Transparency and accountability lost?

Abstract

Purpose The aim of this paper is to explore the causes of variations in financial accounting and disclosure practices in a municipal setting highly influenced by governance reforms – the Swedish municipal waste management sector. This focus is motivated by the claim that recent governance reforms have made the organization of public services delivery more diversified and fragmented, which may have had a negative effect on transparency and accountability. Design/methodology/approach To document the accounting and disclosure practices of the Swedish solid waste management organizations, a questionnaire approach was selected. The study uses a conceptual theoretical framework that complements the basic variables considered to influence public sector financial accounting and disclosure practices with factors such as competition and municipal governance forms. Findings The results show that compliance accounting and disclosure transparency to some extent have different antecedents and that the external environment, including market competition, size and economic input, influences both. The governance forms, on the other hand, only influenced compliance accounting (negatively and positively) and not the willingness to disclose information in general. The overall conclusion is that changes to the economic and institutional context mixed with different municipal governance forms introduces a multiplicity of forces that makes the accounting practices themselves diversified and fragmented and not necessarily only in a “negative” direction. Practical implications From a policy perspective the results indicate that the changing institutional and organizational environment has not been matched by attention to, and regulation of, reporting structures that secure external vertical accountability processes. The general implication for future regulations should therefore be to recognize the influence of different economic and institutional forces and develop accountability models that enable and preserve the benefits of governance reform initiatives without losing accountability and transparency. Originality/value Few prior quantitative studies have theoretically related municipal accounting and disclosure practices to factors such as market competition and popular municipal governance forms (municipal corporation, regional cooperation, outsourcing, etc.). Knowledge of how reforms might influence municipal accounting practices might benefit future policy decisions on accountability models with aim of enable and preserve the benefits of governance reform initiatives without losing accountability and transparency.