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Journal of Accounting Advances (J.A.A)
Vol. 5, No. 1, 2013, Ser. 64/3
 
 
Extended Abstract
 
Investigating the Necessity and Usefulness of Establishing Conceptual Framework Based on Accounting  
Standards for Municipalities
 
Dr. G. H. Mahdavi                               M. Kazemnejad
Shiraz University
 
Introduction
Accounting standards improve the quality of general purpose financial reporting presented by public sector entities, leading to better informed assessments of the resource allocation decisions made by these entities, thereby increasing transparency, auditing process and accountability.
Regarding the importance of accounting standards (based on conceptual framework) in municipalities, this research investigated the necessity and usefulness of accounting standards in these public sector entities. In this regard, the effects of accounting standards codification on raising the qualitative characteristics of the financial reports, improving process of auditing financial reports, improving the financial management, providing the basis of place an accounting system and financial reporting based upon the discharge of accountability and possibility of performance measurement and discharge of responsible accountability were investigated.
 
Research Hypotheses
According to the theoretical basis and literature, five hypotheses were designed and tested:

Codification of accounting standards for municipalities results in raising the qualitative characteristics of financial reports. 
Codification of accounting standards for municipalities improves process of auditing financial reports.
Codification of accounting standards for municipalities leads to improving financial management.
Codification of accounting standards for municipalities provides the basis for an accounting system and financial reporting based upon the discharge of accountability.
Codification of accounting standards for municipalities predisposes the possibility performance measurement and discharge of responsible accountability.

 
Research Methodology
This research is conducted through survey. In the theoretical phase, the necessary information for the survey was gathered through reference to books, magazines, and internet databases. In the field phases, however, a questionnaire of 5 general and 40 specific questions was used. The specific questions of questionnaire were those of the closed and conditioned and have been adapted in accordance with the Likert Spectrum.
In order to gain logical certainty of the validity of the questionnaire, in addition to comments by specialists of the field, a pretest was used. The questionnaire was distributed among 125 of the statistical population, who had been randomly selected.
In order to evaluate the reliability of the questionnaire, the ά-Cronbach test was used. The calculated ά-Cronbach was over the 0.7 for all of the hypotheses, and therefore none of the questions of the questionnaire was left out.
The statistical population of the study consisted of financial deputies, chief accountants and internal auditors. In 2011, there were 91 municipalities in Fars province. This research did not utilize any sampling and all of Fars province municipalities were investigated. In the investigated population, there were 107 financial deputies and chief accountants and also 18 internal auditors. 125 questionnaires were distributed and notwithstanding the frequent follow up, 18 of internal auditors and 69 of financial deputies and chief accountants responded to the questionnaire completely.
In order to analyze the data obtained by questionnaire, descriptive and inductive statistical methods were used. For the qualitative analysis of general information obtained from the questions of the first part of the questionnaire, classification and organization of the information, relative frequency distribution and absolute frequency distribution were used. For testing the hypotheses of the study, “one-sample t-test” and “median test” were used, and then “Friedman test” was used for rating the effects of accounting standards codification on these factors. Finally for investigating the existence of the significant relationship among general and specific questions, “Kruskal-Wallis”, “analysis of variance”, “independent-sample t-test”and “Mann-Whitney” were used. SPSS was used for data analysis and conducting the above statistical tests.
 
Results
The results of “one-sample t-test” and “median test” showed that:

Codification of accounting standards for municipalities results in raising the qualitative characteristics of financial reports. 
Codification of accounting standards for municipalities improves process of auditing financial reports.
Codification of accounting standards for municipalities leads to improving financial management.
Codification of accounting standards for municipalities provides the basis for an accounting system and financial reporting based upon the discharge of accountability.
Codification of accounting standards for municipalities predisposes the possibility of performance measurement and discharge of responsible accountability.

Also the results of “Friedman test” revealed that codification of accounting standards for municipalities has the most significance on auditing process, facility of performance measurement, improvement in reporting quality, establishment of an accounting system and financial reporting based upon the discharge of the accountability and financial management betterment, respectively. At last, the results of “Kruskal-Wallis”, “analysis of variance”, “independent-sample t-test” and “Mann-Whitney” showed that none of general information has a significant effect on hypotheses, except age which has a significant effect just on the  third hypothesis.
 
Discussion and conclusion
The results of the study indicated that codification of accounting standards for municipalities has positive and significant effects on improvement in reporting quality, auditing process, financial management betterment, establishment of an accounting system and financial reporting based upon the discharge of the accountability and financial management betterment and facility of performance measurement. Therefore, the codification of accounting standards in municipalities should be commenced.
 
Keywords: Accounting Standards for Municipalities, Improvement in Reporting Quality, Auditing Process, Financial Management Betterment, Performance Measurement