Accounting and auditing in municipal organisations – Four papers on accounting compliance and audit costs
Author
Summary, in English
This thesis is a quantitative study of accounting compliance and audit costs in Swedish municipal organisations, consisting of four papers. Three of the papers explore factors that explain accounting compliance concerning financial reporting and revenue recognition in Swedish municipal water, sewerage and solid waste management organisations. The fourth paper explores the determinants of professional audit costs in Swedish municipal administrations. The overall purpose of this thesis is to contribute to the knowledge of what factors influence accounting compliance and audit costs in municipal organisations.
Explaining accounting compliance in the water and sewerage and solid waste management sectors reveals that these sectors are influenced partly by different factors and partly by the same factors but differently. The results indicate that the strength and the strictness of the institutional framework (legislation, sanctions, court cases) play an important role in relation to if and how each sector is influenced by certain economic, political and institutional factors. Further, the studies show that factors like market competition, legal form of corporation, regionalisation, cross-sectoral coordination and engaged audit firm alter, replace or introduce new institutional, political and economic forces that influence accounting compliance. These are all factors that can be linked to municipal reforms, thus providing some evidence on the consequences of such reforms. Regarding audit costs the results of the thesis also indicate that audit costs vary dependent upon external stakeholder factors (population, tax base and tax rate), which supports the proposition that audit cost might be influenced by external monitoring demand and political signalling incentives. The implication is that audit might not only be a tool to secure compliance; it might also be a tool to manage stakeholder relations.
From a policy perspective, the results indicate that the changing institutional and organisational environment (municipal governance reforms) has not been matched by attention to, and regulation of, reporting structures that secure external vertical accountability reporting, neither at the utility service level and nor at the consolidated municipal level. The general implication for future policy and regulations should therefore be to recognise the influence of different economic and institutional forces and develop accountability models that enable and preserve the benefits of governance forms and structures without losing transparency and accountability. The findings of this thesis suggest that accounting regulation and audit control need to bridge the public–private sector divide, level out sector-specific regulations and possibly connect regulation and accountability to the consolidated municipal organisation in order to preserve organisational freedom while securing compliant accountability information to relevant stakeholders.
Explaining accounting compliance in the water and sewerage and solid waste management sectors reveals that these sectors are influenced partly by different factors and partly by the same factors but differently. The results indicate that the strength and the strictness of the institutional framework (legislation, sanctions, court cases) play an important role in relation to if and how each sector is influenced by certain economic, political and institutional factors. Further, the studies show that factors like market competition, legal form of corporation, regionalisation, cross-sectoral coordination and engaged audit firm alter, replace or introduce new institutional, political and economic forces that influence accounting compliance. These are all factors that can be linked to municipal reforms, thus providing some evidence on the consequences of such reforms. Regarding audit costs the results of the thesis also indicate that audit costs vary dependent upon external stakeholder factors (population, tax base and tax rate), which supports the proposition that audit cost might be influenced by external monitoring demand and political signalling incentives. The implication is that audit might not only be a tool to secure compliance; it might also be a tool to manage stakeholder relations.
From a policy perspective, the results indicate that the changing institutional and organisational environment (municipal governance reforms) has not been matched by attention to, and regulation of, reporting structures that secure external vertical accountability reporting, neither at the utility service level and nor at the consolidated municipal level. The general implication for future policy and regulations should therefore be to recognise the influence of different economic and institutional forces and develop accountability models that enable and preserve the benefits of governance forms and structures without losing transparency and accountability. The findings of this thesis suggest that accounting regulation and audit control need to bridge the public–private sector divide, level out sector-specific regulations and possibly connect regulation and accountability to the consolidated municipal organisation in order to preserve organisational freedom while securing compliant accountability information to relevant stakeholders.
Department/s
Publishing year
2016
Language
English
Publication/Series
Lund Studies in Economics and Management
Volume
134
Full text
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Document type
Dissertation
Topic
- Business Administration
Keywords
- Accounting Transparency Accountability Compliance Auditing Public Sector
Status
Published
Supervisor
- Torbjörn Tagesson
- Stefan Yard
ISBN/ISSN/Other
- ISSN: 0284-5075
- ISBN: 978-91-7623-687-1
Defence date
29 April 2016
Defence time
13:00
Defence place
EC3:207, Holger Crafoords Ekonomicentrum
Opponent
- Johan Christiaens (Professor)