Semlit 8 – Governance, transparency and accountability An international comparison – Antonius Niha

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Journal of Policy Modeling xxx (2015) xxx–xxx

Governance, transparency and accountability: An international comparison

Manuel Pedro Rodríguez Bolívar ∗ , Andrés Navarro Galera,

Laura Alcaide Mu˜noz

Department of Accounting and Finance, University of Granada, Faculty of Business Studies,

Campus Universitario de Cartuja s/n, 18071 Granada, Spain

Received 27 October 2014; received in revised form 13 November 2014; accepted 22 January 2015

Abstract

Governmental financial transparency is an essential element in the implementation of policies to overcome

the present crisis of public finances. The international financial reporting standards aim to improve govern-

mental transparency and accountability through the use of new accounting models. Based on an international

empirical study involving the Supreme Audit Institutions of 29 countries, this paper examines the politi-

cal decisions associated with the introduction of the fair value accounting (FVA) to improve governmental

financial transparency. Our findings show that the application of FVA would require action in three areas of

government public policy: regulatory reform, skills training for public-sector staff and internationalisation.

© 2015 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

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this, several previous studies ( Cooper, 2006; Hubbard, 2006; Klein & Salvatore, 2013; Paredes,

Pedregal, & Pérez, 2014; Salvatore, 2006 ) have agreed that governmental accounting systems

play an essential role in implementing appropriate public policies to overcome the financial crisis

affecting the public sector worldwide.

In this context, the proposed International Public Sector Accounting Standards (IPSAS) ( IFAC, 2011 ) seek to enhance the accountability of public sector entities by increasing transparency in

governmental financial statements. The application of the fair value (FV) model ( IFAC, 2011 ), represents the current international benchmark for the preparation of governmental financial state-

ments, with a view to improving their relevance, comparability and transparency ( Haque, 2006 ). The adoption of fair value accounting (FVA) may have important policy implications because

it could influence the choice of the best model to manage public sector services ( Rodríguez &

Navarro, 2007 ). Accordingly, prior research has shown that the selection of an appropriate policy for accounting

measurement could enable a better response to information demands, by focusing on the reforms

being undertaken by public administrations, known as New Public Management ( Rodríguez &

Navarro, 2007 ), especially those associated with transparency. These reforms are expected to produce information that is more reliable, secure and complete ( Khurana & Kim, 2003 ). Nonetheless, the possible replacement of historical cost accounting (HCA) by FVA is arousing

much academic debate concerning the relationship between FVA and certain financial information

characteristics. With respect to this relationship, national governments wishing to implement FVA

may need to take policy decisions and adapt public accounting rules accordingly ( Whittington, 2008 ). Directive 2011/85/EU states that audits by government agencies such as Supreme Audit

Institutions (SAI) should encourage the adoption of international accounting practices. In this

respect, policy implications may arise due to the problems of reliability that have been imputed

to FVA. The information obtained from applying FVA is believed to be more relevant for users

than that derived from HCA, but at the same time, less reliable ( Betts & Wines, 2004 ). In accordance with international auditing standards ( IFAC, 2008; INTOSAI, 2006 ), financial

audit reports must make specific reference to the understandability and comparability of the

information content of governmental financial statements. Accordingly, the replacement of HCA

by FVA could have repercussions on the SAI decision making process, as the main users of

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result financial information understandable, comparable, timely, reliable, complete and accessible

( Haque, 2006 ). In this sense, prior studies have shown that change the basis for accounts evaluation

could significantly affect the usefulness of government financial information with respect to

accountability ( Navarro & Rodríguez, 2007 ).

The International Federation of Accountants (IFAC) is the most representative organisation of

the accounting profession, its public sector committee – International Public Sector Accounting

Standards Board (IPSASB), to promote the international harmonization of public accounting stan-

dards, and this body regularly issues International Public Sector Accounting Standards (IPSAS).

Their application may contribute to the success of public sector reforms, by raising the qual- ity of governmental financial information, and thus improving governmental transparency and accountability. In recent years, in IPSAS 15, 16 and 17, the IFAC has advocated the incorporation of FV

as a criterion for evaluating assets ( IFAC, 2011 ). According to previous studies, the information

obtained when FV is applied is more relevant to users than that prepared in accordance with the

HC method, but at the same time it is less reliable ( Betts & Wines, 2004 ). This lower reliability of

FV is usually associated with the difficulties encountered in obtaining market prices ( AAA FASC,

2000 ). In this regards, the change in accounting measurement proposed by the IPSAS could enhance

the quality of financial information ( IFAC, 2011 ) because it impacts on the qualitative characteris-

tics of financial information, and especially on its comparability, understandability and timeliness,

all of which could affect the financial transparency of governments and hence their accountability

( Navarro & Rodríguez, 2004 ). In this sense, greater comparability of the financial statements

issued by public entities could contribute to improving transparency.

In order to obtain financial information facilitating comparability, it is necessary a measurement

basis that is appropriate for the preparation of financial statements. In this regards, the application

of FV ( IFAC, 2011 ), based on estimates made in accordance with the current market circumstances

for each year, would provide values that are more homogeneous and therefore more useful for

improving governmental financial transparency ( Barth, 2006 ).

On the other hand, information transparency could also be affected by the understandability

of financial information ( Navarro & Rodríguez, 2007 ). Because the HC method accumulates the

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Directive 2011/85/EU, of 8 November 2011, obliges SAI to promote international best practices

in public accounting through the exercise of financial audits, and improve governmental financial

transparency and accountability. Hence, leading international bodies ( AARF, 1990; IFAC, 2011;

CICA, 1990; GASB, 1987 ) consider SAI to be one of the main groups of users of governmental

financial statements.

The implementation of FVA in governmental financial statements may affect the relevance

and reliability of their information content ( Whittington, 2008 ), and could also have an impact on

the activities carried out by SAI in performing the functions, especially those regarding account-

ability. In the performance of financial control, the SAI are responsible for determining whether

governmental financial statements meet the qualitative characteristics required of financial infor-

mation, especially as regards its transparency, accountability, comparability, understandability

and timeliness ( Haque, 2006 ).

Similarly, the replacement of HCA by FVA could affect the transparency of financial statements

and this change, in turn, could have an impact on the audit function of the SAI, especially in

the performance of financial audits, as these institutions must endorse the understandability, comparability and timeliness of governmental financial statements, and, to do so, they must perform tests to verify the valuation of public sector assets ( Navarro & Rodríguez, 2004 ). Therefore, it would be interesting to examine whether SAI consider that the replacement of

HCA by FVA could contribute to improving the usefulness of governmental financial statements

as regards transparency and accountability, and whether they believe the problems of reliability

associated with FV estimates might complicate the performance of their work. In this regard, it

is both interesting and timely to consider what public policies could be undertaken to overcome

such problems and to best implement FVA in governmental accounting systems.

3. Empirical research

3.1. Research questions

As shown in Section 2 of this paper, HCA and FVA do not seem to have the same capacity to

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valuation method, and enhance the quality of governmental financial statements, a goal that is specified in the international public accounting rules published by the IFAC (2011) . The incorporation of the FV approach in preparing governmental financial statements and its

influence on the relevance and reliability of the information content of these documents ( Ball, 2006; Whittington, 2008 ) is a question of great interest to one of the most influential entities

in this context, the SAI. These bodies seek to ensure that users have access to high-quality

financial statements, reflecting transparency in the use of public resources and, in short, favouring

accountability. Our first research question examines whether SAI believe that the implementation of FVA would improve the usefulness of financial statements. If, as held by the IFAC (2011) and some

doctrinal papers ( Navarro & Rodríguez, 2007 ), the introduction of FVA improves the relevance

of governmental financial statements, its utility could be greater than that of HCA for the SAI,

as entities responsible for monitoring public accounts. In consequence, the following research

question is proposed, based on perceptions among the SAI:

RQ1: Do SAI believe that the use of FVA in the preparation of governmental financial statements could improve its utility for enhancing accountability, compared with those

prepared under HCA?

A lively debate about FVA is currently taking place, because adoption of this approach could

generate problems of reliability, as is increasingly recognised ( Ball, 2006 ). This is so because on

some occasions it is difficult to obtain objective and verifiable estimations of the FV of assets and,

in others, because certain factors (such as economic incentives) could lead managers to employ

unverifiable FV estimates. In this respect, previous studies have concluded that the information

obtained by the application of the FV approach is more relevant to users, but less reliable, than

that derived from the HC method ( Ball, 2006; Betts & Wines, 2004 ). Therefore, the reliability of

the FV estimates included in governmental financial statements could be a factor inhibiting the

implementation of FVA. Accordingly, the following research question is proposed:

RQ2: Do SAI believe that the incorporation of FVA into governmental financial state- ments could generate relevant problems regarding the reliability of these statements for the

purposes of accountability?

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RQ4: Taking into account the reliability problems that prior research has identified regarding

the implementation of FVA, do SAI believe that the introduction of FVA estimations in the

notes to governmental financial statements could improve the reliability of these statements

for the purposes of accountability?

3.2. Sample selection and research methodology

The debate on the political implications of the international accounting standardisation move-

ment could be enriched by studying the usefulness of financial information based on the IPSAS for

the users of governmental financial statements in different countries. As noted in Section 2 of this

paper, SAI are called upon to act as guarantors of governments’ published financial statements, of

transparency in the use of public resources and, ultimately, of accountability. To achieve this aim,

this paper examines the perceptions of SAI about the usefulness of governmental financial state-

ments based on the IPSAS, with respect to improving transparency and accountability, and the

public policies that should be undertaken by politicians in order to facilitate the implementation

of FVA.

Initially, we contacted the director/president of each institution and, after carefully explaining

the research goals and methods, requested their cooperation in completing the questionnaire.

Those who agreed to participate then designated a liaison officer who was sent instructions on

how to complete the questionnaire, in coordination with the other departments within the SAI.

To collect the opinions of SAI, our research team put into contact with the persons assigned as

interlocutors of SAI.

The research methodology was based on a questionnaire inquiring into the relevance, reliability

and viability of FVA. As many developed Western countries are currently addressing the issue

of governmental reform and modernisation, a process in which financial transparency is a key

factor ( Christensen & Lægreid, 2007 ), the questionnaire was sent to official SAI in the most

representative countries of the main public administration and accounting traditions in Western

democracies (Anglo-American, Nordic, Central and Eastern European, Southern European and

Germanic models). Nonetheless, due to differences in their legislative reforms it would be useful

to analyse the comparative responses of the SAI according to which of the above groups they

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the questions, to be quite certain of having understood the meaning of each questionnaire item

and the ultimate goals of this study. Moreover, these interlocutors were offered the possibility

of clarifying possible doubts before completing the questionnaire. In this respect, some e-mails

were received concerning the exact meaning of some items; these questions were answered, and

thus we may be reasonably sure that the questions measured the intended constructs.

Based on prior studies on attitude analysis ( Emerson, Conroy, & Stanley, 2007 ) and on the

usefulness of accounting information ( Dumontier & Raffournier, 2002 ), respondents to the ques-

tionnaire were asked to describe their degree of agreement with each statement on a five-point

Likert scale (ranging from strongly disagree, “1” to strongly agree, “5”). The categories included

in the questionnaire represent an inherent order (weaker to stronger), but the numbers assigned to

the categories do not indicate the magnitude of difference between the categories in the way that

an interval or ratio scale would. After the questionnaire was completed, each item was analysed

separately; this is reported in Section 3.3 .

Wilcoxon’s method and the Student’s t test for comparison of the means were used to determine

the existence or otherwise of statistically significant differences between the attitudes of the sample

SAI. The t test is generally used to test the hypothesis of the equality of the means, and is the

most powerful statistical tool available when the hypothesis of normality is fulfilled ( Lehmann & Romano, 2005 ). However, when this assumption does not hold, the t test may not be valid, in

which case non-parametric methods such as the Wilcoxon signed rank test, or the sign permutation

method ( Good, 2005 ) may be used instead. Among these non-parametric methods, the Wilcoxon

test is most commonly recommended, and so it was applied in the present study, to confirm the

results obtained by the t test. The research questions were tested at the 0.01 and 0.05 significance

levels.

3.3. Analysis of the results

3.3.1. Descriptive statistics

As shown in Tables A1 and A2 in Appendix , the SAI in the Anglo-American countries believe that governmental financial statements based on FVA (henceforth FVA-FS), in rela- tion to those made under HCA, would: (a) more accurately represent government assets; (b)

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In southern European countries, most SAI consider that FVA-FS would improve the represen-

tation of government assets and the cost estimates of public services, increasing the comparability

and understandability of the financial information published. With respect to reliability, these SAI

believe FVA-FS would only improve verifiability if FV were applied to financial assets traded

in a market about which information was available in the notes to financial statements. Further-

more, these SAI acknowledge the higher cost of financial auditing based on FVA-FS. In addition,

their views on the reliability of the financial information published place greater emphasis on the

existence of markets than on the nature of the assets involved.

According to the SAI from Germanic countries, basing governmental financial statements on

FVA would make the representation of public assets more accurate, understandable and compa-

rable, although this might not be the case when the FV method is applied to nonfinancial assets

with no active market. Moreover, FV is generally considered to be capable of generating useful

financial information for the purposes of cost calculation. As regards reliability, provided there

are markets and that FVA is applied to financial assets, FVA-FS would provide more verifiable

and objective financial information, although the methods and assumptions used in the estimates

should be disclosed in the notes to financial statements. On the other hand, the advantages of FV

are more debatable when it is used in the valuation of non-financial assets for which no market

exists. However, there is broad agreement regarding both the existence of generally accepted methods for obtaining FV estimates and the fact that such methods would make financial auditing

more costly.

Finally, in the countries of Central and Eastern Europe, SAI recognise FV as a valuation approach that would improve the representation of governmental assets, generating financial information that is more understandable and comparable, although with respect to its timeliness,

opinions are divided. As regards reliability, provided that the notes to the financial statement

include information on the methods and assumptions on which the estimates are based and that

there exist markets for the assets in question, these SAI believe FVA-FS would be more objective

and verifiable, although this is not the case for non-financial assets for which there is no market.

Furthermore, in general these SAI acknowledge the existence of generally accepted methods for

estimating FV and the greater cost of obtaining financial audits by this method.

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At the level of detail enabled by these descriptive statistics, the greatest differences of opinion

are to be found in the items concerning the comparability between entities, which is much more

widely recognised in the Anglo-American countries, and regarding the timeliness of the financial

statements, more accepted among the non-Anglo-American countries. Regarding reliability, in

general, the problems of the verifiability and objectivity of FV, with the consequent disadvantages

for financial auditing, are more clearly recognised in the countries with experience in applying

this approach.

4. Conclusions

According to various agencies and transnational norms, in the present context of international

crisis in government finance, greater financial transparency is essential for the implementation of the public policies needed to overcome this crisis. In order to enhance this crucial element of accountability, governments must compile and disclose financial information that is more understandable, comparable, timely and reliable, for the benefit of citizens, supervisory bodies

and other stakeholders. To this end, improvements must be made in public accounting prac- tices; accordingly, the IFAC has published a set of IPSAS recommending the FVA model as

a means of improving the financial transparency of governments. Previous research has shown

that governments may need to take action to adapt national public accounting standards to meet

the requirements for changing to FVA. In this respect, the experience and perceptions of SAI

in different countries are of fundamental importance, as these bodies are obliged to promote international accounting practices in order to enhance the transparency of governmental financial

statements. The views transmitted by these 22 SAI show that, in the Anglo-American, Southern European,

Germanic and Central and Eastern European countries, it is believed that the application of the

FV criterion would enhance governmental financial statements, by better representing assets and by providing information that is more comparable, especially between different government

agencies. Furthermore, while the contribution of FVA to improving cost calculation is recognised

only in the Anglo-American and Southern European countries, the Germanic and Central and

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The above conclusions, together with the differences of opinion between the SAI with expe-

rience in FVA (the Anglo-American countries) and those lacking this experience (the remaining

countries), could usefully underpin the definition of government policies aimed at promoting

transparency as an essential element of accountability in the public sector. Our empirical results

show that the application of FVA in national public accounting systems requires the adoption of public policy decisions aimed at fulfilling the stipulated conditions for this accounting model

to be applied, with special attention to the requirements concerning the reliability of financial

information. Accordingly, the policy implications arising from the introduction of FVA in order to enhance

governmental financial transparency could be grouped into three types of government policy decisions: (a) legislative reforms; (b) skills training for public sector staff; (c) internationalisation.

With respect to the first of these areas, governments interested in implementing FVA would

need to undertake reforms in their national accounting standards to formalise a standard model

for the notes to financial statements so that the information provided is sufficient to ensure the

verifiability and objectivity of the values derived from the new accounting method. It would also be necessary to reform the laws governing the auditing of governmental financial state- ments, in order to: (a) incorporate new procedures to obtain evidence in situations of uncertainty

in the application of new valuation models; (b) define the risks of subjectivity affecting the valuations made in audit reports; (c) specify the disclosures to be made regarding valuation

methods in the notes to governmental financial statements to ensure their content is sufficiently

reliable. It would also be desirable for accounting rules to be amended to include a general listing of

the types of initial hypothesis that can be used in the valuation of public assets, as well as the

valuation procedures and techniques that are generally accepted, specifying the financial risks involved in their use, and their consequences as regards financial transparency, the assessment of

solvency and analyses of the sustainability of public policies, among other purposes.

These political reforms would be necessary in all the geographic areas analysed. Although the

Anglo-American SAI are the only ones to reject the existence of generally accepted valuation

methods – contrary to the opinion of the other SAI – they are also the only ones with experience

in FVA-FS auditing, and so their perceptions are more solidly grounded, from the technical

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met such as the provision of additional information report in the notes to financial statements, regarding the methods and assumptions used in the valuation procedures.

Finally, to contribute to policy decisions on legislative reforms and public sector staff, it would

be advisable for international partnerships to be reached between governments. This could be an interesting initiative, enabling exchanges of practical experience regarding the application of new methods of asset valuation and their impact on government accountability. It would also

make it possible to compare and improve national regulatory standards and governmental financial

statements and thus the financial transparency achieved in different countries. Accordingly, it could

be useful to develop, maintain and publish international databases that include reference values

for different types of public assets, depending on their nature, level of use, lifespan and alternative

uses, with the aim of facilitating accessibility to all stakeholders in government accountability,

including stakeholders who are not specialists in public finance.

Acknowledgments

This research was carried out with financial support from the Regional Government of Andalu-

sia (Spain), Department of Innovation, Science and Enterprise (Research project P11-SEJ-7700)

and from the Spanish National R&D Plan through research projects numbers ECO2010-17463-

ECON and ECO2010-20522-ECON (Ministry of Science and Innovation).

Appendix.

See Tables A1–A4 .

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accountability: Table A1

cite Descriptive statistics for financial assets by nationality of the SAI.

No. this

Financial assets of

g/10.1016/j.jpolmod.2015.01.010

article M.P ages P

Anglo-American countries Nordic countries

Frequency Percentage Min Max Mean SD CV Mean SD Frequency Percentage Min Max Mean SD CV Mean SD Rodríguez . 39

An

Assets that are traded in an organized, active and liquid market

in

Relevance

press

1. FVA is more relevant than 20 80 3 international 5 4.0 0.71 0.18 16 64 2 4 3.2 1.10 0.34

HCA to show the fair and true Bolívar AR

view of the governmental entity

as:

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HCA to improve the et TICLE IN PRESS

Rodríguez al. understandability of the

comparison. statements and, therefore, to Journal

governmental financial /

improve the transparency of

Bolív

of

financial information

P olicy ar

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to improve the comparability of

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xxx

benchmarking techniques

0.15 16 64 2 4 3.2 1.10 al. 0.34

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to improve the comparability of (2015)

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the governmental financial

xxx–xxx ernance, entity itself at previous times

statements of the governmental

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5. FVA could improve the 8 32 1 2 1.6 0.55 0.34 15 60 2 4 3.0 1.00 0.33

timeliness of governmental

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6. FVA is more relevant than 0 0 0 0 0.0 0.00 0.00 0 0 0 0 0.0 0.00 0.00

HCA to calculate the cost of

accountability: rendering public sector cite

assessment of efficiency No. this g/10.1016/j.jpolmod.2015.01.010

services, improving the

Reliability 2.9 0.93710241 2.9 0.97430763 of

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M.P ages

Fair value accounting is more

verifiable information than that . Rodríguez 39

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under historical cost accounting

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international press

the assets in a more objective

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TICLE IN PRESS

advantages than historical cost al. /

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Table A1 (Continued )

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Anglo-American countries Nordic countries

of g/10.1016/j.jpolmod.2015.01.010

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article Relevance M.P 3.3 1.14 2.8 0.72341781 ages P

Assets that are not traded in an organized, active and liquid market

39 in

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estimate FV measures exist

Modeling

14. To perform financial audits, 20 80 0 4 4.0 0.00 0.00 13 52 2 3 2.6 0.55 0.21

the cost of using FV measures

is higher than using transparenc HC

measures

(2015), y

16 JPO-6178; +Model http://dx.doi.or and Please

Table A1 (Continued )

Financial assets accountability: cite

No. this

Southern European countries Germanic countries

of g/10.1016/j.jpolmod.2015.01.010

Frequency Percentage Min Max Mean SD CV Mean SD Frequency Percentage Min Max Mean SD CV Mean SD

M.P Relevance 3.4 0.52 ages P

Assets that are traded in an organized, active and liquid market

article

39 in

Rodríguez

1. FVA is more relevant than 20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0 0.00 .

An

HCA to show

the fair and true

view of the governmental entity

2. FVA is more relevant than 17 68 3 4 3.4 0.55 0.16 8 80 4 4 4.0 0 international 0.00

press

HCA to improve the Bolívar AR

understandability of the

as:

governmental financial

statements and, therefore, to et TICLE IN PRESS

Rodríguez improve the transparency of al. financial information / comparison.

3. FVA is more relevant than HCA 15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0 0.00 Journal

to improve the comparability of

Bolív

statements among of P

the governmental financial

governmental entities, olicy

ar , promoting the use of Journal M.

benchmarking techniques Modeling

4. FVA is more relevant than HCA 17 68 3 4 3.4 0.55 0.16 8 80 4 4 4.0 0 0.00

P. to improve the comparability of , et

of xxx statements of the governmental al.

the governmental financial

entity itself at previous times (2015)

olicy P Go

5. FVA could improve the 15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0 0.00

v timeliness of governmental xxx–xxx ernance, financial statements, providing

Modeling

useful information to adapt

public sector entities to the

current socio-economic

transparenc

framework

6. FVA is more relevant than 0 0 0 0 0.0 0.00 0.00 0 0 0 0 0.0 0.00 0.00

HCA to calculate the cost of

rendering public sector

services, improving the y

assessment of efficiency

JPO-6178; +Model http://dx.doi.or and Please

accountability: cite

Reliability 3.8 0.71438423 4.0 0.60

7. The financial information under 20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0 0.00 No. this

of that

Fair value accounting is more

g/10.1016/j.jpolmod.2015.01.010

article under historical cost accounting M.P ages P

verifiable information than

8. Fair value accounting measures 17 68 3 4 3.4 0.55 0.16 8 80 4 4 4.0 0 0.00 . Rodríguez 39

An the assets in a more objective in

manner than historical cost

international accounting. press

Bolívar

9. To perform financial audits, fair 19 76 3 5 3.8 1.10 0.29 10 100 5 5 5.0 0 0.00

AR

value accounting has more

as:

advantages than historical cost

accounting

TICLE IN PRESS

Rodríguez

et

3 3.0 0.00 0.00 6 60 3 3 3.0 0 0.00 al. purposes, fair value accounting

10. For regulatory and compliance 15 60 3

/ comparison. has more advantages than Journal

historical cost accounting

11. The introduction of methods 20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0 Bolív 0.00 and hypotheses used to measure of

olicy ar P notes to financial statements

fair value accounting in the

, Journal

M. could improve its objectivity Modeling

12. The introduction of methods 23 92 4 5 4.6 0.55 0.12 8 80 4 4 4.0 0 0.00

P.

and hypotheses used to measure

, fair value accounting in the

of et notes to financial statements xxx

al. could improve its verifiability (2015)

P olicy

4.5 Go 0.58

Viability

ernance, generally accepted methods to xxx–xxx Modeling

13. Currently, reliable and 20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0 v 0.00

estimate FV measures exist

14. To perform financial audits, 19 76 3 5 3.8 1.10 0.29 10 100 5 5 5.0 0 0.00 using the cost of FV measures

transparenc

is higher than using HC

measures

(2015), y

18 JPO-6178; +Model http://dx.doi.or and Please

Table A1 (Continued )

Financial assets accountability: cite

No. this

Southern European countries Germanic countries

of g/10.1016/j.jpolmod.2015.01.010 Assets that are not traded in an organized, active and liquid market P

Frequency Percentage Min Max Mean SD CV Mean SD Frequency Percentage Min Max Mean SD CV Mean SD

article

M.P

Relevance 3.4 0.65 3.6

0.52 ages

39 in

Rodríguez

1. FVA is more relevant than 20 80 4 4 4.0 0.00 0.00 3.6 0.52 .

An

HCA to show the fair and true

view of the governmental entity

2. FVA is more relevant than 15 60 2 4 3.0 0.71 0.24 8 80 4 4 4.0 0.00 international 0.00

press

HCA to improve the Bolívar AR

understandability of the

as:

governmental financial

statements and, therefore, to et TICLE IN PRESS

Rodríguez improve the transparency of al.

financial information /

comparison.

3. FVA is more relevant than HCA 20 80 4 4 4.0 0.00 0.00 7 70 3 4 3.5 0.71 0.20 Journal

to improve the comparability of

Bolív

statements among of P

the governmental financial

governmental entities, ar olicy

, promoting the use of Journal M.

benchmarking techniques Modeling

4. FVA is more relevant than HCA 15 60 3 3 3.0 0.00 0.00 8 80 4 4 4.0 0.00 0.00

P. to improve the comparability of ,

of et statements of the governmental xxx al.

the governmental financial

entity itself at previous times (2015)

olicy P

Go

5. FVA could improve the 15 60 2 4 3.0 0.71 0.24 6 60 3 3 3.0 0.00 0.00

v timeliness of governmental xxx–xxx ernance, financial statements, providing

Modeling

useful information to adapt

public sector entities to the

current socio-economic

transparenc

framework

6. FVA is more relevant than 15 60 3 3 3.0 0.00 0.00 7 70 3 4 3.5 0.71 0.20

HCA to calculate the cost of

rendering public sector

services, improving the y

assessment of efficiency

JPO-6178; +Model http://dx.doi.or and Please

accountability: cite

Reliability 3.2 0.59 6 60 3 3 3.0 0.00 0.00

7. The financial information under 15 60 2 4 3.0 0.71 0.24 3.4 0.51 No. this

g/10.1016/j.jpolmod.2015.01.010 verifiable information than that of P

fair value accounting is more

article

under historical cost accounting M.P ages

8. Fair value accounting measures 15 60 3 3 3.0 0.00 0.00 7 70 3 4 3.5 0.71 0.20 . the assets in a more objective Rodríguez 39

An in

manner than historical cost

accounting

international press

value accounting has more Bolívar

9. To perform financial audits, fair 15 60 2 4 3.0 0.71 0.24 6 60 3 3 3.0 0.00 0.00

AR

advantages than as: historical cost

accounting

regulatory and compliance 15 60 3 3 7 3.0 TICLE IN PRESS 0.00 0.00 70 3 4 3.5 0.71 0.20 et

Rodríguez 10. For

purposes, fair value accounting al.

comparison. has more advantages than /

Journal accounting

historical cost

11. The introduction of methods 15 60 2 4 3.0 0.71 0.24 6 60 3 3 3.0 0.00 0.00

Bolív and hypotheses used to measure of

fair value accounting in the olicy P

ar

notes to financial statements

, could improve its objectivity Journal M.

Modeling

12. The introduction of methods 20 80 4 4 4.0 0.00 0.00 7 70 3 4 3.5 0.71 0.20

P. and hypotheses used to measure

, fair value accounting in the

of et notes to financial statements xxx

al.

could improve its verifiability

80 4 4.0 0.00 olicy 0.00 Go

Viability 4.2 0.63 8 4

13. Currently, reliable and 22 88 3 5 4.4 0.89 0.20 3.3 0.96

generally accepted methods to v xxx–xxx ernance,

estimate FV measures exist

Modeling

14. To perform financial audits, 20 80 4 4 4.0 0.00 0.00 5 50 2 3 2.5 0.71 0.28 the cost of using FV measures

is higher than using transparenc HC

measures

(2015), y

20 JPO-6178; +Model http://dx.doi.or and Please

Table A1 (Continued )

Financial assets

accountability: Eastern and Central European countries cite

Frequency Percentage Min Max Mean SD CV Mean SD No. this

Assets that g/10.1016/j.jpolmod.2015.01.010 are traded in an organized, active and liquid market of

Relevance 4.2 0.95145318 M.P P

article

ages

1. FVA is more relevant than 18

HCA to show 90 3 5 4.5 1.00 0.22

the fair and true view of the . Rodríguez 39

An

governmental entity

in 2. FVA is more relevant than HCA to 17 85 3 5 4.3 0.96 0.23

international press

improve the understandability of the

governmental financial statements and, Bolívar AR

therefore, to improve the transparency

as:

of financial information

FVA is more Rodríguez 3. relevant than HCA to 18 90 4 5 4.5 0.58 0.13 et TICLE IN PRESS

improve the comparability of the al. comparison.

among governmental entities, promoting Journal

governmental financial statements /

the use of benchmarking techniques

Bolív

4. FVA is more relevant than HCA to 19 95 4 5 4.8 0.50 0.11 of

ar governmental financial statements of the olicy

improve the comparability of the P

, governmental entity itself at previous Journal M.

times Modeling

P. , governmental financial statements,

5. FVA could improve the timeliness of 12 60 2 4 3.0 0.82 0.27

et providing useful information to adapt of xxx

public sector entities to the current al. socio-economic framework (2015)

olicy P Go

6. FVA is more relevant than HCA to 0 0 0 0 0.0 0.00 0.00

ernance,

v calculate the cost of rendering public xxx–xxx

sector services, improving the

Modeling

assessment of efficiency

Reliability 4.0 0.83405766

7. The financial information under Fair 16 80 3 5 4.0 1.15 transparenc 0.29

value accounting is more verifiable

information than that under historical

cost accounting

8. Fair value accounting measures the 16 80 3 5 4.0 0.82 0.20

assets in a more objective manner than

historical cost accounting.

JPO-6178; +Model http://dx.doi.or and Please

9. To perform financial audits, fair value 14 70 3 5 3.5 1.00 0.29

accounting has more advantages than

accountability: historical cost accounting cite

fair value accounting has more advantages No. this

10. For regulatory and compliance purposes, 14 70 3 4 3.5 0.58 0.16

than historical cost accounting of g/10.1016/j.jpolmod.2015.01.010

11. The introduction of methods and 18 90 4 5 4.5 0.58 0.13 M.P ages P article

hypotheses used to measure fair value

accounting in the notes to financial Rodríguez . 39

An

statements could improve its objectivity

in 12. The introduction of methods and 18 90 4 5 4.5 0.58 0.13

international press

hypotheses used to measure fair value

accounting in the notes to financial Bolívar AR

statements could improve its verifiability as:

Viability 3.9 1.13

TICLE IN PRESS

Rodríguez 13. Currently, reliable and generally accepted 16 80 3 5 4.0 0.82 0.20 et

methods to estimate FV measures exist al. comparison.

using FV measures is higher than using Journal HC measures

14. To perform financial audits, the cost of 15 75 2 5 3.8 / 1.50 0.40

Bolív Assets that are in an not traded organized, active and liquid market of

Relevance 3.5 1.23 P ar olicy 1. FVA is more relevant than HCA to show 17 68 1 5 3.4 1.52 0.45 , Journal

the fair true view M. and of the governmental Modeling