Does personal background influence a finance minister to cook the books ? : An investigation of creative accounting in Swiss cantons

Details

Serval ID
serval:BIB_8DE42DE28B51
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Does personal background influence a finance minister to cook the books ? : An investigation of creative accounting in Swiss cantons
Journal
Applied Economics
Author(s)
Clémenceau M., Soguel N.
ISSN
0003-6846 (Print)
1466-4283 (Electronic)
Publication state
Published
Issued date
2016
Volume
49
Number
10
Pages
941-953
Language
english
Notes
Published online: 16 Jul 2016
Abstract
This article aims to identify the factors influencing the use of creative accounting in the public sector. Its distinctive feature is that it sheds light on creative accounting when used, not to hide public deficits, but to conceal surpluses. It especially explores the impact of the finance minister's (FM)'s background on the phenomenon. We take advantage of the quasi-experimental settings of the Swiss cantons in which the financial management act sets out the possibility of implementing certain accounting gimmicks, including mainly additional 'depreciation' charges. These charges, which are depreciations in name only, enable the FM to artificially inflate expenses, thus increasing the deficit or reducing the surplus. Our panel data set of the 26 cantons over the period 1980-2012 includes a new data set of creative accounting and of 116 cantonal FMs. Our results indicate that the FMs cook the books irrespective of their personal or ideological background with the exception that trained economists tend to apply creative accounting more. Additionally, stringent fiscal rules urge FMs towards more surplus-hiding accounting.
Keywords
Creative accounting, fiscal performance, surpluses, finance ministers, personal background, budget rules
Create date
08/08/2016 8:35
Last modification date
21/08/2019 6:16
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