Preface

Political Influence and Governmental Financial Reporting.

“…However, the general notion of political influence on financial reporting outcomes is predicted on the assumption that the complexities of financial reporting disclosures are motivated by the incentives of account preparers' and power of the users of the financial information. This has been well illustrated in the work of Giroux (1989), Baber et al (1986), Ingram (1984), Carpenter (1987), where the key actors in the political competition were identified to include: bureacrats (preparers), voters, elected officials and special interest group (e.g. employee).…”

“…Ingram (1984), provided evidence on the association between economic factors and cross-sectional variations in accounting practices of state governments with specific interst on determining the characteristic of states that report quality accounting information and compliance with GAAP. This was extended by Carpenter (1987), using economic interest group theory developed a positive theory of governemrnt to examine the influence of political competition on governemnt financial disclosure practices.…”

“…Moreover, Zimmerman (1977) describes influence of political interest group on financial reporting as the interrelationship between preparers incentives to produce quality information and users power to demand for needed information. This implies that, financial information needs of potential users are appropriately disclosed according to the extent of their power to influence the political system (Carpenter, 1987). For example, voters information needs are to be satisfied by the elected officials through decision taken in respect of the annual operating budget submitted by the prepaers (Giroux, 1989).…”