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Determinants of mandatory disclosure compliance in Swedish municipalities

Determinants of mandatory disclosure compliance in Swedish municipalities The purpose of this article is to examine whether, and if so, to what extent, noncoercive isomorphism determines mandatory disclosure compliance at a later stage of an accounting reform.Design/methodology/approachThe analysis of compliance is based on data from 289 Swedish municipalities for 2016, which is nearly two decades after the initial legal reform in which mandatory requirements were imposed by the Swedish government in an effort to harmonize financial reporting practice. Following the standard approach in the literature, an unweighted compliance index was used as dependent variable. Proxies for municipal accounting networks and involvement in professional government accounting associations were used to explain individual municipalities' levels of compliance.FindingsDifferences in individual municipalities' levels of compliance were strongly related to the financial reporting practice of other municipalities in their accounting network. These results suggest that normative and mimetic isomorphic pressure stemming from these local networks, where accounting departments continually meet and share experiences, is a very potent force. In contrast, isomorphic pressure stemming from involvement in activities offered by professional government accounting associations is generally not a potent force at this stage.Practical implicationsIn settings where municipal accounting networks exist, it may be effective to stimulate de facto harmonization by directing information, education and other efforts toward the professional environment in which these networks operate.Originality/valueUnlike prior literature, the data in this study are from a later stage of a public sector accounting reform. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Public Budgeting, Accounting & Financial Management Emerald Publishing

Determinants of mandatory disclosure compliance in Swedish municipalities

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1096-3367
DOI
10.1108/jpbafm-03-2019-0048
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Abstract

The purpose of this article is to examine whether, and if so, to what extent, noncoercive isomorphism determines mandatory disclosure compliance at a later stage of an accounting reform.Design/methodology/approachThe analysis of compliance is based on data from 289 Swedish municipalities for 2016, which is nearly two decades after the initial legal reform in which mandatory requirements were imposed by the Swedish government in an effort to harmonize financial reporting practice. Following the standard approach in the literature, an unweighted compliance index was used as dependent variable. Proxies for municipal accounting networks and involvement in professional government accounting associations were used to explain individual municipalities' levels of compliance.FindingsDifferences in individual municipalities' levels of compliance were strongly related to the financial reporting practice of other municipalities in their accounting network. These results suggest that normative and mimetic isomorphic pressure stemming from these local networks, where accounting departments continually meet and share experiences, is a very potent force. In contrast, isomorphic pressure stemming from involvement in activities offered by professional government accounting associations is generally not a potent force at this stage.Practical implicationsIn settings where municipal accounting networks exist, it may be effective to stimulate de facto harmonization by directing information, education and other efforts toward the professional environment in which these networks operate.Originality/valueUnlike prior literature, the data in this study are from a later stage of a public sector accounting reform.

Journal

Journal of Public Budgeting, Accounting & Financial Management – Emerald Publishing

Published: Jun 15, 2020

Keywords: Compliance; Disclosure; Isomorphism; Public sector accounting; Harmonization

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