This article presents evidence suggesting that Swedish municipalities use discretion associated with the accounting for depreciation and asset write‐offs to manage externally reported financial performance. The general hypothesis that is proposed and tested is that they use this discretion for purposes of reporting small surpluses across accounting periods (i.e., smoothing). The article identifies two strategies for achieving this reporting objective, including the use of the discretion to (1) systematically increase expenses during reporting years when these can be absorbed by surpluses; and (2) to systematically increase them during periods when large deficits are reported. The latter strategy is referred to as the ‘big‐bath strategy’ and involves systematic ‘dumping’ of expenses on already poor results. Both strategies support the above reporting objective, by setting the stage for the reporting entity to more effectively reach the reporting objective in future accounting periods. Given the findings that are presented, it is recommended that accounting standard setters ought to consider a review of standards guiding the level of discretion and accompanying disclosure requirements.

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This paper seeks to advance knowledge about congressional use of the program assessment rating tool (PART) in the 109th Congress. The research suggest that both congressional chambers use PART on a limited basis; affirms that congressional committees are exposed to PART scores through congressional budget justification score inclusion and in federal agency testimony; and that use was primarily driven by non-congressional actors.

The selection of actuarial assumptions used to value state and local government pension liabilities is an important culprit of the looming state and local pension crisis in the U.S. Due to the impact these selection choices have on the value of pension liabilities and annual required contributions (ARC), pension plans are often said to make these choices opportunistically for purposes of freeing up budget resources and making pension funding look better. Using empirical data on 114 state-administered pension plans, this research shows that the likelihood of such opportunistic pension accounting choices (OPAC) increases when the plan is underfunded, organized as a cost-sharing plan, governed by a politically embedded fiduciary body, and when the sponsoring government is surrounded by a high degree of unionization, and is divided in terms of partisan control. The results also show that the likelihood of OPAC decreases when a pension plan is subjected to an audit by a Certified Public Accountant (CPA), suggesting that professional gatekeepers can play an important role in limiting the adverse effects of OPAC behavior, including insufficient ARC payments and reduced transparency of governmental financial reports.

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