Vol. 6 (02) pp. 241-250 DOI: 10.21474/IJAR01/6434

POLITICAL INFLUENCE AND GOVERNMENTAL FINANCIAL REPORTING.

, and
  • Department of Local Government & Development Studies, Ahmadu Bello University, Zaria, Nigeria.
  • School of Accountancy, Collage of Business, Universiti Utara Malaysia, Malaysia.
  • School of Accountancy, Collage of Business, Universiti Utara Malaysia.
42 Downloads 184 Views
Crossref

Download Full Paper (PDF)

Abstract

Financial reporting quality (FRQ) refers to better information dissemination across different user groups. It remains a prevalent phenomenon for assessing organizations? performance and survival. Drawing on theoretical exigencies, this study tests the effects of political influence on FRQ using survey research approach and self-administered questionnaire. Data were gathered from 118 directors of finance representing local governments from four States at the north-west geopolitical zone of Nigeria. The regression estimate revealed a significant positive relation between political influence and FRQ. The study implication was discussed in the context of Nigeria.

Keywords

Article Analytics

References

  1. Ahmad, H. N. (2015). Effectiveness : Resource-based and institutional Perspectives. Australian Journal of Basic and Applied Sciences, 9(9), 95?104.
  2. Alijarde, M. I. B. (1997). The Usefulness of Financial Reporting in Spanish Local Governments. Financial Accountability & Management, 13(1), 17?34.
  3. Archidona, M. C., Gandı, J. L., Gand?a, J. L., & Archidona, M. C. (2008). Determinants of web site information by Spanish city councils. Online Information Review, 32(1), 35?57.
  4. Arthur, J. B. (2011). Do HR system characteristics affect the frequency of interpersonal deviance in organizations? The role of team autonomy and internal labor market practices. Industrial Relations, 50(1), 30?56. https://doi.org/10.1111/j.1468-232X.2010.00624.x
  5. Baber, W. R., Sen, P. K., & Paber, W. R. (1986). The political process and the use of debt financing by state governments. Public Choice, 48(3), 201?215.
  6. Bartov, E., Goldberg, S. R., & Kim, M. (2005). Comparative Value Relevance Among German, U.S., and International Accounting Standards: A German Stock Market Perspective. Journal of Accounting, Auditing and Finance, 20(95). https://doi.org/10.1177/0148558X0502000201
  7. Batta, G., Heredia, R. S., & Weidenmier, M. (2014). Political Connections and Accounting Quality under High Expropriation Risk. European Accounting Review, 23(8), 485?517.
  8. Berry, C. M., Ones, D. S., & Sackett, P. R. (2007). Interpersonal deviance, organizational deviance, and their common correlates: A review and meta-analysis. Journal of Applied Psychology, 92(2), 410?424. https://doi.org/10.1037/0021-9010.92.2.410
  9. Blalock JR, H. M. (1979). The presidential address: Measurement and conceptualization problems: The major obstacle to integrating theory and research. American Sociological Review, 44(6), 881?894.
  10. Braam, G., & Beest, F. van. (2013). Conceptually-based financial reporting quality assessment an empirical analysis on quality differences between UK annual reports and US 10-K reports.
  11. Burns, J. (2000). The dynamics of accounting change Inter-play between new practices, routines, institutions, power and politics. Accounting, Auditing & Accountability Journal, 13(5), 566?596.
  12. Carpenter, F. H., & Sharp, F. C. (1992). Popular reporting : Local governmnet financial reporting to citizenry. GASB Research Report, 16.
  13. Carpenter, T., & Jones, K. (2015). Financial reporting quality of U.S. private and public firms. Journal of International Accounting Research, 90(4), 1395?1435.
  14. Carpenter, V. L. (1987). pdf.
  15. Carpenter, V. L. (1991). The influence of political competition on the decision to adopt GAAP. Journal of Accounting and Public Policy, 10(2), 105?134. https://doi.org/10.1016/0278-4254(91)90008-8
  16. Chan, J. L., & Rubin, M. A. (1987). The role of information in a democracy and in government operations: The public choice methodology. Research in Governmental and Nonprofit Accounting, 3(Part B), 3?27.
  17. Cheng, R. H. (1992). An empirical analysis of theories on factors influencing state government accounting disclosure. Journal Od Accounting and Public Policy, 11, 1?42.
  18. Cohen, D. A. (2003). Quality of financial reporting choice : Determinants and economic consequences. London Business School Accounting, 3(July).
  19. Cohen, J., Wright, A., & Krishnamoorthy, G. (2004). The corporate governance mosaic and financial reporting quality. Journal of Accounting Literature, 87?152.
  20. Cohen, S., Kaimenakis, N., & Venieris, G. (2013). Reaping the benefits of two worlds An explanatory study of the cash and the accrual accounting information roles in local governments. Journal of Applied Accounting Research, 14(2), 165?179.
  21. Craswell, R. (1975). Self-generating growth in public programs. Public Choice, 21(1), 91?97.
  22. Daniels, J. D., & Daniels, C. E. (1991). Municipal financial reports: What users want. Journal of Accounting and Public Policy, 10(1), 15?38.
  23. Gallhofer, S., & Haslam, J. (2007). Exploring social, political and economic dimensions of accounting in the global context: the International Accounting Standards Board and accounting disaggregation, 633?664. https://doi.org/10.1093/ser/mwm012
  24. Giroux, G. (1989). Political interests and governmental accounting disclosure. Journal of Accounting and Public Policy, 8, 199?217.
  25. Giroux, G., & Jones, R. (2011). Measuring audit quality of local governments in England and Wales. Research in Accounting Regulation, 23(1), 60?66.
  26. Glomb, T. M., & Liao, H. (2003). Interpersonal agression in work groups: Social influence, reciprocal, and individual effects. Academy of Management Journal, 46(4), 486?496.
  27. Gravetter, F. J., & Wallnau, L. B. (2000). Statistics for the behavioral sciences.
  28. Healy, P. M., & Wahlen, J. M. (1999). A review of the earnings management literature and its implications for standard setting. American Accounting Association, 13(4), 365?383.
  29. Hirst, D. E., Hopkins, P. E., & Wahlen, J. M. (2004). Fair values , income measurement , and bank analysts risk and valuation judgements. The Accounting Review, 79(2), 453?472.
  30. (2010). Conceptual framework for financial reporting. International Financial Reporting Standards (Vol. 87). https://doi.org/ISBN: 978-1-907026-69-0 Copyright
  31. (2009a). 2009 IFAC Handbook of International Public Sector Accounting (IPSAS) pronouncements.
  32. (2009b). Financial reporting under the cash basis of accounting part 2: encouraged additional disclosures.
  33. IFAC International Federation of Accountants, & IFAC. (2015). International Public Sector Accounting Standards Board Handbook of International Public Sector Accounting Pronouncements 2012 Edition (Vol. II).
  34. Ingram, R. W. (1984). Economic incentives and the choice of state government accounting practices. Journal of Accounting Research, 22(1), 126?144.
  35. Ingram, R. W., & Copeland, R. M. (1981). Municipal accounting information and voting behavior. Accounting Review, 56(4), 830?843.
  36. Jonas, G. J., & Blanchet, J. (2000). Assessing quality of financial reporting. American Accounting Association, Accounting Horizons, 14(3), 353?363.
  37. Jones, R., & Giroux, G. (2002). Comparative local government auditing: Audit timing in the US and the UK. Innovations in Governmental Accounting, 343?348.
  38. Keerasuntonpong, P., Dunstan, K., & Khanna, B. (2015). Factors influencing disclosures of statements of service performance of New Zealand local authorities. Pacific Accounting Review, 27(3), 304?328.
  39. Khumawala, S., Marlowe, J., & Neely, D. (2014). Accounting professionalism and local government Gaap. Journal of Budgeting, Accounting & Financial Management, 26(2), 292?312.
  40. Larcker, D. F., & Lessig, V. P. (1980). Perceived Usefulness of Information: A Psychometric Examination. Decision Sciences, 11(1), 121?134.
  41. Leuz, C., Pfaff, D., & Hopwood, A. (2004). The economics and politics of accounting: International perspectives on trend, policy and practice. Oxford Review of Economic Policy, 24(2), 9?57.
  42. Lopez Hernandez, A. M., & Caba Perez, C. (2004). The relevance of Spanish local financial reporting to credit institution decisions: An empirical study. International Journal of Public Sector Management, 17(2), 118?135.
  43. Maines, L. A., & Wahlen, J. M. (2006). The nature of accounting information reliability: inferences from archival and experimental research. Accounting Horizons, 20(4), 399?425.
  44. Martani, D., & Lestiani, A. (2012). Disclosure in local government financial statements : the Case of Indonesia. Global Review of Accounting and Finance, 3(1), 67?84.
  45. Mbobo, M. E., & Ekpo, N. B. (2016). Operationalising the qualitative characteristics of financial reporting. International Journal of Finance and Accounting, 5(4), 184?192.
  46. McDaniel, L., Martin, R. D., & Maines, L. A. (2002). Evaluating financial reporting quality: The effects of financial expertise vs. financial literacy. Accounting Review, 77(SUPPLEMENT), 139?167.
  47. Mellemvik, P. A. F. (2015). Political connections : A threat to auditor. Journal of Accounting in Emerging Economies, 123?143(2), 123?143.
  48. Misra, F. (2010). An empirical investigation and analysis on factors influencing local government accounting practices. Faculty of Economics, Andalas University.
  49. Moe, T. M. (1984). The new economics of organization. American Journal of Political Science, 28(4), 739?777. Retrieved from http://www.jstor.org/stable/2110997
  50. Mustapha, M., Ku Ismail, K. N. I., & Ahmad, H. N. (2017). Organizational contingency and financial reporting quality in the public sector while adopting cash-basis IPSAS: A conceptual approach. Asian Journal of Multidisciplinary Studies, 5(12), 1?13.
  51. Podsakoff, P. M., & Organ, D. W. (1986). Self-reorts in organizational research: Problems and prospects. Journal of Management 1986, 12(4), 531. https://doi.org/10.1177/014920638601200408
  52. Richardson, H. A., Simmering, M. J., & Sturman, M. C. (2009). A tale of three perspectives examining post hoc statistical techniques for detection and correction of common method variance. Organizational Research Methods, 12(4), 762?800. Retrieved from http://journals.sagepub.com/doi/10.1177/1094428109332834
  53. Robbins, W. A., & Austin, K. R. (1986). Disclosure quality in governmental financial reports: an assessment of the appropriateness of a compound measure. Journal of Accounting Research, 24(2), 412?421.
  54. Salleh Md, M. F. (2009). Political influence, corporate governance and financial reporting quality: evidence from companies in Malaysia.
  55. Schipper, K., & Trombetta, M. (n.d.). Measurement Issues in Financial Reporting, (October 2014), 37?41. https://doi.org/10.1080/09638180.2010.506282
  56. Serrano-Cinca, C., Rueda-Tom?s, M., & Portillo-Tarragona, P. (2009). Factors influencing e-disclosure in local public administrations. Environment and Planning C: Government and Policy, 27(2), 355?378. https://doi.org/10.1068/c07116r
  57. Srivastava, M. S. (1984). A measure of skewness and kurtosis and a graphical method for assessing multivariate normality. Statistics & Probability Letters 2, 2(October), 263?267.
  58. Suwanda, D. (2015). FActors affecting quality of local government financial statements to get unqualified opinion ( WTP ) of audit board of the republic of Indonesia (BPK ). Research Journal of Finance and Accounting, 6(4), 139?158.
  59. Tasios, S., & Bekiaris, M. (2012). Auditor ? s perceptions of financial reporting quality : the case of Greece. International Journal of Accounting and Financial Reporting, 2(1), 57?74.
  60. van Beest, F., & Braam, G. (2006). Convergence through divergence An analysis of relationships between qualitative characteristics of the conceptual frameworks of the FASB and IASB.
  61. Van Beest, F., Braam, G., & Boelens, S. (2009). Quality of Financial Reporting : measuring qualitative characteristics. NiCE Working Paper 09-108.
  62. Van Tendeloo, B., & Vanstraelen, A. (2005). Earnings management under German GAAP versus IFRS. European Accounting Review, 14(1), 155?180.
  63. Watts, R. L., & Zimmerman, J. L. (1986). Positive accounting theory.
  64. Zimmerman, J. L. (1977a). Discussion of the Municipal Accounting Maze : An Analysis of Political Incentives. Journal of Accounting Research, 15(1977), 107?144.
  65. Zimmerman, J. L. (1977b). The municipal accounting maze: An analysis of political incentives. Journal of Accounting Research, 15, 107?144.

How to Cite This Article

Maruf Mustapha, Ku Nor Izah Ku Ismail and Halimah Nasibah Ahmad. (2018); POLITICAL INFLUENCE AND GOVERNMENTAL FINANCIAL REPORTING., Int. J. of Adv. Res., 6 (02), 241-250, ISSN 2320-5407. DOI: https://doi.org/10.21474/IJAR01/6434

Corresponding Author

Maruf Mustapha
Department of Local Government & Development Studies, Ahmadu Bello University, Zaria, Nigeria.
Creative Commons Attribution 4.0 This work is licensed under a Creative Commons Attribution 4.0 International License.