Compliance reporting decisions in municipal audits: the impact of budget variance and employment sector

Abstract

Governmental auditors must report on compliance with laws and regulations if such noncompliance has a material impact on the financial statements. Little is known about what factors impact a governmental auditor’s reporting decisions. This study examines reporting decisions regarding violations of the Louisiana Local Government Budget Act. Study participants included private practitioners and employees of the Legislative Auditor. Subjects were asked where they would report Budget Act violations under differing degrees of noncompliance. Budget variance and employment sector impacted compliance reporting decisions. At higher levels of budget variance, higher levels of reporting were used. Legislative auditors were found to report at higher levels than private practitioners. They apparently viewed non-compliance as black-and-white; any level of noncompliance was reported in the compliance report. Private practitioners, however, applied a materiality test.

An exploratory study assessing compliance among municipal controllers and the possible explanations for their degree of compliance

“…A lot of research has been carried out into the way changes to financial legal provisions are applied in organizations (Burns & Scapens, ; Carpenter & Feroz, ; Robalo, ), and into ethical issues related to the impact of management earnings on results (Merchant & Rockness, , p. 92, Kaplan, ), and there is also a lot of information available on the integrity of civil servants (de Graaf & Strüwer, ; Jones & Beattie, ). However, the degree of compliance in public controllers' activities has never been explicitly analysed (Anderson & Maks, ; Kidwell, ; Knoop & van de Ven, ; Lin et al, ; van de Ven, ; Verstegen, de Loo, Mol, Slagter, & Geerkens, ).…”

Qualified Audit Reports of Local Authorities in the Northern States of Malaysia

“…In Malaysia, accountability issues are emphasised in the Federal Constitution 1957, Financial Procedure Act 1957 and Audit Act 1957. Accountability in the public sector is argued to be more crucial than in the private sector due to the involuntary nature of funding for governmental activities and the types of activities that are being funded (Kidwell, 1999;Nichol & Taylor, 2001). Effective accountability in practice, according to Boyne and Law (1991), is virtually impossible without accurate information on the local authority's performance.…”

Tussen creatief en compliant

“…Hoewel vrij veelvuldig onderzoek is verricht naar de manier waarop veranderingen in financiële wettelijke bepalingen worden doorgevoerd binnen een organisatie (Robalo 2014;Burns and Scapens 2000;Carpenter and Feroz 2001), naar ethische vraagstukken gerelateerd aan resultaatbeïnvloeding (Merchant and Rockness 1994, p. 92;Kaplan 2001) en ook veelvuldig onderzoek voorhanden is naar integriteit onder ambtenaren (De Graaf and Strüwer 2014), is minder onderzoek uitgevoerd naar specifiek de mate van compliance bij gemeentelijke controllers of interne auditdiensten en de factoren die deze mate kunnen verklaren (Kidwell 1999;Lin et al 1993). Uiteraard stellen accountants bij de controle van de gemeentelijke jaarstukken hun verslagen op, maar deze verslagen hebben betrekking op het gecontroleerde boekjaar van de desbetreffende gemeente.…”