A contingency theory perspective on the analysis of central government accounting disclosure under International Public Sector Accounting Standards (IPSAS)

Abstract

Purpose The purpose of this paper is to assess the extent of central government financial information disclosed in accordance with accrual-based International Public Sector Accounting Standards (IPSAS) and to investigate the environmental factors affecting this level, drawing on the contingency theory framework. Design/methodology/approach This study uses a self-constructed checklist of 116 items to measure the IPSAS disclosure level by 100 public sector entities from different countries across the globe during the period 2015–2017. Panel regressions have been used. Findings The results show significant differences in compliance levels with IPSAS disclosures across nations. They reveal a positive influence of the degree of government openness (political culture), quality of public administration and management and prior experience with International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) in the public sector on this level, whereas government financial condition is a nonsignificant factor. Practical implications The research findings are potentially relevant to academics, researchers, practitioners, standard-setters and government policymakers. By examining the influencing factors of IPSAS disclosure level, this paper paves the way for further investigation of this topic with a more extensive set of micro and macroeconomic variables whether at the central or local government level in other jurisdictions Originality/value This study provides new insights into the assessment of the transparency and completeness of government accrual-based financial statements. Based on the contingency theory, this paper is the first to empirically investigate the factors affecting the level of disclosure under accrual-based IPSAS by central government entities in a cross-country analysis.

The magic of IPSAS accrual: the real without reality

“…The existing IPSAS literature shows constraints in IPSAS accrual implementation. The first view is that IPSAS accrual is constrained by contextual factors, such as political support (Boolaky et al, 2020;Harun and Robinson, 2010;Mnif and Gafsi, 2020), inadequate knowledge (Harun and Robinson, 2010;Moretti, 2016;Sellami and Gafsi, 2020) and poor accounting and information systems (G omez- Villegas et al, 2020;Moretti, 2016). The second view is that IPSAS accrual itself is problematic.…”

“…Although accrual accounting is facilitated or constrained by cultural, political, legal and capacity factors (see, for example, Boolaky et al, 2020;G omez-Villegas et al, 2020;Mbelwa et al, 2019;Mnif and Gafsi, 2020), there are technical issues related to its implementation (see, for example, Anessi-Pessina et al, 2020;Lombardi et al, 2021;Ruz Far ıas, 2020;Vinnari and N€ asi, 2008). Some scholars have questioned the existing global approach of IPSAS accrual (see, for example, Anessi-Pessina et al, 2020;Baskerville and Grossi, 2019;Jayasinghe et al, 2021), while others have shown low levels of compliance (Harun et al, 2012).…”

Accrual Accounting at Different Levels of the Public Sector: A Systematic Literature Review

“…These studies examine areas which are within the classification for our review articles such as antecedents (Marwata and Alam 2006), implementation (Caperchione 2003;Christiaens 2003;Jorge et al 2007;Anessi-Pessina et al 2010;Harun et al 2012;Prabowo et al 2017;Sylvia et al 2018), effect (Caruana and Zammit 2019) or critique (Mol and de Kruijf 2003). A few examine issues such as whether PSAA should be adopted in China (Chang et al 2008) and the preparedness of PSAA adoption in Malaysia (Ismail et al 2018), while others are comparisons of PSAA implementation levels in developing countries such as Nepal and Russia (Timoshenko and Adhikari 2010) or comparisons of many countries (Chow and Pontoppidan 2019;Mnif and Gafsi 2020). The experiences of statutory authorities such as hospitals in Norway (Pettersen and Nyland 2011) and public universities in countries such as Thailand (Upping and Oliver 2012) and Italy ) are also examined.…”

“…2008) and the preparedness of PSAA adoption in Malaysia (Ismail et al. 2018), while others are comparisons of PSAA implementation levels in developing countries such as Nepal and Russia (Timoshenko and Adhikari 2010) or comparisons of many countries (Chow and Pontoppidan 2019; Mnif and Gafsi 2020). The experiences of statutory authorities such as hospitals in Norway (Pettersen and Nyland 2011) and public universities in countries such as Thailand (Upping and Oliver 2012) and Italy (Gigli et al.…”

The Determinants of Local Government Performance

“…This research adopted a contingency approach as proposed by previous studies (Goeminne & George, 2019;Mnif & Gafsi, 2020). The theory developed by Donaldson (1987Donaldson ( , 2006) stated several ways to improve organizational performance.…”