Fiscal Councils and Creative Accounting in EU Member States

Dominik Maltritz ()
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Dominik Maltritz: University of Erfurt

Journal of Economics and Financial Analysis, 2024, vol. 8, issue 2, 23-45

Abstract: We study the relationship between fiscal councils and creative accounting in 27 European Union (EU) countries. We use stock-flow adjustments to indicate creative accounting and relate them to our fiscal council indicator in a panel framework. Regarding the fiscal rules that trigger creative accounting, we distinguish between external (resulting from European Monetary Union membership) and internal fiscal rules. While fiscal councils are not significant when used as stand-alone variable their interaction with fiscal rules is significant. Our findings indicate that fiscal councils reduce creative accounting triggered by fiscal rules and thus help to enforce fiscal rules and sound fiscal policies.

Keywords: Fiscal Councils; Creative Accounting; European Monetary Union; Fiscal Rules; Stock-Flow Adjustments. (search for similar items in EconPapers)
JEL-codes: H60 H62 H63 H83 (search for similar items in EconPapers)
Date: 2024
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