Semlit 8 – Governance, transparency and accountability An international comparison – Antonius Niha

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Please cite this article in press as: Rodríguez Bolívar, M. P., et al. Governance, transparency and accountability: An international comparison. Journal of Policy Modeling (2015),

http://dx.doi.org/10.1016/j.jpolmod.2015.01.010

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JPO-6178; No.ofPages39

JournalofPolicyModelingxxx(2015)xxx–xxx

Availableonlineatwww.sciencedirect.com

ScienceDirect

Governance,

transparency

and

accountability:

An

international

comparison

Manuel

Pedro

Rodríguez

Bolívar

∗

_,

_Andrés

_Navarro

_Galera,

Laura

Alcaide

Mu˜noz

DepartmentofAccountingandFinance,UniversityofGranada,FacultyofBusinessStudies,

CampusUniversitariodeCartujas/n,18071Granada,Spain

Received27October2014;receivedinrevisedform13November2014;accepted22January2015

Abstract

Governmentalfinancialtransparencyisanessentialelementintheimplementationofpoliciestoovercome thepresentcrisisofpublicfinances.Theinternationalfinancialreportingstandardsaimtoimprove govern-mentaltransparencyandaccountabilitythroughtheuseofnewaccountingmodels.Basedonaninternational empiricalstudyinvolvingtheSupremeAuditInstitutionsof29countries,thispaperexaminesthe politi-caldecisionsassociatedwiththeintroductionofthefairvalueaccounting(FVA)toimprovegovernmental financialtransparency.OurfindingsshowthattheapplicationofFVAwouldrequireactioninthreeareasof governmentpublicpolicy:regulatoryreform,skillstrainingforpublic-sectorstaffandinternationalisation. ©2015SocietyforPolicyModeling.PublishedbyElsevierInc.Allrightsreserved.

Keywords:Governmentaltransparency;Accountability;Publicpolicy;InternationalPublicSectorAccountingStandards;

Fairvalueaccounting

1. Introduction

In thecontextof thepresent internationalcrisisof governmentfinances,accordingtoboth theFiscalSustainabilityReport(EuropeanUnion,2012)andDirective2011/85/EU(Councilof Europe,2011),improvementsinpublicaccountingpracticesarecrucialforobtaininghigh-quality informationonbudgetarystabilityandgovernmentalfinancialsustainability.Inagreementwith

∗_{Corresponding}_author._Tel.:₊₃₄₉₅₈₂₄₂₈_81.

E-mailaddresses:[email protected](M.P.RodríguezBolívar),[email protected](A.NavarroGalera),[email protected]

(L.AlcaideMu˜noz).

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2 M.P.RodríguezBolívaretal./JournalofPolicyModelingxxx(2015)xxx–xxx

this,severalpreviousstudies(Cooper,2006;Hubbard,2006;Klein&Salvatore,2013;Paredes, Pedregal,&Pérez,2014;Salvatore,2006)haveagreedthatgovernmentalaccountingsystems playanessentialroleinimplementingappropriatepublicpoliciestoovercomethefinancialcrisis affectingthepublicsectorworldwide.

Inthiscontext,theproposedInternationalPublicSectorAccountingStandards(IPSAS)(IFAC, 2011)seektoenhancetheaccountabilityofpublicsectorentitiesbyincreasingtransparencyin governmentalfinancialstatements.Theapplicationofthefairvalue(FV)model(IFAC,2011), representsthecurrentinternationalbenchmarkforthepreparationofgovernmentalfinancial state-ments,withaviewtoimprovingtheirrelevance,comparabilityandtransparency(Haque,2006). Theadoption offairvalueaccounting(FVA)mayhaveimportant policyimplicationsbecause itcouldinfluencethechoiceofthebestmodeltomanagepublicsectorservices(Rodríguez& Navarro,2007).

Accordingly,priorresearchhasshownthattheselectionofanappropriatepolicyforaccounting measurementcouldenableabetterresponsetoinformationdemands,byfocusingonthereforms beingundertakenbypublicadministrations,knownasNewPublicManagement(Rodríguez& Navarro, 2007), especiallythoseassociated withtransparency.Thesereforms are expectedto produceinformationthatismorereliable,secureandcomplete(Khurana&Kim,2003).

Nonetheless,thepossiblereplacementofhistoricalcostaccounting(HCA)byFVAisarousing muchacademicdebateconcerningtherelationshipbetweenFVAandcertainfinancialinformation characteristics.Withrespecttothisrelationship,nationalgovernmentswishingtoimplementFVA mayneedtotakepolicydecisionsandadaptpublicaccountingrulesaccordingly(Whittington, 2008).Directive2011/85/EUstatesthatauditsbygovernmentagenciessuchasSupremeAudit Institutions(SAI) shouldencouragetheadoption ofinternationalaccountingpractices.Inthis respect,policyimplicationsmayariseduetotheproblemsofreliabilitythathavebeenimputed toFVA.TheinformationobtainedfromapplyingFVAisbelievedtobemorerelevantforusers thanthatderivedfromHCA,butatthesametime,lessreliable(Betts&Wines,2004).

Inaccordancewithinternationalauditingstandards(IFAC,2008;INTOSAI,2006),financial audit reports must make specific referenceto the understandability andcomparability of the informationcontentofgovernmentalfinancialstatements.Accordingly,thereplacementofHCA

by FVAcould haverepercussions on the SAI decisionmakingprocess, as the mainusersof

governmentalfinancialstatements,byimpactingontheperformanceofitsfunctions.

Takingintoaccounttheaboveconsiderations,theaimofthepresentstudyistoidentifythe pol-icyimplicationsofimplementingtheIPSAStoimprovegovernmentalaccountability.Toachieve thisaim,basedoninternationalempiricalresearchconductedin29countries,weseekto deter-minethepolicyactionsrequiredtoimplementFVAforthepurposeofimprovinggovernmental financialtransparency.

Therestofthispaperisorganisedasfollows.InSection2,westudytheimportanceofFVwith respecttopublicadministrations’transparencyandaccountability, andweidentifythereasons whychangesinaccountingcriteriamayinfluencethedevelopmentofthefunctionsperformed bySAI.Section3presentsanempiricalstudybasedonaquestionnaire,detailingtheresearch questionsandthemainresultsobtained.InSection4,wediscusstheimplicationsoftheseresults andhighlightthemainconclusionsdrawn.

2. AccountingmeasurementbasisandSAIs’functions

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resultfinancialinformationunderstandable,comparable,timely,reliable,completeandaccessible (Haque,2006).Inthissense,priorstudieshaveshownthatchangethebasisforaccountsevaluation could significantly affectthe usefulness of government financial information withrespect to accountability(Navarro&Rodríguez,2007).

TheInternationalFederationofAccountants(IFAC)isthemostrepresentativeorganisationof theaccountingprofession,itspublicsectorcommittee–InternationalPublicSectorAccounting StandardsBoard(IPSASB),topromotetheinternationalharmonizationofpublicaccounting stan-dards,andthisbodyregularlyissuesInternationalPublicSectorAccountingStandards(IPSAS). Their application maycontributetothe successof publicsectorreforms, byraisingthe qual-ityof governmentalfinancial information,andthusimprovinggovernmentaltransparencyand accountability.

In recentyears,inIPSAS15,16and17,the IFAChas advocatedthe incorporationof FV asacriterionforevaluatingassets(IFAC,2011).Accordingtopreviousstudies,theinformation obtainedwhenFVisappliedismorerelevanttousersthanthatpreparedinaccordancewiththe HCmethod,butatthesametimeitislessreliable(Betts&Wines,2004).Thislowerreliabilityof FVisusuallyassociatedwiththedifficultiesencounteredinobtainingmarketprices(AAAFASC, 2000).

Inthisregards,thechangeinaccountingmeasurementproposedbytheIPSAScouldenhance thequalityoffinancialinformation(IFAC,2011)becauseitimpactsonthequalitative characteris-ticsoffinancialinformation,andespeciallyonitscomparability,understandabilityandtimeliness, allofwhichcouldaffectthefinancialtransparencyofgovernmentsandhencetheiraccountability (Navarro &Rodríguez,2004).In thissense, greatercomparability of thefinancial statements issuedbypublicentitiescouldcontributetoimprovingtransparency.

Inordertoobtainfinancialinformationfacilitatingcomparability,itisnecessaryameasurement basisthatisappropriateforthepreparationoffinancialstatements.Inthisregards,theapplication ofFV(IFAC,2011),basedonestimatesmadeinaccordancewiththecurrentmarketcircumstances foreach year,wouldprovidevaluesthat aremorehomogeneousandthereforemoreusefulfor improvinggovernmentalfinancialtransparency(Barth,2006).

Ontheotherhand,informationtransparencycouldalsobeaffectedbytheunderstandability offinancialinformation(Navarro&Rodríguez,2007).BecausetheHCmethodaccumulatesthe valuesofassetsacquiredoveraperiodoftime,itcouldbedifficulttodetermineandunderstand themarketcircumstancesprevailingatthemomentofeachsuccessiveacquisition(Eccles,Herz, Keegan,&Phillips,2001).WhiletheapplicationofFVincorporatescurrentmarketcircumstances, andthereforewouldbeexpectedtofavourtheunderstandabilityoffinancialstatementsandhence theirtransparency.

Inthecaseoftimelinessofgovernmentalfinancialstatements,theapplicationofFVArequires thoseresponsibleforpreparingfinancialstatementstoquantifyitemsonthebasisofcurrentmarket transactions (IFAC,2011).Theseestimationsmust beobtained atthemomentwhen financial statementsarebeingdrafted,andthiscouldleadtodelaysintheirpreparation.Nevertheless,FV estimatesareverytimely,totheextentthattheyreflectchangesincurrentmarketcircumstances, andthusprovidemoretransparentfinancialinformation(Barth,2006).

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Directive2011/85/EU,of8November2011,obligesSAItopromoteinternationalbestpractices inpublicaccountingthroughtheexerciseoffinancialaudits,andimprovegovernmentalfinancial transparencyandaccountability.Hence,leadinginternationalbodies(AARF,1990;IFAC,2011; CICA,1990;GASB,1987)considerSAItobeoneofthemaingroupsofusersofgovernmental financialstatements.

Theimplementationof FVAingovernmentalfinancialstatementsmayaffecttherelevance andreliabilityoftheirinformationcontent(Whittington,2008),andcouldalsohaveanimpacton theactivitiescarriedoutbySAIinperformingthefunctions,especiallythoseregarding account-ability.Intheperformanceoffinancialcontrol,theSAIareresponsiblefordeterminingwhether governmentalfinancialstatementsmeetthequalitativecharacteristicsrequiredoffinancial infor-mation, especiallyas regardsitstransparency,accountability, comparability,understandability andtimeliness(Haque,2006).

Similarly,thereplacementofHCAbyFVAcouldaffectthetransparencyoffinancialstatements andthischange, inturn,could havean impactonthe auditfunctionofthe SAI,especiallyin the performance of financial audits, as these institutions must endorse the understandability, comparability and timelinessof governmental financial statements, and, todo so, they must performteststoverifythevaluationofpublicsectorassets(Navarro&Rodríguez,2004).

Therefore,itwouldbeinterestingtoexaminewhetherSAIconsiderthatthereplacementof HCAbyFVAcouldcontributetoimprovingtheusefulnessofgovernmentalfinancialstatements asregardstransparencyandaccountability,andwhethertheybelievetheproblemsofreliability associatedwithFVestimatesmightcomplicatetheperformanceoftheirwork.Inthisregard,it isbothinterestingandtimelytoconsiderwhatpublicpoliciescouldbeundertakentoovercome suchproblemsandtobestimplementFVAingovernmentalaccountingsystems.

3. Empiricalresearch

3.1. Researchquestions

AsshowninSection2ofthispaper,HCAandFVAdonotseemtohavethesamecapacityto increasetheusefulnessoffinancialstatementsandhencegovernmentaccountability.Amongthe aspectshighlightedbyIFAC(2011)regardinggovernmentalfinancialinformation,three character-isticsmayhaveadirecteffectontransparency:comparability,understandabilityandtimeliness. Therefore,inanalysing whetherFVAcouldimprovefinancial transparency,wemuststudy its capacitytoadvancetheaccomplishmentofthesethreecharacteristics.Inaddition,todetermine therealcapacityofFVAtoimprovefinancialtransparency,wemustanalysethevariablesthat influenceitsreliability,suchastheverifiabilityandobjectivityofitsestimates,togetherwiththeir costandmeansofquantification.Likewise,asinthebusinesssector,theinclusionofmore com-pleteinformationintheNotestogovernmentalfinancialstatementscouldimprovethereliability ofFVestimations.Therefore,thismattermustbestudied.

All these characteristics of financial informationmay affectthe capacity of governmental financialstatementstosatisfyusers’demands(Ball,2006;Barth,2006).Accordingly,theimpact ofanygivenbasisforaccountingmeasurement–thatis,FVAvs.HCA–ontherelevanceand reliabilityoffinancialstatementswilldependonthespecificinformationneedsofeachparticular typeofuser.

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valuationmethod,andenhancethequalityof governmentalfinancialstatements,agoalthatis specifiedintheinternationalpublicaccountingrulespublishedbytheIFAC(2011).

TheincorporationoftheFVapproachinpreparinggovernmentalfinancialstatementsandits influenceontherelevanceandreliabilityoftheinformationcontentof thesedocuments(Ball, 2006; Whittington,2008)isaquestionof greatinteresttooneofthe mostinfluentialentities in this context,the SAI. Thesebodies seekto ensure that usershave access to high-quality financialstatements,reflectingtransparencyintheuseofpublicresourcesand,inshort,favouring accountability.

Our firstresearchquestionexamines whetherSAI believethat the implementationofFVA wouldimprovetheusefulnessoffinancialstatements.If,asheldbytheIFAC(2011)andsome doctrinalpapers(Navarro&Rodríguez,2007),theintroductionofFVAimprovestherelevance ofgovernmentalfinancialstatements,itsutilitycouldbegreaterthanthatofHCAfortheSAI, as entitiesresponsibleformonitoring publicaccounts.In consequence,thefollowingresearch questionisproposed,basedonperceptionsamongtheSAI:

RQ1: Do SAIbelievethat the useof FVAin thepreparation of governmentalfinancial statements could improve its utilityfor enhancing accountability, compared with those

preparedunderHCA?

AlivelydebateaboutFVAiscurrentlytakingplace,becauseadoptionofthisapproachcould generateproblemsofreliability,asisincreasinglyrecognised(Ball,2006).Thisissobecauseon someoccasionsitisdifficulttoobtainobjectiveandverifiableestimationsoftheFVofassetsand, inothers,becausecertainfactors(suchaseconomicincentives)couldleadmanagerstoemploy unverifiableFVestimates.Inthisrespect,previousstudieshaveconcludedthattheinformation obtainedbytheapplicationoftheFVapproachismorerelevanttousers,butlessreliable,than thatderivedfromtheHCmethod(Ball,2006;Betts&Wines,2004).Therefore,thereliabilityof theFVestimatesincludedingovernmentalfinancialstatementscouldbeafactorinhibitingthe implementationofFVA.Accordingly,thefollowingresearchquestionisproposed:

RQ2: Do SAI believethat the incorporation of FVA into governmental financial state-mentscouldgeneraterelevantproblemsregardingthereliabilityofthesestatementsforthe purposesofaccountability?

Furthermore,theincorporationofFVAwouldrequirevalueestimationstobeofpracticaluse. GiventhatFVAisanewaccountingcriterioninmanycountries,andthatmanyusersmaylack experienceinitsapplication,anotherquestionofinterestinordertoassessitsrepercussionson accountabilityisthatoftheviabilityoftheestimationsproduced.SAItendtohaveopinionsbased ontheexerciseofmonitoringandauditing.Inconsequence,weproposethefollowingresearch question:

RQ3:DoSAIbelievethattheimplementationofFVAcouldgenerateproblemsregarding theviabilityoftheirvalueestimationsforaccountabilitypurposes?

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RQ4:Takingintoaccountthereliabilityproblemsthatpriorresearchhasidentifiedregarding theimplementationofFVA,doSAIbelievethattheintroductionofFVAestimationsinthe notestogovernmentalfinancialstatementscouldimprovethereliabilityofthesestatements forthepurposesofaccountability?

3.2. Sampleselectionandresearchmethodology

Thedebateonthepoliticalimplicationsoftheinternationalaccountingstandardisation move-mentcouldbeenrichedbystudyingtheusefulnessoffinancialinformationbasedontheIPSASfor theusersofgovernmentalfinancialstatementsindifferentcountries.AsnotedinSection2ofthis paper,SAIarecalledupontoactasguarantorsofgovernments’publishedfinancialstatements,of transparencyintheuseofpublicresourcesand,ultimately,ofaccountability.Toachievethisaim, thispaperexaminestheperceptionsofSAIabouttheusefulnessofgovernmentalfinancial state-mentsbasedontheIPSAS,withrespecttoimprovingtransparencyandaccountability,andthe publicpoliciesthatshouldbeundertakenbypoliticiansinordertofacilitatetheimplementation

ofFVA.

Initially,wecontactedthedirector/presidentofeachinstitutionand,aftercarefullyexplaining the researchgoalsand methods, requested their cooperationincompleting the questionnaire. Thosewhoagreedtoparticipatethendesignatedaliaisonofficerwhowassentinstructionson howtocompletethequestionnaire,incoordinationwiththeotherdepartmentswithintheSAI. TocollecttheopinionsofSAI,ourresearchteamputintocontactwiththepersonsassignedas interlocutorsofSAI.

Theresearchmethodologywasbasedonaquestionnaireinquiringintotherelevance,reliability andviabilityofFVA.AsmanydevelopedWesterncountriesarecurrentlyaddressingtheissue ofgovernmentalreformandmodernisation,aprocessinwhichfinancialtransparencyisakey factor(Christensen& Lægreid,2007), thequestionnaire wassent toofficialSAI inthe most representativecountriesofthemainpublicadministrationandaccountingtraditionsinWestern

democracies(Anglo-American,Nordic,CentralandEasternEuropean,SouthernEuropeanand

Germanicmodels).Nonetheless,duetodifferencesintheirlegislativereformsitwouldbeuseful toanalysethe comparativeresponsesoftheSAIaccordingtowhichofthe abovegroupsthey belongto.Atotalof29countrieswerefinallyincludedinoursampleand22SAIbelongingto thesecountriesansweredthequestionnaire(Appendix),atotalresponserateof75.86%.

Thequestionnaireitemswereexpresslyconstructedforthepurposesofthisstudy,andwere arrivedatviaatwo-phaseprocess.Firstly,theresearchteamdraftedapreliminaryversionbased ontheconclusionsofpreviousworkinthefieldandontherecommendationsofinternationally respectedstandards-settingorganisationsthathaveaddressedthequestionofFVA.

In thesecond of thephasesinvolved indecidinguponthe items tobe included,andas an experimentalapproach,thetextoftheinitialversionofthequestionnairewassenttofiveSAI, andtheobjectivesofthestudyexplained.Thepurposeofthiscommunicationwasnottoobtain answerstothequestionnaire,butrathertoascertaintheopinionsofthesefiveSAIonthefollowing: (a)the understandability of the questionnairetext; (b) the clarityof the questions posedand possibleambiguities;(c)thepossibleinclusionofotherquestionsrelevanttothestudyaims.The suggestionsreceivedwereanalysedand,whenconsideredappropriate,incorporatedintothetext ofthequestionnaire.FollowingthesuggestionsofthesefiveSAI,somechangesweremadein ordertoimprovetheunderstandabilityandclarityofthequestionnaire.

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thequestions,tobequitecertainofhavingunderstoodthemeaningofeachquestionnaireitem andtheultimategoalsof thisstudy.Moreover,theseinterlocutorswereofferedthepossibility ofclarifyingpossibledoubtsbeforecompletingthequestionnaire.Inthisrespect,somee-mails werereceivedconcerningtheexactmeaningofsomeitems;thesequestionswereanswered,and thuswemaybereasonablysurethatthequestionsmeasuredtheintendedconstructs.

Basedonpriorstudiesonattitudeanalysis(Emerson,Conroy,&Stanley,2007)andonthe usefulnessofaccountinginformation(Dumontier&Raffournier,2002),respondentstothe ques-tionnairewereaskedtodescribetheirdegreeofagreementwitheachstatementonafive-point Likertscale(rangingfromstronglydisagree,“1”tostronglyagree,“5”).Thecategoriesincluded inthequestionnairerepresentaninherentorder(weakertostronger),butthenumbersassignedto thecategoriesdonotindicatethemagnitudeofdifferencebetweenthecategoriesinthewaythat anintervalorratioscalewould.Afterthequestionnairewascompleted,eachitemwasanalysed separately;thisisreportedinSection3.3.

Wilcoxon’smethodandtheStudent’sttestforcomparisonofthemeanswereusedtodetermine theexistenceorotherwiseofstatisticallysignificantdifferencesbetweentheattitudesofthesample SAI.Thettestisgenerallyusedtotestthehypothesisof theequalityof themeans,andisthe mostpowerfulstatisticaltoolavailablewhenthehypothesisofnormalityisfulfilled(Lehmann &Romano,2005).However,whenthisassumptiondoesnothold,thettestmaynotbevalid,in whichcasenon-parametricmethodssuchastheWilcoxonsignedranktest,orthesignpermutation method(Good,2005)maybeusedinstead.Amongthesenon-parametricmethods,theWilcoxon testismostcommonlyrecommended,andsoitwasappliedinthepresentstudy,toconfirmthe resultsobtainedbythettest.Theresearchquestionsweretestedatthe0.01and0.05significance levels.

3.3. Analysisoftheresults

3.3.1. Descriptivestatistics

As shown in Tables A1 and A2 in Appendix, the SAI in the Anglo-American countries

believe that governmental financial statements based on FVA (henceforth FVA-FS), in rela-tion to thosemade under HCA,would: (a) moreaccurately represent governmentassets; (b) improvethecomparabilityoffinancialinformation;(c)betterdescribethecostofproviding pub-licservices.However,Anglo-AmericanSAIalsoperceiveissuesofreliability;FVA-FSarenot consideredmoreverifiablethanthosegeneratedonthebasisofHCAandmanySAIareofthe opinionthat FVestimatesmaybe nomoreobjective thanthoseof HCA.In addition,

accord-ingtoAnglo-AmericanSAI,changingfromFVAtoHCAwouldincreasethecostofobtaining

theseestimates.They alsobelievethenotestofinancial statementscouldenhancetheir objec-tivity.Inany case,theexistenceofmarketsforassetsisconsideredmoreinfluentialthantheir nature.

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InsouthernEuropeancountries,mostSAIconsiderthatFVA-FSwouldimprovethe represen-tationofgovernmentassetsandthecostestimatesofpublicservices,increasingthecomparability andunderstandabilityofthefinancialinformationpublished.Withrespecttoreliability,theseSAI believeFVA-FS wouldonlyimproveverifiabilityifFVwereappliedtofinancialassetstraded inamarketaboutwhichinformationwasavailableinthenotestofinancialstatements. Further-more,theseSAIacknowledgethehighercostoffinancialauditingbasedonFVA-FS.Inaddition, theirviewsonthereliabilityofthefinancialinformationpublishedplacegreateremphasisonthe existenceofmarketsthanonthenatureoftheassetsinvolved.

AccordingtotheSAIfromGermaniccountries,basinggovernmentalfinancialstatementson FVAwouldmaketherepresentationofpublicassetsmoreaccurate,understandableand compa-rable,althoughthismightnotbethecasewhentheFVmethodisappliedtononfinancialassets withnoactivemarket.Moreover,FVisgenerallyconsideredtobecapableofgeneratinguseful financialinformationforthepurposesofcostcalculation.Asregardsreliability,providedthere aremarketsandthatFVAisappliedtofinancialassets,FVA-FSwouldprovidemoreverifiable andobjectivefinancialinformation,althoughthemethodsandassumptionsusedintheestimates shouldbedisclosedinthenotestofinancialstatements.Ontheotherhand,theadvantagesofFV aremoredebatablewhenitisusedinthevaluationofnon-financialassetsforwhichnomarket exists.However, thereisbroad agreement regardingboththe existence of generallyaccepted methodsforobtainingFVestimatesandthefactthatsuchmethodswouldmakefinancialauditing morecostly.

Finally, inthe countriesof Central and EasternEurope, SAI recognise FV as a valuation approach that would improve the representation of governmental assets,generating financial informationthatismoreunderstandableandcomparable,althoughwithrespecttoitstimeliness, opinions are divided.Asregards reliability,providedthat the notestothe financial statement includeinformationonthemethodsandassumptionsonwhichtheestimatesarebasedandthat thereexistmarketsfortheassetsinquestion,theseSAIbelieveFVA-FSwouldbemoreobjective andverifiable,althoughthisisnotthecasefornon-financialassetsforwhichthereisnomarket. Furthermore,ingeneraltheseSAIacknowledgetheexistenceofgenerallyacceptedmethodsfor estimatingFVandthegreatercostofobtainingfinancialauditsbythismethod.

3.3.2. Statisticalresults

ThedatadiscussedinthissectionareillustratedinTablesA3andA4(seeAppendix). Concern-ingbothrelevanceandreliability,theresultsofthettestshowthat,ingeneral,therearesignificant differencesbetweentheperceptionsoftheSAIfromcountrieswithexperienceinimplementing FVA(theAnglo-American group)andthoselackingsuchexperience (therestof thesample), sincethesignificancevaluesarebelow0.05.SimilarresultswereobtainedbytheWilcoxontest, withthesamelevelofsignificance.

Forviabilityinparticular,thettestrevealeddifferencesofopinionbetweenthetwoSAIgroups (i.e.,thosewithandwithoutexperienceinapplyingFV),althoughthesewerelessmarkedinthe absenceofmarketsforassets.Infact,withtheWilcoxontestsuchdifferenceswerenotstatistically significant;thesamewastrueregardingtheexistenceorotherwiseofmarketsfortheassets.

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Atthelevelofdetailenabledbythesedescriptivestatistics,thegreatestdifferencesofopinion aretobefoundintheitemsconcerningthecomparabilitybetweenentities,whichismuchmore widelyrecognisedintheAnglo-Americancountries,andregardingthetimelinessofthefinancial statements,moreacceptedamongthenon-Anglo-Americancountries.Regardingreliability,in general,theproblemsoftheverifiabilityandobjectivityofFV,withtheconsequentdisadvantages forfinancialauditing,aremoreclearlyrecognisedinthecountrieswithexperienceinapplying thisapproach.

4. Conclusions

Accordingtovariousagenciesandtransnationalnorms,inthepresentcontextofinternational crisisingovernmentfinance,greaterfinancialtransparencyisessentialfortheimplementation of thepublic policiesneeded toovercome thiscrisis. Inordertoenhancethiscrucialelement of accountability, governments must compile anddisclose financial informationthat is more understandable,comparable,timelyandreliable,forthebenefitofcitizens,supervisorybodies and otherstakeholders. To thisend, improvements must be made inpublic accounting

prac-tices; accordingly,the IFAC has published asetof IPSASrecommending theFVA model as

ameansof improvingthefinancialtransparencyofgovernments.Previousresearchhasshown thatgovernmentsmayneedtotakeactiontoadaptnationalpublicaccountingstandardstomeet the requirementsfor changingtoFVA.In thisrespect, theexperience andperceptionsofSAI in differentcountries are of fundamentalimportance, as thesebodies are obligedtopromote internationalaccountingpracticesinordertoenhancethetransparencyofgovernmentalfinancial statements.

Theviewstransmittedbythese22SAIshowthat,intheAnglo-American,SouthernEuropean, GermanicandCentralandEasternEuropeancountries,itisbelievedthattheapplicationofthe FV criterionwould enhance governmental financial statements,by better representingassets andbyprovidinginformationthatismorecomparable,especiallybetweendifferentgovernment agencies.Furthermore,whilethecontributionofFVAtoimprovingcostcalculationisrecognised

onlyintheAnglo-AmericanandSouthernEuropeancountries,theGermanicandCentraland

Easterncountriesdoagreethatthisapproachwouldenhancetheunderstandabilityofgovernmental financialstatements.Therefore,FVAcouldfacilitategreatertransparencyandaccountabilityin governmentalfinancialstatementsintheAnglo-Americancountries.Ontheotherhand,thisbenefit tobederivedfromFVAisnotrecognisedbytheSAIoftheNordiccountries,whileforthosefrom theGermanic,SouthernEuropeandCentralandEasterncountriesitisunclearhowusefulFVA wouldbeinsituationsinwhichthereisnomarketfornon-financialassets.Nevertheless,these SAIaremorefavourabletoFVAthanarethosefromtheNordiccountries.

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Theaboveconclusions,togetherwiththedifferencesofopinionbetweentheSAIwith expe-rienceinFVA(theAnglo-Americancountries)andthoselackingthisexperience(theremaining countries), could usefully underpinthe definition of governmentpolicies aimedat promoting transparencyasanessentialelementofaccountabilityinthepublicsector.Ourempiricalresults showthat theapplication ofFVAinnationalpublic accountingsystemsrequiresthe adoption ofpublicpolicydecisionsaimedatfulfillingthestipulatedconditionsforthisaccountingmodel tobeapplied,withspecial attentiontotherequirementsconcerning thereliabilityoffinancial information.

Accordingly,thepolicyimplicationsarisingfromtheintroductionofFVAinordertoenhance governmental financial transparency could begrouped into three typesof government policy decisions:(a)legislativereforms;(b)skillstrainingforpublicsectorstaff;(c)internationalisation. Withrespecttothefirstoftheseareas,governmentsinterestedinimplementingFVAwould needtoundertakereformsintheirnationalaccountingstandardstoformaliseastandardmodel forthenotestofinancialstatementssothattheinformationprovidedissufficienttoensurethe verifiabilityand objectivityof the valuesderived from the newaccounting method.It would also be necessary toreformthe laws governing the auditing of governmentalfinancial state-ments,inorderto:(a)incorporatenewprocedurestoobtainevidenceinsituationsofuncertainty in the application of new valuation models; (b) definethe risks of subjectivity affecting the valuations made inaudit reports; (c) specify the disclosures to be made regarding valuation methodsinthenotestogovernmentalfinancialstatementstoensuretheircontentissufficiently reliable.

Itwouldalsobedesirableforaccountingrulestobeamendedtoincludeagenerallistingof thetypesof initialhypothesisthatcanbeused inthevaluationofpublicassets,aswellas the valuationproceduresandtechniquesthat aregenerallyaccepted,specifyingthefinancial risks involvedintheiruse,andtheirconsequencesasregardsfinancialtransparency,theassessmentof solvencyandanalysesofthesustainabilityofpublicpolicies,amongotherpurposes.

Thesepoliticalreformswouldbenecessaryinallthegeographicareasanalysed.Althoughthe Anglo-AmericanSAIarethe onlyonestorejecttheexistence ofgenerallyaccepted valuation methods–contrarytotheopinionoftheotherSAI–theyarealsotheonlyoneswithexperience in FVA-FS auditing, andso their perceptions are more solidly grounded, from the technical standpoint.

Turningtothesecondareaofpolicyimplications(skillstrainingforpublicsectorstaff),the

application of FVAwould require thetechnical personnelemployedby SAItobecome more

highlyskilledintheimplementationofinternationalvaluationstandards;therefore,furthertraining wouldbeneededontherelationshipbetweenthesestandardsandtheIPSASaccountingvaluation modelsoftheIFAC.Tothisend,itmightbeusefultoorganisetrainingcoursesforSAItechnical staffandalsotomodifytheproceduresforSAIrecruitment,incorporatingspecificrequirements ontherelationshipbetweentransparency,accountabilityandinternationalaccountingvaluation models.

The applicationof FVAcould be furtherenhancedby theestablishment of formal mecha-nisms for collaborationandby the harmonization of criteria amongpublic sectoraccounting personnel,auditorsandvaluersofmovableandimmovableproperty,toagreeuponandto pub-lishvaluation protocols andmethodologies for cases inwhichthere are no organised,liquid markets.

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met suchastheprovisionofadditionalinformationreportinthenotestofinancialstatements, regardingthemethodsandassumptionsusedinthevaluationprocedures.

Finally,tocontributetopolicydecisionsonlegislativereformsandpublicsectorstaff,itwould be advisablefor internationalpartnershipstobereached betweengovernments.Thiscouldbe an interesting initiative, enabling exchanges of practical experience regarding the application ofnewmethodsofassetvaluationandtheirimpactongovernmentaccountability.Itwouldalso makeitpossibletocompareandimprovenationalregulatorystandardsandgovernmentalfinancial statementsandthusthefinancialtransparencyachievedindifferentcountries.Accordingly,itcould beusefultodevelop,maintainandpublishinternationaldatabasesthatincludereferencevalues fordifferenttypesofpublicassets,dependingontheirnature,levelofuse,lifespanandalternative uses,withtheaimof facilitatingaccessibilitytoallstakeholdersingovernmentaccountability, includingstakeholderswhoarenotspecialistsinpublicfinance.

Acknowledgments

ThisresearchwascarriedoutwithfinancialsupportfromtheRegionalGovernmentof Andalu-sia(Spain),DepartmentofInnovation,ScienceandEnterprise(ResearchprojectP11-SEJ-7700) andfromtheSpanishNationalR&DPlanthroughresearchprojectsnumbers

ECO2010-17463-ECONandECO2010-20522-ECON(MinistryofScienceandInnovation).

Appendix.

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DescriptivestatisticsforfinancialassetsbynationalityoftheSAI.

Financialassets

Anglo-Americancountries Nordiccountries

Frequency Percentage Min Max Mean SD CV Mean SD Frequency Percentage Min Max Mean SD CV Mean SD

Assetsthataretradedinanorganized,activeandliquidmarket

Relevance 3.4 1.19023807 3.1 0.9539392

1.FVAismorerelevantthan HCAtoshowthefairandtrue viewofthegovernmentalentity

20 80 3 5 4.0 0.71 0.18 16 64 2 4 3.2 1.10 0.34

2.FVAismorerelevantthan HCAtoimprovethe understandabilityofthe governmentalfinancial statementsand,therefore,to improvethetransparencyof financialinformation

17 68 2 5 3.4 1.14 0.34 15 60 2 4 3.0 1.00 0.33

3.FVAismorerelevantthanHCA toimprovethecomparabilityof thegovernmentalfinancial statementsamong governmentalentities, promotingtheuseof benchmarkingtechniques

22 88 4 5 4.4 0.55 0.12 15 60 2 4 3.0 1.00 0.33

4.FVAismorerelevantthanHCA toimprovethecomparabilityof thegovernmentalfinancial statementsofthegovernmental entityitselfatprevioustimes

18 72 3 4 3.6 0.55 0.15 16 64 2 4 3.2 1.10 0.34

5.FVAcouldimprovethe timelinessofgovernmental financialstatements,providing usefulinformationtoadapt publicsectorentitiestothe currentsocio-economic framework

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6.FVAismorerelevantthan HCAtocalculatethecostof renderingpublicsector services,improvingthe assessmentofefficiency

0 0 0 0 0.0 0.00 0.00 0 0 0 0 0.0 0.00 0.00

Reliability 2.9 0.93710241 2.9 0.97430763

7.Thefinancialinformationunder Fairvalueaccountingismore verifiableinformationthanthat underhistoricalcostaccounting

10 40 2 2 2.0 0.00 0.00 12 48 2 4 3.0 1.15 0.38

8.Fairvalueaccountingmeasures theassetsinamoreobjective mannerthanhistoricalcost accounting.

13 52 2 4 2.6 0.89 0.34 12 48 2 4 3.0 1.15 0.38

9.Toperformfinancialaudits,fair valueaccountinghasmore advantagesthanhistoricalcost accounting

13 52 2 4 2.6 0.89 0.34 12 48 2 4 3.0 1.15 0.38

10.Forregulatoryandcompliance purposes,fairvalueaccounting hasmoreadvantagesthan historicalcostaccounting

15 60 2 4 3.0 0.71 0.24 10 40 2 3 2.5 0.58 0.23

11.Theintroductionofmethods andhypothesesusedtomeasure fairvalueaccountinginthe notestofinancialstatements couldimproveitsobjectivity

15 60 1 4 3.0 1.22 0.41 12 48 2 4 3.0 1.15 0.38

12.Theintroductionofmethods andhypothesesusedtomeasure fairvalueaccountinginthe notestofinancialstatements couldimproveitsverifiability

20 80 4 4 4.0 0.00 0.00 12 48 2 4 3.0 1.15 0.38

Viability 4.0 0.00 3.3 0.67494856

13.Currently,reliableand generallyacceptedmethodsto estimateFVmeasuresexist

20 80 4 4 4.0 0.00 0.00 18 72 3 4 3.6 0.55 0.15

14.Toperformfinancialaudits, thecostofusingFVmeasures ishigherthanusingHC measures

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TableA1(Continued)

Financialassets

Assetsthatarenottradedinanorganized,activeandliquidmarket

Relevance 3.3 1.14 2.8 0.72341781

20 80 3 5 4.0 1.00 0.25 15 60 2 4 3.0 1.00 0.33

17 68 2 5 3.4 1.14 0.34 13 52 2 3 2.6 0.55 0.21

20 80 4 4 4.0 0.00 0.00 13 52 2 3 2.6 0.55 0.21

18 72 3 4 3.6 0.55 0.15 15 60 2 4 3.0 1.00 0.33

8 32 1 2 1.6 0.55 0.34 13 52 2 3 2.6 0.55 0.21

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7.Thefinancialinformationunder fairvalueaccountingismore verifiableinformationthanthat underhistoricalcostaccounting

8 32 1 2 1.6 0.55 0.34 13 52 2 3 2.6 0.55 0.21

8.Fairvalueaccountingmeasures theassetsinamoreobjective mannerthanhistoricalcost accounting

10 40 1 4 2.0 1.22 0.61 15 60 2 4 3.0 1.00 0.33

12 48 1 4 2.4 1.14 0.48 15 60 2 4 3.0 1.00 0.33

15 60 2 4 3.0 1.00 0.33 10 40 2 2 2.0 0.00 0.00

15 60 1 4 3.0 1.41 0.47 15 60 2 4 3.0 1.00 0.33

20 80 4 4 4.0 0.00 0.00 15 60 2 4 3.0 1.00 0.33

Viability 3.5 0.85 3.3 0.8232726

15 60 0 4 3.0 1.00 0.33 20 80 4 4 4.0 0.00 0.00

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Financialassets

SouthernEuropeancountries Germaniccountries

Relevance 3.4 0.48989795 3.6 0.52

20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0 0.00

17 68 3 4 3.4 0.55 0.16 8 80 4 4 4.0 0 0.00

15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0 0.00

17 68 3 4 3.4 0.55 0.16 8 80 4 4 4.0 0 0.00

15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0 0.00

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Reliability 3.8 0.71438423 4.0 0.60

20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0 0.00

8.Fairvalueaccountingmeasures theassetsinamoreobjective mannerthanhistoricalcost accounting.

17 68 3 4 3.4 0.55 0.16 8 80 4 4 4.0 0 0.00

19 76 3 5 3.8 1.10 0.29 10 100 5 5 5.0 0 0.00

15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0 0.00

20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0 0.00

23 92 4 5 4.6 0.55 0.12 8 80 4 4 4.0 0 0.00

Viability 3.9 0.74 4.5 0.58

20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0 0.00

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Financialassets

Relevance 3.4 0.65 3.6 0.52

20 80 4 4 4.0 0.00 0.00 3.6 0.52

15 60 2 4 3.0 0.71 0.24 8 80 4 4 4.0 0.00 0.00

20 80 4 4 4.0 0.00 0.00 7 70 3 4 3.5 0.71 0.20

15 60 3 3 3.0 0.00 0.00 8 80 4 4 4.0 0.00 0.00

15 60 2 4 3.0 0.71 0.24 6 60 3 3 3.0 0.00 0.00

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15 60 2 4 3.0 0.71 0.24 3.4 0.51

15 60 3 3 3.0 0.00 0.00 7 70 3 4 3.5 0.71 0.20

15 60 2 4 3.0 0.71 0.24 6 60 3 3 3.0 0.00 0.00

15 60 3 3 3.0 0.00 0.00 7 70 3 4 3.5 0.71 0.20

15 60 2 4 3.0 0.71 0.24 6 60 3 3 3.0 0.00 0.00

20 80 4 4 4.0 0.00 0.00 7 70 3 4 3.5 0.71 0.20

Viability 4.2 0.63 8 80 4 4 4.0 0.00 0.00

22 88 3 5 4.4 0.89 0.20 3.3 0.96

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Financialassets

EasternandCentralEuropeancountries

Frequency Percentage Min Max Mean SD CV Mean SD

Relevance 4.2 0.95145318

1.FVAismorerelevantthanHCAtoshow thefairandtrueviewofthe

governmentalentity

18 90 3 5 4.5 1.00 0.22

2.FVAismorerelevantthanHCAto improvetheunderstandabilityofthe governmentalfinancialstatementsand, therefore,toimprovethetransparency offinancialinformation

17 85 3 5 4.3 0.96 0.23

3.FVAismorerelevantthanHCAto improvethecomparabilityofthe governmentalfinancialstatements amonggovernmentalentities,promoting theuseofbenchmarkingtechniques

18 90 4 5 4.5 0.58 0.13

4.FVAismorerelevantthanHCAto improvethecomparabilityofthe governmentalfinancialstatementsofthe governmentalentityitselfatprevious times

19 95 4 5 4.8 0.50 0.11

5.FVAcouldimprovethetimelinessof governmentalfinancialstatements, providingusefulinformationtoadapt publicsectorentitiestothecurrent socio-economicframework

12 60 2 4 3.0 0.82 0.27

6.FVAismorerelevantthanHCAto calculatethecostofrenderingpublic sectorservices,improvingthe assessmentofefficiency

0 0 0 0 0.0 0.00 0.00

Reliability 4.0 0.83405766

7.ThefinancialinformationunderFair valueaccountingismoreverifiable informationthanthatunderhistorical costaccounting

16 80 3 5 4.0 1.15 0.29

8.Fairvalueaccountingmeasuresthe assetsinamoreobjectivemannerthan historicalcostaccounting.

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9.Toperformfinancialaudits,fairvalue accountinghasmoreadvantagesthan historicalcostaccounting

14 70 3 5 3.5 1.00 0.29

10.Forregulatoryandcompliancepurposes, fairvalueaccountinghasmoreadvantages thanhistoricalcostaccounting

14 70 3 4 3.5 0.58 0.16

11.Theintroductionofmethodsand hypothesesusedtomeasurefairvalue accountinginthenotestofinancial statementscouldimproveitsobjectivity

18 90 4 5 4.5 0.58 0.13

12.Theintroductionofmethodsand hypothesesusedtomeasurefairvalue accountinginthenotestofinancial statementscouldimproveitsverifiability

18 90 4 5 4.5 0.58 0.13

Viability 3.9 1.13

13.Currently,reliableandgenerallyaccepted methodstoestimateFVmeasuresexist

16 80 3 5 4.0 0.82 0.20

14.Toperformfinancialaudits,thecostof usingFVmeasuresishigherthanusing HCmeasures

15 75 2 5 3.8 1.50 0.40

Relevance 3.5 1.23

1.FVAismorerelevantthanHCAtoshow thefairandtrueviewofthegovernmental entity

17 68 1 5 3.4 1.52 0.45

2.FVAismorerelevantthanHCAto improvetheunderstandabilityofthe governmentalfinancialstatementsand, therefore,toimprovethetransparencyof financialinformation

17 68 2 5 3.4 1.14 0.34

3.FVAismorerelevantthanHCAto improvethecomparabilityofthe governmentalfinancialstatementsamong governmentalentities,promotingtheuse ofbenchmarkingtechniques

18 72 2 5 3.6 1.14 0.32

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Financialassets

EasternandCentralEuropeancountries

Frequency Percentage Min Max Mean SD CV Mean SD 5.FVAcouldimprovethetimelinessof

governmentalfinancialstatements, providingusefulinformationtoadaptpublic sectorentitiestothecurrentsocio-economic framework

14 56 1 4 2.8 1.10 0.39

6.FVAismorerelevantthanHCAtocalculate thecostofrenderingpublicsectorservices, improvingtheassessmentofefficiency

16 64 3 5 4.0 0.82 0.20

Reliability 3.4 1.22

7.Thefinancialinformationunderfairvalue accountingismoreverifiableinformation thanthatunderhistoricalcostaccounting

14 56 1 5 2.8 1.79 0.64

8.Fairvalueaccountingmeasurestheassetsin amoreobjectivemannerthanhistoricalcost accounting

16 64 2 4 3.2 0.84 0.26

15 60 2 4 3.0 0.71 0.24

14 56 1 4 2.8 1.30 0.47

22 88 3 5 4.4 0.89 0.20

21 84 3 5 4.2 0.84 0.20

17 68 1 5 3.4 1.52 0.45

14.Toperformfinancialaudits,thecostof usingFVmeasuresishigherthanusingHC measures

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Descriptivestatisticsforproperty,plantandequipmentbynationalityoftheSAI.

Property,plantandequipment

Relevance 3.6 1.16510569 3.2 0.89763418

20 80 3 5 4.0 0.71 0.18 18 72 2 5 3.6 1.14 0.32

17 68 2 5 3.4 1.14 0.34 17 68 2 4 3.4 0.89 0.26

22 88 4 5 4.4 0.55 0.12 17 68 2 4 3.4 0.89 0.26

18 72 3 4 3.6 0.55 0.15 15 60 2 4 3.0 0.71 0.24

8 32 1 2 1.6 0.55 0.34 13 52 2 4 2.6 0.89 0.34

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Reliability 2.9 0.93710241 3.0 0.8304548

10 40 2 2 2.0 0.00 0.00 13 52 2 4 2.6 0.89 0.34

13 52 2 4 2.6 0.89 0.34 15 60 2 4 3.0 0.71 0.24

13 52 2 4 2.6 0.89 0.34 17 68 2 4 3.4 0.89 0.26

15 60 2 4 3.0 0.71 0.24 13 52 2 4 2.6 0.89 0.34

15 60 1 4 3.0 1.22 0.41 17 68 2 4 3.4 0.89 0.26

20 80 4 4 4.0 0.00 0.00 15 60 2 4 3.0 0.71 0.24

Viability 4.0 0.00 3.7 0.8232726

20 80 4 4 4.0 0.00 0.00 20 80 3 5 4.0 0.71 0.18

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Relevance 3.3 1.18 2.7 0.79437679

20 80 3 5 4.0 1.00 1.00 15 60 2 4 3.0 1.00 0.33

17 68 2 5 3.4 1.14 1.14 15 60 2 4 3.0 1.00 0.33

20 80 4 4 4.0 0.00 0.00 13 52 2 3 2.6 0.55 0.21

18 72 3 4 3.6 0.55 0.55 13 52 2 3 2.6 0.55 0.21

7 28 1 2 1.4 0.55 0.55 10 40 2 2 2.0 0.00 0.00

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Reliability 2.7 1.24 2.7 0.69149181

8 32 1 2 1.6 0.55 0.55 13 52 2 3 2.6 0.55 0.21

10 40 1 4 2.0 1.41 1.41 13 52 2 3 2.6 0.55 0.21

12 48 1 4 2.4 1.14 1.14 13 52 2 3 2.6 0.55 0.21

15 60 2 4 3.0 1.00 1.00 13 52 2 3 2.6 0.55 0.21

15 60 1 4 3.0 1.41 1.41 15 60 2 4 3.0 1.00 0.33

20 80 4 4 4.0 0.00 0.00 15 60 2 4 3.0 1.00 0.33

Viability 3.5 0.85 3.8 1.13529242

15 60 2 4 3.0 1.00 1.00 23 92 4 5 4.6 0.55 0.12

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Relevance 3.3 0.60647843 3.8 0.72

17 68 3 4 3.4 0.55 0.16 8 80 4 4 4.0 0 0.00

15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0 0.00

17 68 3 4 3.4 0.55 0.16 8 80 4 4 4.0 0 0.00

15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0 0.00

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Reliability 3.5 0.50741626 3.8 0.39

17 68 3 4 3.4 0.55 0.16 8 80 4 4 4.0 0 0.00

15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0 0.00

20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0 0.00

Viability 3.9 0.74 4.5 0.58

20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0 0.00

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Relevance 3.8 0.81 3.3 0.75

20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0.00 0.00

22 88 3 5 4.4 0.89 0.20 5 50 2 3 2.5 0.71 0.28

15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0.00 0.00

22 88 3 5 4.4 0.89 0.20 5 50 2 3 2.5 0.71 0.28

15 60 2 4 3.0 0.71 0.24 7 70 3 4 3.5 0.71 0.20

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Reliability 3.4 0.77 3.3 0.62

15 60 2 4 3.0 0.71 0.24 7 70 3 4 3.5 0.71 0.20

15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0.00 0.00

15 60 2 4 3.0 0.71 0.24 7 70 3 4 3.5 0.71 0.20

15 60 3 3 3.0 0.00 0.00 6 60 3 3 3.0 0.00 0.00

20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0.00 0.00

22 88 3 5 4.4 0.89 0.20 5 50 2 3 2.5 0.71 0.28

Viability 4.5 0.53 4.5 0.58

20 80 4 4 4.0 0.00 0.00 8 80 4 4 4.0 0.00 0.00

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Property,plantandequipment EasternandCentralEuropeancountries

Frequency Percentage Min Max Mean SD CV Mean SD

Relevance 3.7 1.38796138

1.FVAismorerelevantthanHCAtoshow thefairandtrueviewofthe

governmentalentity

20 80 1 5 4.0 1.73 0.43

2.FVAismorerelevantthanHCAto improvetheunderstandabilityofthe governmentalfinancialstatementsand, therefore,toimprovethetransparency offinancialinformation

18 72 1 5 3.6 1.67 0.46

3.FVAismorerelevantthanHCAto improvethecomparabilityofthe governmentalfinancialstatements amonggovernmentalentities,promoting theuseofbenchmarkingtechniques

19 76 1 5 3.8 1.64 0.43

20 80 1 5 4.0 1.73 0.43

16 64 2 5 3.2 1.10 0.34

6.FVAismorerelevantthanHCAto calculatethecostofrenderingpublic sectorservices,improvingthe assessmentofefficiency

19 76 3 5 3.8 0.84 0.22

Reliability 3.8 1.16510569

7.Thefinancialinformationunderfair valueaccountingismoreverifiable informationthanthatunderhistorical costaccounting

16 64 2 5 3.2 1.64 0.51

8.Fairvalueaccountingmeasuresthe assetsinamoreobjectivemannerthan historicalcostaccounting

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Property,plantandequipment EasternandCentralEuropeancountries

Frequency Percentage Min Max Mean SD CV Mean SD 9.Toperformfinancialaudits,fairvalue

accountinghasmoreadvantagesthan historicalcostaccounting

18 72 3 5 3.6 0.89 0.25

16 64 3 4 3.2 0.45 0.14

22 88 3 5 4.4 0.89 0.20

20 80 2 5 4.0 1.41 0.35

19 76 3 5 3.8 0.84 0.22

20 80 3 5 4.0 1.00 0.25

Relevance 3.0 1.60

1.FVAismorerelevantthanHCAtoshow thefairandtrueviewofthegovernmental entity

12 60 1 5 3.0 1.83 0.61

2.FVAismorerelevantthanHCAto improvetheunderstandabilityofthe governmentalfinancialstatementsand, therefore,toimprovethetransparencyof financialinformation

12 60 1 5 3.0 1.83 0.61

3.FVAismorerelevantthanHCAto improvethecomparabilityofthe governmentalfinancialstatementsamong governmentalentities,promotingtheuse ofbenchmarkingtechniques

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12 60 1 5 3.0 1.83 0.61

11 55 1 5 2.8 1.71 0.62

6.FVAismorerelevantthanHCAto calculatethecostofrenderingpublic sectorservices,improvingtheassessment ofefficiency

13 65 2 5 3.3 1.50 0.46

Reliability 3.4 1.18

7.ThefinancialinformationunderFairvalue accountingismoreverifiableinformation thanthatunderhistoricalcostaccounting

13 65 2 5 3.3 1.50 0.46

8.Fairvalueaccountingmeasurestheassets inamoreobjectivemannerthanhistorical costaccounting

13 65 2 5 3.3 1.50 0.46

12 60 2 4 3.0 0.82 0.27

17 85 3 5 4.3 0.96 0.23

15 75 2 5 3.8 1.50 0.40

14 70 2 5 3.5 1.29 0.37

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Statisticaltest.Parametricmethod:t-test.

Pairedt-test

T-teststatistics Correlations Paireddifferences t df Sig.(2-tailed)

Mean N Std.

deviation Std. error mean

Correlation Sig. Mean Std. deviation

Financialassetsthataretradedinanorganised,activeandliquidmarket Relevance

Anglo-American countries

17.0000 5 5.3852 2.4083 0.7096 0.1794 −39.2000 4.1473 1.8547 −44.3495 −34.0505 −21.1352 4 0.0000

Non-Anglo-American countries

56.2000 5 5.4955 2.4576

Reliability Anglo-American countries

14.3333 6 3.3267 1.3581 0.3044 0.5576 −40.3333 5.4650 2.2311 −46.0685 −34.5981 −18.0778 5 0.0000

54.6667 6 5.4650 2.2311

Viability Anglo-American countries

20.0000 2 0.0000 0.0000 −40.5000 2.1213 1.5000 −59.5593 −21.4407 −27.0000 1 0.0236

60.5000 2 2.1213 1.5000

Financialassetsthatarenottradedinanorganised,activeandliquidmarket Relevance

16.6000 5 4.9800 2.2271 0.8909 0.0426 −38.8000 2.2804 1.0198 −41.6314 −35.9686 −38.0465 4 0.0000

55.4000 5 4.7223 2.1119

13.3333 6 4.2740 1.7448 0.6518 0.1607 −40.1667 5.2313 2.1357 −45.6566 −34.6767 −18.8075 5 0.0000

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17.5000 2 3.5355 2.5000 −46.5000 3.5355 2.5000 −78.2655 −14.7345 −18.6000 1 0.0342

64.0000 2 0.0000 0.0000

Property,plantandequipmentthataretradedinanorganised,activeandliquidmarket Relevance

17.8333 6 5.2313 2.1357 0.8211 0.0452 −41.3333 3.1411 1.2824 −44.6297 −38.0369 −32.2323 5 0.0000

59.1667 6 5.2694 2.1512

14.3333 6 3.3267 1.3581 0.3860 0.4497 −44.8333 5.7764 2.3582 −50.8953 −38.7714 −19.0117 5 0.0000

59.1667 6 6.1779 2.5221

20.0000 2 0.0000 0.0000 −46.5000 0.7071 0.5000 −52.8531 −40.1469 −93.0000 1 0.0068

66.5000 2 0.7071 0.5000

Property,plantandequipmentthatarenottradedinanorganised,activeandliquidmarket Relevance

16.6667 6 4.8854 1.9944 0.5938 0.2140 −34.1667 4.7081 1.9221 −39.1076 −29.2258 −17.7758 5 0.0000

50.8333 6 5.4924 2.2423

13.3333 6 4.2740 1.7448 0.6294 0.1806 −37.5000 4.7223 1.9279 −42.4557 −32.5443 −19.4516 5 0.0000

50.8333 6 6.0470 2.4687

17.5000 2 3.5355 2.5000 −47.5000 3.5355 2.5000 −79.2655 −15.7345 −19.0000 1 0.0335

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Statisticaltest.Non-parametricmethod:Wilcoxontest.

Ranges

Negativerange Positiverange Balanced Teststatistics(j)

N Average

Financialassetsthataretradedinanorganised,activeandliquidmarket Relevance Anglo-Americanvs.

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Property,plantandequipmentthataretradedinanorganised,activeandliquidmarket Relevance Anglo-Americanvs.

0ae 0.00 0.00 2af 1.50 3.00 0ag 0.00 0.00 −1.342S 0.180

Property,plantandequipmentthatarenottradedinanorganised,activeandliquidmarket Relevance Anglo-Americanvs.

non-Anglo-Americancountries

0v 0.00 0.00 6w 3.50 21.00 0x 0.00 0.00 −2.201S 0.028

Reliability Anglo-Americanvs.

0ab 0.00 0.00 6ac 3.50 21.00 0ad 0.00 0.00 −2.207S 0.027

Viability Anglo-Americanvs.

0ah 0.00 0.00 2ai 1.50 3.00 0aj 0.00 0.00 −1.342S 0.180