Accrual accounting does not necessarily mean accrual accounting: compliance with standards in Swedish municipal accounting

Pär Falkman, Torbjörn Tagesson

    Research output: Book/ReportReport

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    The  regulation  of  Swedish  municipal  accounting  has  undergone  fundamental changes over recent decades. Municipal accounting became regulated by law the 1st of January, 1998, after having been merely voluntarily regulated in the past. In accordance  with  the  legislation,  a  standard-setting  body  was  formed,  with responsibility   for   development   and   interpretation   of   generally   accepted accounting principles for municipal accounting. Important aims of the legislation and  reform were to suppress ‘creative’ accounting and to increase the level of harmonisation and comparability. Using the lens of positive accounting theory as well  as  institutional theory, this paper describes and explains the impact of the legislation and standard setting in the Swedish municipal sector. We have used a triangulation approach, collecting data through a survey, documentary study and interviews. The overall results show that the reform has had a very limited impact on accounting practice. Compliance with accounting standards and legislation was in general poor. This result is in line with the assumptions of positive accounting theory.  However,  the  study  also  shows  that  there  are  differences  among  the preparers.   The   supposition,   suggested   by   institutional   theory,   that   large municipalities should produce  better  accounting information (i.e. more in line with generally accepted accounting principles) than the municipalities in general, could not be rejected. Weak audit  quality  seems to be another important factor that explains the poor compliance with accounting standards.

    Original languageEnglish
    Place of PublicationKristianstad
    PublisherDepartment of Business Studies, Kristianstad University College
    Publication statusPublished - 2006

    Publication series

    NameWorking paper series
    ISSN (Print)1650-0636

    Swedish Standard Keywords

    • Business Administration (50202)


    • accounting standards
    • compliance
    • institutional theory
    • legislation
    • municipalities
    • positive accounting theory


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