users of public sector financial statements and their information needs

December 25, 2020 - Less than a minute read

If, for example, user groups (i.e., service users and resource providers), as well as objectives (i.e. Whilst private sector financial reports have to serve predominantly the needs of the economic-rational user, public sector financial reports need to ensure at least a minimum level of information that is relevant, or ought to be relevant to all users. Another drawback may be the inclination of respondents to giving socially desirable responses, which can lead to an upward bias in their responses. Several antecedents are thinkable, both at the individual decision-making level and at the organizational level. more efficient operation. Antecedents can play a role at the individual level of decision making, for instance, when financial expertise or experience of actors is expected to have a positive impact on AI use (Buylen and Christiaens, 2016). Mutiganda, J.C. (2016), “How do politicians shape and use budgets to govern public sector organizations? We will largely disregard the perspective of preparers of AI, and we will also ignore another issue as addressed in the literature review, i.e. Such “information brokers” can help users to “digest” complicated AI or to focus on the use of AI on relevant parts. In general, according to the reviewed articles, both purposes of AI use are empirically equally relevant. Notes to Financial Statements Users and their potential uses of information USERS. (2018), “Governmental accounting practitioners: cardigan removed, research agenda revealed”, Accounting, Auditing and Accountability Journal, Vol. 7, pp. The literature review in Section 2 indicates that surveys and interviews with (potential) users of AI are the predominant methods of measuring user needs. These “strong” oversight bodies can, for example, be found in the case of a funding relationship between the European Union and EU member states, or between central government ministries and local governments. It would be important to distinguish between antecedents at the usability and at the use stage, because at the latter stage incentives originating from problems or worries are possibly influential, while at the former stage factors contributive to relevance and understandability of AI play a role. Assumed accounting knowledge is more disputable for purely financial information items, especially when they originate from accrual accounting, than for non-financial information. 47-62, (*). 19 No. There are also surveys with a focus on performance information, for instance, on indicators of efficiency, effectiveness and quality (ter Bogt, 2004). This example shows how users (councilors) and producers (staff members) of budgetary information were involved in the re-design of a program budget, supported by external consultant-researchers. ACCA (2015), “Consolidated government accounts: how are they used?”, Association of Chartered Certified Accountants, London (*). Several of the reviewed articles identify a number of antecedents having an impact on user attitudes and on the level of perceived usability and actual use. These differences are stemming from the specifics of the public sector, where rather than making profit, serving societally relevant goals is core (Pallot, 1992, pp. 507-514, (*). The providers of risk capital and their advisers are concerned with the risk inherent in, … 287-315, (*). Demaj, L. and Summermatter, L. (2012), “What should we know about politicians’ performance information need and use?”, International Public Management Review, Vol. Christensen, M., Greiling, D. and Christiaens, J. Observational studies (e.g. 38-59. In the following, an example of a consultation procedure for the renewal of accounting standards for Dutch local government is presented, which illustrates how the user perspective can be positioned in a consultation procedure. (2019), “Public sector accounting and the post-NPM: out of the Golden (C) age? The budget is an expression of these political priorities, and hence, budgeting and ensuring that budgets and related plans are executed according to laws and political priorities is core in the public sector. Mack, J. Performance information for democracy: the missing link? Although it is valuable to get an in-depth understanding of both sides of the market for AI (i.e. persons or institutions interested in informing themselves about certain financial issues. by explaining the intensity of AI use with existing traditions and cultural patterns or with variants of isomorphism (Buylen and Christiaens, 2016). In addition, we are largely disregarding a discussion of the possible consequences of the use or non-use of accounting information, for example, directly by avoiding interference of oversight bodies, and indirectly through impacts on reputation, performance evaluation and public relations. Financial Audit: Intended to verify financial statements, accounts and balances as per generally accepted accounting principles. Journal of Public Budgeting, Accounting & Financial Management. Legislators and standard-setters have the task of ensuring a minimum level and balance various stakeholders’ interests. Two major purposes are frequently mentioned: rendering accountability to various stakeholders and supporting decision making. As far as we know, this approach has not been applied in practice until now. Our review of the recent research on users and uses of public sector AI shows, on the one hand, an increasing stream of empirical studies. Despite recent efforts to promote “popular reporting” (Cohen and Karatzimas, 2015), citizens are usually in a quite remote position to their municipality, province, state or central government and only a minority of them will sometimes be confronted with AI through mass and social media (newspapers, radio, television, twitter). Blöndal, J.R. (2003), “Accrual accounting and budgeting; key issues and recent developments”, OECD Journal on Budgeting, Vol. We still have to better understand the theoretical interrelations between the elements of the “user needs-usability-use”-model and their various contingencies. Pallot, J. Journal of Public Administration Research and Theory, How do politicians shape and use budgets to govern public sector organizations? Information will have relevance if it influences the decisions of the users. 31 No. 231-234. Financial statements are important to investors because they can provide enormous information about a company's revenue, expenses, profitability, … Ai throughout this paper includes a literature review and conceptual reflections oods and from... Interviews, mostly user surveys, interviews and consultations of stakeholders in to... 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