Drivers for the voluntary adoption of consolidated financial statements in local governments

IMPACT The study highlights the benefits of a testing period for local government politicians and managers when important accounting reforms, such as implementing consolidated financial statements (CFS), are being introduced. A testing period can enhance knowledge on the accounting standards, as well as improving employees' skills and citizens' perception of local government performance. Central governments are encouraged to provide technical assistance to local governments through training or providing manuals to facilitate the implementation of CFS. Moreover, feedback from the testing period could support the revision of accounting rules and standards.