New development: Politicians and consolidated financial statements. The role ofaccounting information in local government

IMPACT
This article underscores the limited usability that local politicians make of consolidated financial statements (CFS): particularly within smaller municipalities. The findings suggest that financial stress amplifies reliance on CFS, thereby influencing decision-making and oversight processes. These insights contribute to future research on politicians’ informational requisites and assist policy-makers in enhancing the utility of financial reporting. A notable limitation is that the conclusions are drawn exclusively from the perceptions of financial officers, without direct input from the politicians themselves.

ABSTRACT
This study investigates how politicians perceive the accounting information provided by consolidated financial statements (CFS) in Italian local governments, several years post-mandatory adoption. Drawing upon a 2023 survey of municipal financial officers from a stratified sample of 1,113 local governments, the findings reveal that politicians’ utilization of CFS varies according to municipality size and fiscal conditions. Specifically, larger municipalities and those experiencing financial stress show greater reliance on CFS data, whereas smaller municipalities demonstrate a lesser dependence on such information.