Accounting Research on Local Government Reporting: Literature Analysis Using Text Mining

Abstract

For the past 30 years, local governments (LGs) in the European Union (EU) and other countries have sought to improve their reporting, and accounting standards setters and researchers have focused on LG reporting. This study aims to synthesize accounting research for LG reporting, which is discretionary, voluntary, and diverse. It examines two research questions: What is the central issue of accounting research in LG reporting, and how has the focus of accounting research in LGs reporting changed? To identify trends and correspondence among the relevant articles, we adopted the innovative literature analysis approach of adding text mining to our literature review. Starting with a systematic review framework, we chose eight interdisciplinary journals based on previous study, and selected 75 articles published between 1980 and 2015. We conducted a literature analysis using text mining and a corresponding analysis of 75 related articles. This technique yielded three main findings: Research on LGs reporting has addressed accrual and asset evaluation; specific practices, such as e-government and sustainability reporting, have been the focus of research since 2010; and finally, LG accounting (LGA) research has diversified in the direction of political context and methodology, especially interviews and surveys. These results suggest that accounting research for LG reporting has diversified, but that accrual accounting and asset evaluation remain central to the discussion. This study contributes to academic research by delineating traditional and recent issues in LGA research, and introduces the use of text mining to the accounting domain.