Financial Reporting Practice: A Comparative Study of Local Authority Financial Reports Between the UK and Malaysia

Abstract

The paper is concerned with examining the financial reporting practices of local authorities in two divergent economic environments - the UK with its long and well established industrial and financial base and the rapidly emerging ‘tiger’ economy of Malaysia. There has been little previous research on the issue of comparative financial reporting practices between countries in the public sector in general and, specifically, in the local authority context. There are, however, numerous previous studies on the comparative international financial reporting practices of private sector firms (see, for example, Gray and Roberts, 1986; Benjamin and Stanga, 1977; Tayib, 1987; Choi and Mueller, 1992). Similarly textbooks on international accounting tend to ignore the public sector (Mueller et al. (1997), Nobes and Parker (1995), Haskins et al. (1996). One example of comparative work between the published accounts of local authorities is the study carried out by the UK researchers Jones and Pendlebury (1982) on reporting practices of UK and European local authorities. This study concentrated primarily on the analysis of the form and content of UK local authority published accounts although some reference is made to continental European local authority accounts. Coombs and Liberman have examined financial reporting in the former Soviet Union and UK local authorities (1990 and 1994) although this work was not strictly comparative.