Popular Financial Reports as Fiscal Transparency Mechanisms: An Assessment Using the Fiscal Transparency Index for the Citizen User

Abstract

Popular financial reports (PFRs) are intended to increase transparency by providing financial information to a non-technical, citizen audience. We examine the extent to which PFRs are meeting the goal of transparency by developing a 23-criteria fiscal transparency index for the citizen user (FTI-CU) and applying it to a sample of PFRs (popular annual financial reports and citizen-centric reports) issued by local governments in the U.S. These criteria are organized into five areas: comprehension, access, financials, appearance, and community-focused. The analysis finds that, while there are areas for improvement, the PFRs rated the highest in the access and appearance criteria.

Sustainability, Popular and Integrated Reporting in the Public Sector: A Fad and Fashion Perspective

“…It is based on the assumption that average citizens find typical governmental financial statements too long, complicated, and confusing [44]. It is mainly diffused in North-America (the US and Canada in particular), and the scholarly interest in the topic has been limited so far (for notable exceptions see [8,29,52,53].…”

Accessibility of the Management's Discussion and Analysis to Citizen Users of Government Financial Reports

“…Guidelines from citizen focus groups conducted by Yusuf and Jordan () identified newspaper‐level readability as appropriate for a citizen audience. The fiscal transparency index developed by Jordan et al () characterized comprehension needs for the lay audience of financial reports as being readability below 10th grade level. Yusuf and Jordan () tested this comprehension level using a student laboratory and found that more than 52 percent of laboratory participants found the readability of a sample report written at approximately 10th grade level to be “just right.” In contrast, 22 percent and 26 percent found it simplistic or complicated, respectively.…”

“…Popular financial reports, defined as financial reports distributed to citizens and other interested parties who lack a background in public finance but who need or desire a less detailed overview of the government's financial activities (Yusuf and Jordan ), have the explicit purpose of targeting the citizens and increasing their understanding of financial information. Analysis by Jordan et al () of popular reports as tools for fiscal transparency found that these reports meet many of the accessibility criteria used to assess MD&As.…”

The Popular Financial Reporting for Hybrid Organization: A Solution to A Tricky Accounting Problem

“…The literature on popular financial reporting highlights various topics. Therefore, this report can influence the non-financial information and the social value that intangibles acquire on the territorial context of reference (P. Biancone et al, 2016Groff & Pitman, 2004;Jordan, Yusuf, Berman, & Gilchrist, 2017;J.-E. Yusuf, Jordan, Neill, & Hackbart, 2013;J.-E. W. Yusuf & Jordan, 2012).…”