Users of Local Government Annual Reports: an Exploratory Study

Abstract

The nature of financial reporting in the public sector in Australia has undergone substantial change in the last twenty years. One result has been the promulgation of public sector accounting standards based on the private sector conceptual framework for general purpose financial reports. A central key to this framework is the existence of users and their needs. This framework emphasises the provision of information for users for the purpose of decision making. Critics of the framework as it applies to the public sector claim that it lacks empirical substantiation and ignores the complexity and diversity of public sector institutions. This paper examines and analyses the annual report distribution lists for local government authorities within Queensland and provides empirical evidence on distribution patterns. The study finds that there are user groups which fall outside the categories identified by the conceptual framework. Further, there is a wide variety in the dissemination lists of local government authorities and cross sectional differences in the distribution patterns for urban and rural local government authorities. The results of this research raise important questions for public sector accounting regulators regarding the appropriateness of assuming that there exists a homogeneous set of users for all public sector entity types.