The credibility of finance committees and information usage: trustworthy to whom?

IMPACT

Local government politicians in Brazil were found to perceive the reports and referrals from legislative finance committees as trustworthy depending on the political scenario in which the report was generated. Information usage by politicians then depended on partisan demands—whether they were in opposition or in government. The quality of the accounting information delivered by finance committees needs to be improved and councillors should be encouraged to consider and use financial information more widely: not just in debates in council. Council finance committees could usefully include external specialists to validate referrals and tighten ties with audit institutions.

ABSTRACT

Analysing municipal councils in Brazil, this article contributes to the understanding of how politicians use accounting information in terms of the dynamics of collective political decisions. Depending on their political position, the authors investigated whether councillors seek accounting information to cope with varied objectives rather than a unified decision-making process. A survey of local finance committee members showed that information source credibility is a sensitive construct with multiple meanings influenced by the political environment. This article adds to prior literature on the demand and supply sides of information.

KEYWORDS:

• Accounting information
• Brazil
• coalition power
• finance committees
• local government finance
• source credibility

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.