Comprehensibility of the Accounting Information Disclosed by the Brazilian Public Sector: An Experiment Based on the Use of Popular Reporting
DOI:
https://doi.org/10.14392/asaa.2024170104Keywords:
Accounting Information, Public Sector, Comprehensibility, Popular Reporting, Social ControlAbstract
Purpose: To investigate the comprehensibility of the information disclosed through accounting reports from the Brazilian public sector by comparing the model mandatory disclosure with alternate disclosures from the popular reporting perspective.
Method: Experimental research was used as a methodology and it was done based on scenarios with the use of a control group and three treatment groups, which encompassed the manipulation of the technical language knowledge variables and the differentiated layout based on popular reporting.
Results and discussions: This paper pointed that the citizens who have no technical language knowledge but who had access to accounting information released by popular reporting know more about the accounting information disclosed by the public sector than the citizens who have technical knowledge and had access to accounting statements traditionally highlighted. Therefore, it is possible to conclude that the differentiated layout, based on popular reporting precepts, is able to overcome the lack of technical knowledge of the majority of users of the accounting information disclosed by the public sector.
Contributions: Analyzing the Brazilian experience on the understandability of accounting information disclosed by the public sector from the comparison between experimental groups, this paper finds evidence that alternative ways of presenting the accounting reports disclosed by the public sector, from the use of a model based on popular reporting, overcome the lack of knowledge of technical terms used by accounting, improving the understanding of users. These findings contribute to improving the process of accountability and transparency of the accounting information disclosed by the Brazilian public sector.
Downloads
References
Augustinho, S. M., Oliveira, A. G., & Guimarães, I. A. (2015). Disclosure and accountability in public financial statements as instruments for social control. Revista de Educação e Pesquisa em Contabilidade (REPeC), 9(2), 182-199. https://doi.org/10.17524/repec.v9i2.1173 DOI: https://doi.org/10.17524/repec.v9i2.1173
Armstrong, E. (2005). Integrity, transparency and accountability in public administration: Recent trends, regional and international developments and emerging issues. United Nations, Department of Economic and Social Affairs, 1(10), 1-10.
Barbera, C., Borgonovi, E., & Steccolini, I. (2016). Popular reporting and public governance: The case of “Bilancio in Arancio” in Milan municipality. Governance and Performance in Public and Non-Profit Organizations (Studies in Public and Non-Profit Governance), 5, 3–30. https://doi.org/10.1108/S2051-663020160000005001 DOI: https://doi.org/10.1108/S2051-663020160000005001
Bergmann, A. (2012). The influence of the nature of government accounting and reporting in decision-making: evidence from Switzerland. Public Money & Management, 32(1), 15-20. https://doi.org/10.1080/09540962.2012.643050 DOI: https://doi.org/10.1080/09540962.2012.643050
Biancone, P., Secinaro, S., & Brescia, V. (2016). The popular financial reporting: focus on stakeholders—the first European experience. International Journal of Business and Management, 11(11), 115-125. http://dx.doi.org/10.5539/ijbm.v11n11p115 DOI: https://doi.org/10.5539/ijbm.v11n11p115
Carpenter, F. H., & Sharp, F. C. (1992). Popular reporting: local government financial reports to the citizenry. Governmental Accounting Standards Board.
Chan, C., Landry, S. P., & Troy, C. (2011). Examining External Validity Criticisms in the Choice of Students as Subjects in Accounting Experiment Studies. Journal of Theoretical Accounting Research, 7(1). http://jtar.org/id5.html
Christiaens, J., Reyniers, B., & Rollé, C. (2010). Impact of IPSAS on reforming governmental financial information systems: a comparative study. International Review of Administrative Sciences, 76(3), 537-554. https://doi.org/10.1177/0020852310372449 DOI: https://doi.org/10.1177/0020852310372449
Cohen, S., & Karatzimas, S. (2015). Tracing the future of reporting in the public sector: introducing integrated popular reporting. International Journal of Public Sector Management, 28(6), 449-460. https://doi.org/10.1108/IJPSM-11-2014-0140 DOI: https://doi.org/10.1108/IJPSM-11-2014-0140
Cohen, S., & Karatzimas, S. (2017). Accounting information quality and decision-usefulness of governmental financial reporting: Moving from cash to modified cash. Meditari Accountancy Research, 25(1), 95-13. https://doi.org/10.1108/MEDAR-10-2015-0070 DOI: https://doi.org/10.1108/MEDAR-10-2015-0070
Cohen, S. (2016). Popular Reporting (A. Farazmand, Ed.). Global Encyclopedia of Public Administration, Public Policy, and Governance. Springer, Cham. https://doi.org/10.1007/978-3-319-31816-5_2285-1 DOI: https://doi.org/10.1007/978-3-319-31816-5_2285-1
Cohen, S., Manes Rossi, F., Mamakou, X., & Brusca, I. (2022). Financial accounting information presented with infographics: does it improve financial reporting understandability? Journal of Public Budgeting, Accounting & Financial Management, 34(6), 263-295. https://doi.org/10.1108/JPBAFM-11-2021-0163 DOI: https://doi.org/10.1108/JPBAFM-11-2021-0163
Cohen, S., Mamakou, X. J., & Karatzimas, S. (2017). IT-enhanced popular reports: Analyzing citizen preferences. Government Information Quarterly, 34(2), 283-295. https://doi.org/10.1016/j.giq.2017.04.003 DOI: https://doi.org/10.1016/j.giq.2017.04.003
Conselho Federal de Contabilidade. (2016). Estrutura Conceitual para Elaboração e Divulgação de Informação Contábil de Propósito Geral pelas Entidades do Setor Público. https://www1.cfc.org.br/sisweb/SRE/docs/NBCTSPEC.pdf
Cooper, D. R., & Schindler, P. S. (2003). Métodos de Pesquisa em Administração. (7th ed.). Bookman. DOI: https://doi.org/10.1590/S1415-65552003000300016
Daniels, J. D., & Daniels, C.E. (1991). Municipal financial reports: what users want. Journal of Accounting and Public Policy, 10(1), 15-38. https://doi.org/10.1016/0278-4254(91)90018-F DOI: https://doi.org/10.1016/0278-4254(91)90018-F
Dias Filho, J. M. (2000). A linguagem utilizada na evidenciação contábil: uma análise de sua compreensibilidade à luz da teoria da comunicação. Caderno de Estudos, 38-49. https://doi.org/10.1590/S1413-92512000000200003 DOI: https://doi.org/10.1590/S1413-92512000000200003
Financial Accounting Standards Board. (2018). Conceptual Framework for Financial Reporting: Chapter 3, Qualitative Characteristics of Useful Financial Information. https://www.fasb.org/page/PageContent?pageId=/standards/concepts-statements.html
Gallon, A. V., Trevisan, R., Pfitscher, E. D., & Limongi, B. (2011). A compreensibilidade dos cidadãos de um município gaúcho acerca dos demonstrativos da Lei de Responsabilidade Fiscal publicados nos jornais. Revista de Contabilidade do Mestrado em Ciências Contábeis da UERJ, 16(1), 79-96.
Governmental Accounting Standards Board. (1987). Concept’s Statements No. 1 of the Governmental Accounting Standards Board: Objectives of Financial Reporting. https://gasb.org/page/ShowDocument?path=GASBCS-1.pdf&acceptedDisclaimer=true&title=GASB+CONCEPTS+STATEMENT+NO.+1%E2%80%94OBJECTIVES+OF+FINANCIAL+REPORTING&Submit=
Groff, J. E., & Pitman, M. K. (2004). Municipal financial reporting on the world wide web: a survey of financial data displayed on the official websites of the 100 largest US municipalities. The Journal of Government Financial Management, 53(2), 20.
Hair, J. F., Jr., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Multivariate Data Analysis. (5th ed.), Prentice Hall, New Jersey.
Herrmann, K. R. (2011). Create an Excellent Popular Financial Report. Government Finance Review, 41-44. https://fsfoa.starchapter.com/images/GFR_OCT_11_41.pdf
Hristov, Е., Dimitrova, Z., Parvova, I., & Kitov, B. (2016). Scientific, Regulatory and Practical Approaches to the Fight against Counterfeit Medicinal Products. Bulgarian Experience. Journal of US-China Medical Science, 13, 1-12. doi: 10.17265/1548-6648/2016.01.001 DOI: https://doi.org/10.17265/1548-6648/2016.01.001
Hood, C. (1995). Contemporary public management: a new global paradigm?. Public policy and administration, 10(2), 104-117.
https://doi.org/10.1177/095207679501000208 DOI: https://doi.org/10.1177/095207679501000208
International Accounting Standards Board. (2008). An improved Conceptual Framework for Financial Reporting. https://www.ifrs.org/content/dam/ifrs/project/conceptual-framework-2010/conceptual-framework-exposure-draft.pdf
Jones, D. B., Scott, R. B., Kimbro, L., & Ingram, R. (1985). The needs of users of governmental financial reports. Government Accounting Standards Board, Stamford, CT.
Justice, J. B., Melitski, J., & Smith, D. L. (2006). E-government as an instrument of fiscal accountability and responsiveness: Do the best practitioners employ the best practices? The American Review of Public Administration, 36(3), 301-322. https://doi.org/10.1177/0275074005283797 DOI: https://doi.org/10.1177/0275074005283797
Kinnersley, R., & Fleischman, G. (2001). The readability of government's letter of transmittal relative to public company management's discussion and analysis. Journal of public budgeting, accounting & financial management, 13(1), 1.
Leary, M. R. (2012). Introduction to behavioral research methods. (6th ed.). Pearson Education Inc.
Lewis, C. W., & Hildreth, W. B. (2011). Budgeting: Politics and Power. Oxford University Press.
Lee, M. (2006). The history of municipal public reporting. Intl Journal of Public Administration, 29(4-6), 453-476. https://doi.org/10.1080/01900690500436982 DOI: https://doi.org/10.1080/01900690500436982
Mack, J., & Ryan, C. (2007). Is there an audience for public sector annual reports: Australian evience? International Journal of Public Sector Management, 20(2), 134-146. https://doi.org/10.1108/09513550710731490 DOI: https://doi.org/10.1108/09513550710731490
Miranda, L. C., de Moura Silva, A. J., Ribeiro Filho, J. F., & da Silva, L. M. (2008). Uma análise sobre a compreensibilidade das informações contábeis governamentais comunicadas pelo Balanço Orçamentário. BBR-Brazilian Business Review, 5(3), 209-228.
Montesinos, V., & Brusca, I. (2019). Non-financial reporting in the public sector: alternatives, trends and opportunities: La información no financiera en el sector público: alternativas, tendencias y oportunidades. Revista de Contabilidad-Spanish Accounting Review, 22(2), 122-128. https://doi.org/10.6018/rcsar.383071 DOI: https://doi.org/10.6018/rcsar.383071
Oliveira, A. F. L. (2016). Popular Reporting nos Municípios Portugueses. [Dissertação de Mestrado]. Faculdade de Economia da Universidade de Coimbra.
Oliveira, Â., Santos, J. P., & Susana, J. (2018). Popular Reporting nos municípios portugueses? Revista Iberoamericana de Contabilidad de Gestión, 16(31). https://repositorium.sdum.uminho.pt/bitstream/1822/83688/1/angela-oliveira_susana-jorge_joao-santos.pdf
Paulsson, G. (2006). Accrual accounting in the public sector: experiences from the central government in Sweden. Financial Accountability & Management, 22(1), 47-62. https://doi.org/10.1111/j.0267-4424.2006.00392.x DOI: https://doi.org/10.1111/j.0267-4424.2006.00392.x
Platt Neto, O. A., Cruz, F., Ensslin, S. R., & Ensslin, L. (2007). Publicidade e transparência das contas públicas: obrigatoriedade e abrangência desses princípios na administração pública brasileira. Contabilidade Vista & Revista, 18(1), 75-94.
Rosair, M., & Taylor, D. W. (2000). The effects of participating parties, the public and size on government departments' accountability disclosures in annual reports. Accounting, Accountability & Performance, 6(1), 77-97.
Sharp, F. C., Carpenter, F. H., & Sharp, R. F. (1998). Popular financial reports for citizens. The CPA Journal, 68(3), 34.
Siraque, V. (2009). Controle social da função administrativa do Estado: possibilidades e limites na Constituição de 1988. Saraiva.
Steccolini, I. (2004). Is the annual report an accountability medium? An empirical investigation into Italian local governments. Financial Accountability & Management, 20(3), 327-350. https://doi.org/10.1111/j.0267-4424.2004.00389.x DOI: https://doi.org/10.1111/j.0267-4424.2004.00389.x
Van Helden, J., & Reichard, C. (2019). Making sense of the users of public sector accounting information and their needs. Journal of Public Budgeting, Accounting & Financial Management, 31(4), 478-495. https://doi.org/10.1108/JPBAFM-10-2018-0124 DOI: https://doi.org/10.1108/JPBAFM-10-2018-0124
Yusuf, J. E. W., & Jordan, M. M. (2012). Effective popular financial reports: The citizen perspective. Journal of Government Financial Management, 61(4), 44.
Yusuf, J. E., Jordan, M. M., Neill, K. A., & Hackbart, M. (2013). For the people: Popular financial reporting practices of local governments. Public Budgeting & Finance, 33(1), 95-113. https://doi.org/10.1111/j.1540-5850.2013.12003.x DOI: https://doi.org/10.1111/j.1540-5850.2013.12003.x
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Kalina Kely Miranda Leite, Josedilton Alves Diniz
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Copyright for articles published in the ASAA Journal is held by the author, with first publication rights to the journal. By virtue of appearing in this publicly accessible journal, the articles are free to use, with their own attributions, in educational and non-commercial applications. The ASAA Journal will allow the use of published works for non-commercial purposes, including the right to submit the work to publicly accessible databases. Published articles are the authors' full and exclusive responsibility. There are no submission/publishing charges or fees for processing articles (APC).
