Relation between internet financial information disclosure and internal control in Spanish local governments
| Pages | 176-194 |
| Date | 18 March 2019 |
| Published date | 18 March 2019 |
| DOI | https://doi.org/10.1108/AJIM-06-2018-0150 |
| Author | María del Rocío Moreno-Enguix,Ester Gras-Gil,Joaquín Henández-Fernández |
Relation between internet
financial information disclosure
and internal control in
Spanish local governments
María del Rocío Moreno-Enguix, Ester Gras-Gil and
Joaquín Henández-Fernández
Universidad de Murcia –Campus de Espinardo, Murcia, Spain
Abstract
Purpose –The application of new public governance by many countries has led to the creation of new
management systems in public administration and the development of an effective accounting structure
with efficient internal control to guarantee a proper provision of services that meet citizens’requirements.
The purpose of this paper is to focus on Spanish local government with the intention of determining the
impact of the internal control structure on the disclosure of financial information on the internet.
Design/methodology/approach –The empirical analysis used combines a descriptive aspect with an
explanatory one and seeks to answer the question of whether the internal control system (ICS) influences the
disclosure of financial information on the websites of Spanish LGs. The authors use a multivariate model that
allows us to verify the predictive capability of the previously defined explanatory variable, internal control, in
1,806 local governments. To test the hypotheses, the authors use two different models.
Findings –The authors consider the existence and quality of the financial information disclosure in relation
to ICSs, and a series of financial and non-financial variables. The authors conclude that the structure of the
ICS influences financial information disclosure and its quality. Also, the socio-political variable gives a better
explanation of financial information disclosure than the financial variable.
Originality/value –This research is novel to determine whether the development of ICSs in Spanish
municipalities has favored and increased the disclosure of financial information financial through the
municipalities’website transparency portal. These findings will contribute to increase the importance of
internal control in the management of public entities.
Keywords Internet, Transparency, Internal control,Financial disclosure, Financial information, Local entities
Paper type Research paper
1. Introduction
The application of new technologies in the development of the activities of the public
administrations and the need to improve the information provided by these institutions to
the citizens has determined the development of the new public management systems, NPG.
These NPG try to ensure the highest quality in the provision of public services through
effective use of public resources and a more direct relationship with citizens through the
new virtual communication systems, ITC and the creation of a digital administration,
e-government (Bertot et al., 2010; Halachmi and Greiling, 2013). In addition, they aim to
increase transparency in the exercise of their activities through the publication on their
websites of relevant financial information, so making public the financial situation, which
can be compared with other institutions of similar characteristics (Ferraz-Esteves de Araujo
and Tejedo-Romero, 2016; Tejedo-Romero and Ferraz-Esteves de Araujo, 2018).
These digital management systems, e-government, allow more direct communication
with citizens, enabling them to participate and get involved in the provision of public
services (Cornero, 2012). E-government is of special relevance in local authorities since they
have a more direct and closer relation with citizens due to the powers assigned to them.
The economic crisis of the past few years, cases of corruption and the demand by citizens for
greater transparency in the use of public resources have been a major boost to the
Aslib Journal of Information
Management
Vol. 71 No. 2, 2019
pp. 176-194
© Emerald PublishingLimited
2050-3806
DOI 10.1108/AJIM-06-2018-0150
Received 22 June 2018
Revised 19 September 2018
15 November 2018
Accepted 28 November 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2050-3806.htm
176
AJIM
71,2
development of e-government at the local level, and especially to the space devoted to their
web pages to presenting financial information (Albalate, 2013). In addition, during these
years there has been a modification of the systems of accounting and internal control of
these institutions (Heald and Hoges, 2015; Clayton et al., 2015; Van der Kolk et al., 2015),
with the aim of reducing corruption, improving the efficiency in the implementation of the
financial resources and developing homogeneous economic and financial information
documents to be published on their websites, through their transparency portals (Lee and
Kwak, 2012; Fung, 2013).
Spanish local authorities represent a cornerstone in the structure of Spanish public
administration. These entities are assigned a lot of powers and are the public body that is
closest and most committed to the delivery of public services to citizens. In addition, local
authorities have to manage a large volume of public resources, although they are not subject
to external audits. The economic crisis and numerous cases of corruption affecting these
entities have led to the adoption of a series of measures to promote transparency and
financial control of these entities (Pérez-López et al., 2013). The adoption law 19/2013
Transparency, access to public information and good government has forced local
authorities to make a great effort in the development of e-government and the creation of a
portal for transparency on their websites to publish their annual accounts, contracts, grants
and other financial information. With this policy, the government seeks to increase the
financial transparency of these institutions, to homogenize the financial information
published and to encourage citizen participation and information, as is done in other
developed countries.
Compliance with this regulation by the Spanish local authorities is difficult to determine
since these institutions are not subject to external audits and a large part of the activities
and operations carried out are not subject to control by external and independent bodies.
There is only one system of control established by the rules and regulations governing
internal intervention or control in these entities, which supervises the making or delivery of
a certain number of economic public services before this occurs and also monitors
compliance with the obligations of these institutions in the area of transparency. However,
the internal control system (ICS) is not the same in all Spanish local authorities, and
therefore, it is difficult to ensure inter alia that all of them are fulfilling their obligations
when presenting their financial information on their transparency portals on time and with
necessary quality. In addition, these entities are not required to report on the characteristics
of their ICSs. Despite the difficulties, some authors (Cárcaba-García and García-García, 2008;
Gandía and Archidona, 2008) have analyzed, through the development of indices, the degree
of compliance with this regulation, but do not verify the quality of their information, since,
they do not check if these entities are subject to a process of internal control when preparing
their economic and financial information.
The main objective of this work is to determine how the ICS of the local authorities
influences the financial information presented in their transparency portals. It was
necessary to determine which local entities have an ICS, and what their characteristics are,
but this information is very difficult to obtain. In addition, following the methodology
used by other authors (Cárcaba-García and García-García, 2008; Gandía and Archidona,
2008), we have prepared an index related to the financial information that these entities
publish on their transparency portals, analyzing the quality and compliance using the terms
established by the law for publication. We also consider it of great interest to determine if
other social, political or fiscal variables influencing the financial information published
on the transparency portals, as other authors (Cárcaba-García and García-García, 2008;
Albalate, 2013; Frias et al., 2014) have done.
The paper is organized as follows. Section 2 describes previous studies and literature on
management accounting of LGs in Spain; Section 3 defines our model and methodology;
177
Internet
financial
information
disclosure
Get this document and AI-powered insights with a free trial of vLex and Vincent AI
Get Started for FreeStart Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting