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


  • Falkman, Pär
  • Tagesson, Torbjorn


Summary 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 harmonization 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 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 which can be explained by institutional theory. Large municipalities produce better accounting information (i.e. more in line with generally accepted accounting principles) than the municipalities in general. Weak audit quality seems to be another important factor that explains the poor compliance with accounting standards.

Suggested Citation

  • Falkman, Pär & Tagesson, Torbjorn, 2008. "Accrual accounting does not necessarily mean accrual accounting: Factors that counteract compliance with accounting standards in Swedish municipal accounting," Scandinavian Journal of Management, Elsevier, vol. 24(3), pages 271-283, September.
  • Handle: RePEc:eee:scaman:v:24:y:2008:i:3:p:271-283

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    Cited by:

    1. Diana Balaciu & Victoria Bogdan & Alina Beattrice Vladu, 2009. "A Brief Review Of Creative Accounting Literature And Its Consequences In Practice," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 1-16.
    2. 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.
    3. Torbjörn Tagesson & Michelle Klugman & Maria Ekström, 2013. "What explains the extent and content of social disclosures in Swedish municipalities’ annual reports," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(2), pages 217-235, May.


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