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Conformity and diversity of accounting and financial reporting practices in Portuguese local government
Author(s) -
da Costa Carvalho João Baptista,
Camões Pedro J.,
Jorge Susana Margarida,
Fernandes Maria José
Publication year - 2007
Publication title -
canadian journal of administrative sciences / revue canadienne des sciences de l'administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 48
eISSN - 1936-4490
pISSN - 0825-0383
DOI - 10.1002/cjas.1
Subject(s) - accounting , accrual , conformity , diversity (politics) , portuguese , financial accounting , accounting standard , business , sample (material) , compliance (psychology) , local government , accounting information system , political science , earnings , psychology , social psychology , linguistics , philosophy , chemistry , public administration , chromatography , law
Portuguese governmental accounting has evolved from essentially a cash‐based budgetary accounting system to an accrual‐based financial and cost accounting system. Evidence from financial reports shows a great level of diversity amongst municipalities' voluntary compliance with the new accounting rules. Using a sample of Portuguese municipalities in the year 2003 we calculate and analyse the levels of compliance with the practices required by law and document the diversity in compliance across municipalities. The differences across municipalities are explained by some fundamental factors: size, financial conditions, urban characteristics, and diffusion across neighbouring municipalities. We show an unexpected effect of size. Larger municipalities comply less with accounting standards. Organizational complexity, conservative practices, and aversion to change may explain this result. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.

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