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Explaining the choice of accounting standards in municipal corporations: Positive accounting theory and institutional theory as competitive or concurrent theories

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  • Collin, Sven-Olof Yrjö
  • Tagesson, Torbjörn
  • Andersson, Anette
  • Cato, Joosefin
  • Hansson, Karin

Abstract

Municipal corporations exist in an institutional twilight area, being both private and public, a characteristic, which presumably would be reflected in their choice of accounting standards. The literature of accounting choice does not, however, live in a twilight area, but is fragmented into two main divisions: positive accounting theory (PAT) and institutional theory (IT); only in a very few cases do the theories meet or cross-fertilize. We use both theories in this paper and derive hypotheses from them to explain accounting choices made by municipal corporations. Through testing the hypotheses on a sample of 545 Swedish municipal corporations, we indicate the empirical relevance of both PAT and IT. We conclude by suggesting an integrative approach of PAT and IT in an eclectic alternative.

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  • Collin, Sven-Olof Yrjö & Tagesson, Torbjörn & Andersson, Anette & Cato, Joosefin & Hansson, Karin, 2009. "Explaining the choice of accounting standards in municipal corporations: Positive accounting theory and institutional theory as competitive or concurrent theories," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 20(2), pages 141-174.
    • Handle: RePEc:eee:crpeac:v:20:y:2009:i:2:p:141-174
    DOI: 10.1016/j.cpa.2008.09.003
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    5. Dominique Dufour & Pierre Teller & Philippe Luu, 2014. "A neo-institutionalist model of the diffusion of IFRS accounting standards," Post-Print hal-00719046, HAL.
    6. Guerreiro, Marta Silva & Rodrigues, Lúcia Lima & Craig, Russell, 2012. "Voluntary adoption of International Financial Reporting Standards by large unlisted companies in Portugal – Institutional logics and strategic responses," Accounting, Organizations and Society, Elsevier, vol. 37(7), pages 482-499.
    7. Mari Kobayashi & Kiyoshi Yamamoto & Keiko Ishikawa, 2016. "The Usefulness of Accrual Information in Non‐mandatory Environments: The Case of Japanese Local Government," Australian Accounting Review, CPA Australia, vol. 26(2), pages 153-161, June.
    8. Oulasvirta Lasse Olavi, 2014. "Governmental Financial Accounting and European Harmonisation: Case Study of Finland," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 4(3), pages 237-263, December.
    9. Rhys Andrews, 2022. "Organizational Publicness and Mortality: Explaining the Dissolution of Local Authority Companies," Public Management Review, Taylor & Francis Journals, vol. 24(3), pages 350-371, March.
    10. Torbj�rn Tagesson & Nicoletta Glinatsi & Martina Prahl, 2015. "Procurement of audit services in the municipal sector: the impact of competition," Public Money & Management, Taylor & Francis Journals, vol. 35(4), pages 273-280, July.
    11. David Gulayin, 2018. "Divulgación de información financiera por parte de los gobiernos locales: Análisis de sus determinantes en Provincia de Buenos Aires," CEFIP, Working Papers 025, CEFIP, Universidad Nacional de La Plata.
    12. Abdulateif A. Almulhim & Abdullah A. Aljughaiman, 2023. "Corporate Sustainability and Financial Performance: The Moderating Effect of CEO Characteristics," Sustainability, MDPI, vol. 15(16), pages 1-21, August.
    13. Dominique Dufour & Pierre Teller & Philippe Luu, 2014. "A Neo-institutionalist Model of the Diffusion of IFRS Accounting Standards," Computational Economics, Springer;Society for Computational Economics, vol. 44(1), pages 27-44, June.
    14. Pierre Teller & Philippe Luu & Dominique Dufour, 2013. "A neo-institutionalist model of the diffusion of IFRS accounting standards," Working Papers hal-00719046, HAL.
    15. Shohei Nagasawa, 2018. "Asymmetric cost behavior in local public enterprises: exploring the public interest and striving for efficiency," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 29(3), pages 225-273, December.
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    17. Kilfoyle, Eksa & Richardson, Alan J., 2011. "Agency and structure in budgeting: Thesis, antithesis and synthesis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 22(2), pages 183-199.

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