The role of public-sector accounting in controlling corruption: an assessment of Organisation for Economic Co-operation and Development countries

Abstract

This study adds new insights to the academic debate on the effectiveness of both accrual-basis systems and the adoption of harmonised accounting rules at the international level by considering an additional perspective: their effect on corruption. This study investigates a sample of 33 Organisation for Economic Co-operation and Development countries for the period 2010–2014, creating a panel data set that allows the taking of an international comparative approach. The results indicate that corruption is reduced as governments advance in public-sector accounting reforms, adopting International Public Sector Accounting Standards, or implementing accrual-basis systems. Points for practitioners Our findings show the relevant role played by public sector accounting reforms in reducing corruption. Concretely, International Public Sector Accounting Standards implementation and accrual-accounting adoption can attenuate the information advantage of politicians towards citizens, reducing the level of corruption. This article contributes to the debate concerning the institutional arrangements that should be implemented to reduce corruption.