Playing for keeps: local government distortion of depreciation accruals in response to high-stakes public policy-making

Abstract

Use of discretionary accounting accruals has long been recognized as a vehicle for earnings management in the private sector. More recently, evidence has emerged suggesting that public officials may similarly manipulate discretionary accruals in order to achieve ‘balanced’ operating results. This paper extends the previous literature on the manipulation of depreciation accruals to the realm of high-stakes public policy-making.

Keywords:

• Depreciation distortion
• depreciation manipulation
• high-stakes public policy
• performance management
• performance monitoring

Additional information

Notes on contributors

Joseph Drew

Joseph Drew is a Lecturer at the Institute of Public Policy & Governance, University Technology Sydney, Australia and Adjunct Professor at Tokyo Metropolitan University, Japan.