Accounting and auditing in municipal organisations – Four papers on accounting compliance and audit costs

Abstract: Popular Abstract in English Over the last 30 years, the implementation of accrual accounting in public sector settings has been fundamental to public sector accounting policy development. The move from cash accounting to accrual accounting highlights the importance of understanding accounting choice, compliance and auditing in municipal organisations. This thesis is a quantitative study of accounting compliance and audit costs in Swedish municipal organisations, consisting of four papers. Three of the papers explore factors that explain accounting compliance concerning financial reporting and revenue recognition in Swedish municipal water, sewerage and solid waste management organisations. The fourth paper explores the determinants of professional audit costs in Swedish municipal administrations. The overall purpose of this thesis is to contribute to the knowledge of what factors influence accounting compliance and audit costs in municipal organisations. The results indicate that the strength and the strictness of the institutional framework (legislation, sanctions, court cases) play an important role in relation to if and how accounting compliance and audit costs are influenced by economic, political and institutional factors. Further, the studies show that major municipal governance reforms such as deregulation, corporatisation, regionalisation and cross-sectoral coordination influence accounting compliance. Thus, the conducted research also provides some evidence on the intended and unintended consequences of municipal reforms. From a policy perspective, this thesis suggest that future accounting regulation and audit control need to bridge the public–private sector divide, level out sector-specific regulations and possibly connect regulation and accountability to the consolidated municipal organisation in order to preserve organisational freedom while securing compliant accountability information to relevant stakeholders.