in local governments through political factors
Purpose The purpose of this paper is to obtain new knowledge about the accounting measurement of financial sustainability in local governments, by studying the influence of political factors on the evolution of income statements. Design/methodology/approach This paper analyses income statements of S...
Saved in:
Published in: | Accounting, auditing & accountability journal auditing & accountability journal, 2018-11, Vol.31 (8), p.2135-2164 |
---|---|
Main Authors: | , , , |
Format: | Article |
Language: | English |
Subjects: | |
Citations: | Items that this one cites Items that cite this one |
Online Access: | Get full text |
Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
Summary: | Purpose
The purpose of this paper is to obtain new knowledge about the accounting measurement of financial sustainability in local governments, by studying the influence of political factors on the evolution of income statements.
Design/methodology/approach
This paper analyses income statements of Spanish municipalities from 2006 to 2014, together with mayor profiles and political-institutional factors, using the generalised method of moments system.
Findings
The income statement represents a useful measure to assess financial sustainability, showing the effect of political factors on three dimensions proposed by IFAC (i.e. service, revenue and debt), such as ideological coincidence, political competition, political ideology, and absolute majority or political fragmentation.
Practical implications
The findings can be useful for policymakers and accountants responsible for accountability, supervisory bodies, fiscal authorities, voters, users of public services and other stakeholders interested in governmental income statements.
Social implications
In the Eurozone, the crisis of government finance has made the citizens and the policymakers question the size and volume of public services. Likewise, in countries such as Spain, politicians remain one of the main problems for citizens. These circumstances make it very interesting and timely to study the accounting measurement of financial sustainability and its political explanations.
Originality/value
The findings provide new empirical evidence about the accounting measurement of financial sustainability in local governments, and they identify political factors that influence the evolution of income statements. |
---|---|
ISSN: | 0951-3574 1758-4205 |
DOI: | 10.1108/AAAJ-10-2016-2754 |