COMPARAT IVE ISSUES IN LOCAL GOVERNMENT ACCOUNTING COMPARAT IVE ISSUES IN LOCAL GOVERNMENT ACCOUNTING edited by Eugenio Caperchione Universita Bocconi Riccardo Mussari Universita di Siena SPRINGER SCIENCE+BUSINESS MEDIA, LLC Library of Congress Cataloging-in-Publication Data Comparative issues in local government accounting 1 edited by Eugenio Caperchione, Riccardo Mussari. p.cm. Includes bibliographical references and index. ISBN 978-1-4613-7069-7 ISBN 978-1-4615-4581-1 (eBook) DOI 10.1007/978-1-4615-4581-1 1. Local finance-Accounting. 2. Finance, Public-Accounting. I. Caperchione, Eugenio, 1960-II. Mussari, Riccardo, 1963- HJ9773 .C5 1999 657' .835'0973-dc21 99-047415 Copyright ® 2000 by Springer Science+Business Media New York Originally published by Kluwer Academic Publishers in 2000 Softcover reprint of the hardcover 1s t edition 2000 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo copying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+Business Media, LLC Printed on acid-free paper. CONTENTS Contributors ix Foreword Xlll Eugenio Caperchione and Riccardo Mussari 1. Accounting And Accountability In Local Government: A Framework Elio Borgonovi and Eugenio Anessi-Pessina 2. A Sino-American Comparison Of Budget 11 And Accounting Coverage James L. Chan vi Contents 3. Public Sector Capital: Policy Reforms And 35 Accounting Mutations Irvine Lapsley and June Pallot 4. Financial Reporting Practice: A Comparative Study Of Local 53 Authority Financial Reports Between The UK and Malaysia Hugh M. Coombs and Mohamad Tayib 5. Trends And Open Issues in Governmental Accounting 69 Systems: Some Elements Of Comparison Eugenio Caperchione 6. Local Government Accounting In Europe: 87 A Comparative Approach Jose Manuel Vela and lluminada Fuertes 7. Municipal Accounting Reform In Flanders: 103 An Empirical Study Of The Outcomes Johan R. Christiaens 8. A Strategy For Implementing Cost Allocation 125 In A Dutch Municipality G. Jan van Helden 9. Accounting System Reform And Management 143 In The Japanese Local Government Kiyoshi Yamamoto 10. Russian Local Government Accounting: 159 New Norms And New Problems Anatoli Bourmistrov and Frode Mellemvik 11. Some Considerations On The Significance of the 175 Assets And Liabilities Statement In Italian Local Government Accounting Reform Riccardo Mussari Contents vii 12. External Reporting Of Capital Assets: 191 A Sources And Uses Model Rita H. Cheng and Jean E. Harris 13. New Public Management And Its Accounting Implications: 211 Some References To Recent Developments In Spanish Local Authorities Amparo Gimeno Ruiz 14. The Scope Of Accounting Consolidation 227 In The Local Public Sector Evelyne Lande 15. External Audit In Spanish Local Authorities 241 Vicente Montesinos Julve Index 259 CONTRIBUTORS Eugenio Anessi-Pessina Universita Cattolica del Sacro Cuore, Milan ITALY Elio Borgonovi Universita Commerciale Luigi Bocconi, Milan ITALY Anatoli Bourmistrov Bod" Graduate School of Business NORWAY Eugenio Caperchione Universita Commerciale Luigi Bocconi, Milan ITALY x Contributors James L. Chan University of Illinois at Chicago U.S.A. RitaH Cheng University of Wisconsin at Milwaukee U.S.A. Johan R. Christiaens University of Gent BELGIUM Hugh M Coombs University of Glamorgan, Wales UNITED KINGDOM I1uminada Fuertes Universitat Jaume I, Caste1l6n SPAIN Amparo Gimeno Ruiz Universitat de Valencia SPAIN Jean E. Harris Penn State University at Harrisburg U.S.A. Evelyne Lande Conservatoire National des Arts et Metiers, Paris FRANCE Irvine Lapsley University of Edinburgh, Scotland UNITED KINGDOM Frode Mellemvik Booo Graduate School of Business NORWAY Contributors Xl Vicente Montesinos Julve Universitat de Valencia SPAIN Riccardo Mussari University of Siena ITALY June Pal/ot University of Canterbury NEW ZEALAND Mahamad Tayib University Utara Malaysia, Sintok MALAYSIA G. Jan van Heiden University of Groningen THE NETHERLANDS Jose Manuel Vela Universitat Jaume I, Caste1l6n SPAIN Kiyoshi Yamamoto Okayama University JAPAN FOREWORD For some years now, a large number of European and extra-European countries have been implementing highly significant reforms to their accounting systems both at central and local government levels. The innovative scope of these changes cannot be fully understood by simply describing what has happened or by making a solely technical appraisal of the solutions adopted. These accounting reforms are part of far-reaching and complex processes of social change, that in many cases stem from the need to define new grounds for the role that the Government at all levels is called upon to play in modern economies and thus, in other words, for the relationships between Government and citizens. This is the reason why it is not possible to fully grasp the underlying causes leading to accounting innovations in local governments and, consequently, to assess their effectiveness, unless an effort is made at relating these innovations to the ongoing changes in the social, economic and political environments in which governments at all levels have to operate. This is exactly the aim of this volume. Obviously enough, it is very difficult to identify and suggest one single key to the interpretation of the changes under way when reference is being made to such a large group of countries as those observed throughout this book. Differences can be found in the stages of economic development, in the forms of government, geographic sizes, history, accounting traditions, legal culture, State and government models, the roles ascribed to central and local government levels, and in how accounting standards are set out and reviewed.