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Advisor(s)
Abstract(s)
This study aims to identify to what extent certain factors perceived by internal decision-makers (politi-cians and financial officials) influence the usefulness they consider the information presented in thefinancial reports of municipalities has for decision-making purposes.It follows a quantitative research approach at a first stage, using a questionnaire. At a second andcomplementary stage, it uses a qualitative research perspective, with interviews in a small group ofmunicipalities, which might be seen as case studies, in order to explore and understand the (external andinternal) contextual factors that determine the usefulness of the financial report in decision-making byinternal decision-makers.The main findings show that the pressure of professional organizations and of a national problem(external factors), as well as the lack of knowledge and training on the accounting information system(internal organizational factor) are factors that most influence the usefulness of the financial report forinternal decision-making. Qualitative analysis confirms these results, reinforcing a factor relating to awork overload.Two important implications of this study are the following: first, professional bodies and the financialsituation in the country; while stimulating informational needs by internal users in the public sectorthey determine the usefulness they offer to financial reporting for decision-making. Second, the lack ofknowledge of the accounting information system, especially by local politicians, is a hindering factor ofthe usefulness given to financial reporting for internal decision-making. Nowadays, when many countriesare considering reforms of public sector accounting in line with the International Public Sector AccountingStandards (IPSAS), supposedly increasing the sophistication,
Description
Keywords
Local government Financial reporting Usefulness Determinants factors
Citation
Nogueira, Sónia P.; Jorge, Susana Margarida F. (2016). Explanatory factors for the use of the financial report in decision-making: evidence from local government in Portugal. Revista de Contabilidad. ISSN 1988-4672. 19:2, p. 216–226
Publisher
Elsevier