CREATIVE ACCRUAL ACCOUNTING IN THE PUBLIC SECTOR: ‘MILKING’ WATER UTILITIES TO BALANCE MUNICIPAL BUDGETS AND ACCOUNTS |
| |
| Authors: | Eija M Vinnari Salme Näsi |
| |
| Institution: | 1. Research Scientist, Tampere University of Technology, Institute of Environmental Engineering and Biotechnology;2. and Professor, University of Tampere, Department of Economics and Accounting;3. The authors are respectively Research Scientist, Tampere University of Technology, Institute of Environmental Engineering and Biotechnology;4. and Professor, University of Tampere, Department of Economics and Accounting. |
| |
| Abstract: | Traditionally, the financial balance of public sector economic entities has been determined by balanced budgets and cash‐based or modified cash‐based budgetary accounting. Since the 1990s the superiority of accrual accounting in the public sector context has been emphasized by both practitioners and academics. This paper demonstrates that accrual accounting also offers opportunities for the use of creative accounting, or earnings management, in the public sector, at least as long as accounting is performed in accordance with diverse national norms instead of internationally acceptable accounting standards. |
| |
| Keywords: | public sector accrual accounting creative accounting intergenerational equity water utilities |
|
|
