Infrastructure reporting by local governments - An investigation of the perceptions of annual report recipients and preparers

Abstract

The aim of the study is to investigate the convergence or divergence of the perceptions of annual reports recipients/users and preparers with respect to reporting of infrastructure assets in the annual report and to identify the contextual factors that affect infrastructure reporting by local governments. The study includes the survey and interview of annual report recipients and infrastructure information preparers followed by the content analysis of infrastructure information disclosure in annual reports of New Zealand local governments. Lüder’s (1992) contingency model of public sector accounting innovations is adopted to identify the contextual factors affecting infrastructure reporting by New Zealand local governments. The study finds that the perceptions of annual report recipients and preparers on the importance of infrastructure information reporting converge, which is consistent with the expectations of Lüder’s (1992) contingency model. On the other hand, although the perceptions of annual report recipients and preparers converge, the information required by the recipients are not reported by local governments. This later finding is not consistent with the expectations of Lüder’s model.The study identifies that the principal contextual factors that are adversely affecting infrastructure reporting of New Zealand local governments are legislation and lack of local governments’ resources. The study contributes towards theoretical development by testing Lüder’s (1992) contingency model in the context of infrastructure reporting by New Zealand local governments and proposing a model of contextual factors through extending the Lüder’s model. The practical contribution of the study is in the area of accounting practice and public policy. The study is expected to contribute towards the future development of infrastructure related reporting standards for local governments. The study contributes towards future development of public policy by outlining the need to recognise the significance of consultation with citizens and need for funnelling resources to local governments to enhance their governance and accountability.