Determinants of mandatory disclosure compliance in Swedish municipalities

Pierre Donatella

Journal of Public Budgeting, Accounting & Financial Management, 2020, vol. 32, issue 2, 247-265

Abstract: Purpose - The purpose of this article is to examine whether, and if so, to what extent, noncoercive isomorphism determines mandatory disclosure compliance at a later stage of an accounting reform. Design/methodology/approach - The analysis of compliance is based on data from 289 Swedish municipalities for 2016, which is nearly two decades after the initial legal reform in which mandatory requirements were imposed by the Swedish government in an effort to harmonize financial reporting practice. Following the standard approach in the literature, an unweighted compliance index was used as dependent variable. Proxies for municipal accounting networks and involvement in professional government accounting associations were used to explain individual municipalities' levels of compliance. Findings - Differences in individual municipalities' levels of compliance were strongly related to the financial reporting practice of other municipalities in their accounting network. These results suggest that normative and mimetic isomorphic pressure stemming from these local networks, where accounting departments continually meet and share experiences, is a very potent force. In contrast, isomorphic pressure stemming from involvement in activities offered by professional government accounting associations is generally not a potent force at this stage. Practical implications - In settings where municipal accounting networks exist, it may be effective to stimulatede factoharmonization by directing information, education and other efforts toward the professional environment in which these networks operate. Originality/value - Unlike prior literature, the data in this study are from a later stage of a public sector accounting reform.

Keywords: Compliance; Disclosure; Isomorphism; Public sector accounting; Harmonization (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jpbafm:jpbafm-03-2019-0048

DOI: 10.1108/JPBAFM-03-2019-0048

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