More than a compliance exercise? The case of consolidated financial accounts in Swedish municipalities

Figures & data

Table 1. Descriptive statistics.

Variables		N	Minimum	Maximum	Mean	SD	Total	%
Dependent variables
CFAs in the interim report	No (0)						340	39.2
	Yes (1)						527	60.8
Independent variables
First year after deregulation (Y2019)	No (0)						578	66.7
	Yes (1)						289	33.3
Second year after deregulation (Y2020)	No (0)						578	66.7
	Yes (1)						289	33.3
Consolidated corporations		867	0	60	7.23	7.695
Size turnover		867	-.008	1.801	.182	.160
Size assets		867	-.119	.727	.354	.179
Control variables
Change in government	No (0)						486	56.1
	Yes (1)						381	43.9
Majority rule	No (0)						369	42.6
	Yes (1)						498	57.4
Equity ratio		867	-.302	.683	.187	.138
Financial result		867	-17181.566	26194.502	2213.989	2798.3463
Ruling government	Right-wing						411	47.4
	Left-wing						114	13.1
	Mixed						342	39.5
Audit firm	Deloitte						28	3.2
	EY						162	18.7
	Internal audit office						24	2.8
	KPMG						272	31.4
	Small audit firm						14	1.6
	PwC						367	42.3

Note: Financial result (municipal group) = result/inhabitant.

Figure 1. Number of municipalities preparing/not preparing CFAs in their interim report (N = 289).

Note: In 2018, municipalities that exceeded any of the specified 30% thresholds in SCMA Accounting Standard No. 22 were required to include CFAs in their interim reports. However, starting in 2019, the inclusion of CFAs in the interim reports became voluntary for all municipalities.

Table 2. Correlations and logistic regressions.

			Model 1a (N = 867)		Model 1b (N = 867)		Model 2a (N = 708)		Model 2b (N = 708)
	Correlations		Logistic regression analyses (panel data; random effects)
Y = CFAs in the interim report	Spearman	Pearson	Odds ratio	Std. err.	Odds ratio	Std. err.	Odds ratio	Std. err.	Odds ratio	Std. err.
First year after deregulation (Y2019)	-.038	-.038	.282***	.010	.284***	.010	.158***	.066	.159***	.067
Second year after deregulation (Y2020)	-.043	-.043	.289**	.106	.283**	.105	.148***	.064	.152***	.066
Consolidated corporations (log)	.192***	.215***	7.200**	4.2103			4.857**	2.420
Size turnover (log)	.201***	.160***			3077.858*	10262.69			126578.3***	423927.8
Size assets (log)	.156***	.171***	2344.38**	6339.718	4125.85**	11712.42	616714***	1511485	175783.6***	430011.9
Change in government	-.043	-.043	.385	.610	.315	.518	.274	.337	.298	.362
Majority rule	-.003	-.003	2.222	1.613	1.814	1.372	1.457	.860	1.162	.676
Right-wing	-.013	-.013	2.120	1.677	1.853	1.535	2.280	1.468	2.116	1.345
Left-wing	.068*	.068*	8.361	9.147	6.712^†	7.447	1.484	1.276	1.041	.892
Equity ratio	-.017	-.005	.028	.077	.062	.176	.024	.055	.024	.054
Financial result	.121***	.082*	1.000	.000	1.000	.000	1.000	.000	1.000	.000
Deloitte	-.014	-.014	3.708	5.352	3.354	4.768	.724	1.088	.645	.955
EY	.027	.027	2.007	1.588	2.104	1.700	.953	.654	.780	.534
Internal audit office	.121***	.121***	190.400^†	558.073	1562.821*	4712.285	38.669	97.050	96.392^†	249.942
KPMG	.044	.044	1.068	.695	1.189	.770	.710	.424	.826	.488
Small audit firm	-.066^†	-.066^†	.257	.710	.119	.331	4.397	12.065	2.622	6.929
Constant			.017	.024	.156	.204	.075	.089	.392	.380
/lnsig2u			3.280	.254	3.352	.257	2.339	.300	2.318	.304
sigma_u			5.156	.654	5.345	.686	3.220	.482	3.187	.484
rho			.890	.025	.897	.024	.759	.055	.755	.056
			LR chi^2 = 296.99***		LR chi^2 = 304.10***		LR chi^2 = 104.79***		LR chi^2 = 97.78***
			Wald chi^2 = 44.66***		Wald chi^2 = 39.35***		Wald chi^2 = 52.16***		Wald chi^2 = 51.76***
Highest VIF			1.93		1.79		1.93		1.79

Notes: ***p < .001, **p < .01, *p < .05, ^†p < .10; Variables with (log) = the natural logarithm of the variable; Models 2a and b exclude the 53 municipalities that were noncompliant with the 2018 legislation to test the stability of the results in Models 1a/b.