How useful is consolidation of public sector entities' financial statements ?

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Serval ID
serval:BIB_F3D12CE46118
Type
Report: a report published by a school or other institution, usually numbered within a series.
Publication sub-type
Working paper: Working papers contain results presented by the author. Working papers aim to stimulate discussions between scientists with interested parties, they can also be the basis to publish articles in specialized journals
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Publications
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Title
How useful is consolidation of public sector entities' financial statements ?
Author(s)
Soguel N., Bucher R.
Institution details
IDHEAP
Issued date
2013
Genre
Working paper de l'IDHEAP
Language
english
Number of pages
15
Notes
Paper presented at the 2013 Annual Conference of the EGPA-European Group for Public Administration in the permanent Study Group "Public Sector Financial Management" Edinburgh, Scotland, September, 11 to 13 2013
Abstract
Whether or not to consolidate financial statements is dealt with in IPSAS#6. This standard is by and large based on IAS#27. It deals with the criterion according to which an entity's financial statements should be considered and which consolidation technique should be used. However, it remains silent when it comes to exposing the reason why a public sector entity should consolidate its financial statements. The literature is almost as silent as IPSAS on this issue. Which means that there is a lack of both theoretical and empirical knowledge on this subject. This paper explores the usefulness of the consolidation of financial statements (CFS) for different categories of users. It aims at investigating for which purposes consolidation is most useful and whether enlarging the scope of the consolidate group serves these purposes. Five purposes are considered: information, decision- making, accountability, risk-assessment, statistics improvement. The paper also aims at investigating if some categories of users consider CFS more useful than others. The issue is essentially empirical. Therefore it is examined in light of the results of an in-person interviews. We surveyed 25members of parliament, officials, creditors, and consultants of the Swiss central government. The results show that consolidating FS is considered especially important and useful for risk- assessment, information and accountability and to a somewhat lesser extent for decision-making and statistics improvement. Extending the scope of CFS may improve the situation when it comes to statistics but it would only marginally make CFS more relevant for decision making. Consultants and, to a lesser extent, members of the finance ministry are those respondents who deem the scope enlargement to be the most useful.
Keywords
Accounting, consolidation, IPSAS 6, survey, users' needs
Create date
25/08/2015 6:49
Last modification date
20/08/2019 16:20
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