This research was carried out with financial support from the Regional Government of Andalusia (Spain), Department of Innovation, Science and Enterprise (research project number P09-SEJ-5395) and from the Spanish National R&D Plan through research projects numbers ECO2010-17463-ECON and ECO2010-20522-ECON (Ministry of Science and Innovation). The authors also wish to thank the collaboration of all persons and institutions that answered the survey.
The Role of Fair Value Accounting in Promoting Government Accountability
Article first published online: 29 JAN 2012
© 2012 The Authors. Abacus© 2012 Accounting Foundation, The University of Sydney
Volume 48, Issue 3, pages 348–386, September 2012
How to Cite
Rodríguez Bolívar, M. P. and Navarro Galera, A. (2012), The Role of Fair Value Accounting in Promoting Government Accountability. Abacus, 48: 348–386. doi: 10.1111/j.1467-6281.2011.00352.x
- Issue published online: 2 SEP 2012
- Article first published online: 29 JAN 2012
- Fair value;
- Financial accountability;
A key factor to improve the financial accountability of governments is the existence of a set of generally accepted financial reporting of standards, such as IPSAS issued by the IFAC, which seek to enhance information transparency. This paper examines the capability of fair value accounting to improve, through financial transparency, government accountability, analysing the possible effect of the implementation of this measurement basis on understandability, comparability and timeliness—three qualitative characteristics linked to the relevance of financial reporting. This paper further considers whether the difficulties involved in achieving FV estimations could affect government financial accountability. The findings indicate that FVA implementation could enhance accountability by improving understandability, comparability and timeliness in governmental financial reporting, although the use of objective measures to estimate the FV of assets is fundamental. In addition, the type of assets and the existence of an active market are crucial to improving the comparability of financial statements under FVA, whereas improving timeliness could be limited by the possibility of estimating FV measures in-house.