André Carlos Busanelli de Aquino

Causality in a Performance Measurement Model: A Case Study in a Brazilian Power Distribution Company

This study extends prior balanced scorecard (BSC) research by incorporating the effects of uncertainty, payment schemes and the strength of causal relations proposed in the performance measurement model (PMM) on the budgetary dynamics. Our analysis was restricted to two strategic business units (SBU), engineering projects and electricity distribution service, from a Brazilian electric power concessionaire. We postulate a mediated moderation association between uncertainty (treatment), bonus scheme (mediator), dispersion of payment scheme and the strength of causal relations proposed in the PMM (moderators) on budgetary slack (outcome). Additionally, we postulate that the use of accounting-based measures (ABM) also mediates the effect of uncertainty on budgetary slack. We gathered monthly observations from 102 indicators containing the target and achievement values throughout 2002–2006. Managers were later asked to answer questionnaires about the possible cause–effect relations between these indicators, then 215 causal maps of the department and corporate indicators were drawn up. Econometric analysis provided evidence that the budgetary slack observed is directly impacted by uncertainty, and this impact is moderated by the dispersion of payment scheme. However, we did not find any evidence that supported the mediation process proposed between uncertainty, ABM and budgetary slack. Incomplete implementation of BSC and the level of analysis adopted are possible explanations for that.

A Graph is Worth a Thousand Words: How Overconfidence and Graphical Disclosure of Numerical Information Influence Financial Analysts Accuracy on Decision Making.

Previous researches support that graphs are relevant decision aids to tasks related to the interpretation of numerical information. Moreover, literature shows that different types of graphical information can help or harm the accuracy on decision making of accountants and financial analysts. We conducted a 4×2 mixed-design experiment to examine the effects of numerical information disclosure on financial analysts’ accuracy, and investigated the role of overconfidence in decision making. Results show that compared to text, column graph enhanced accuracy on decision making, followed by line graphs. No difference was found between table and textual disclosure. Overconfidence harmed accuracy, and both genders behaved overconfidently. Additionally, the type of disclosure (text, table, line graph and column graph) did not affect the overconfidence of individuals, providing evidence that overconfidence is a personal trait. This study makes three contributions. First, it provides evidence from a larger sample size (295) of financial analysts instead of a smaller sample size of students that graphs are relevant decision aids to tasks related to the interpretation of numerical information. Second, it uses the text as a baseline comparison to test how different ways of information disclosure (line and column graphs, and tables) can enhance understandability of information. Third, it brings an internal factor to this process: overconfidence, a personal trait that harms the decision-making process of individuals. At the end of this paper several research paths are highlighted to further study the effect of internal factors (personal traits) on financial analysts’ accuracy on decision making regarding numerical information presented in a graphical form. In addition, we offer suggestions concerning some practical implications for professional accountants, auditors, financial analysts and standard setters.

Dinâmica dos ajustes contratuais em concessão de rodovias no estado de São Paulo

The Brazil State reform started in the 90s encouraged contracting out at various levels of the federation, compelling authorities and experts to discuss the need for dynamic regulation of these contracts. Long Term contracts are inherently incomplete, given that trading conditions and supply are subject to unpredictable contingencies. The Sao Paulo Highways concessions case is studied through a compara-tive analysis of notifications and contractual amendments of 12 highway concession contracts in force in 2006. The interpretation of data was checked with interviewing regulatory authority (Artesp). The conclusion is that renegotiations did not change the general terms of the contract, but did to change the schedule of works and some accrued work not stipulated in the original program. Changes in contract terms were guided by preserving the initial financial equilibrium of the contract.

Restos a pagar e a perda da credibilidade orçamentária

O presente artigo discute o uso do carregamento de deficit e creditos orcamentarios via inscricao em Restos a Pagar e seus impactos no endividamento publico, na credibilidade e na accountability do orcamento publico no Brasil. A inscricao em Restos a Pagar tem levado ao crescente endividamento das 3 esferas de governo, escapando aos controles da Lei de Responsabilidade Fiscal. Enquanto em outros paises o carregamento de deficit e creditos orcamentarios, conhecido como carry-over, ao ser bem implementado leva a uma maior flexibilidade ao orcamento, no Brasil as brechas deixadas pela regulacao, como a nao aplicacao plena do resultado primario como balizador do regime de disciplina fiscal, leva ao uso disfuncional da inscricao em Restos a Pagar, criando um “orcamento paralelo” que desafia a credibilidade e a accountability do orcamento.

Brazilian Governmental Accounting Reforms: IPSAS and Accrual Accounting Adoption

Brazilian governmental accounting is affected by two reform processes: the implementation of accrual accounting and convergence with the International Public Sector Accounting Standards (IPSAS). This paper analyses the origins, the process and preliminary outcomes of such reforms. In order to characterize the Brazilian accounting system, we followed the questionnaire from Chan, Jones and Luder (1996) as a protocol, analysed financial reports and reviewed official literature that regulates Brazilian public sector accounting. The paper finds that the accounting reform has two origins: the need to prepare cost accounting information (year 2000) and the requirement to converge towards IPSAS (year 2009). Reform affects both central government and subnational governments, and is being coordinated by the Treasury’s central government. In the process, the Treasury has required the adoption of some sophisticated accounting policies that were beyond the capacity of IT platform installed on either central and local governments, and has had to postpone aspects of their implementation. Treasury has used this as a convenient opportunity to select which IPSAS requirements to implement, taking into account political agendas (e.g. avoiding the recognition of deficit). For these and other reasons, some states’ courts of accounts do not require compliance with some of the standards issued by the Treasury, which impairs the comparability of accounting information prepared by different Brazilian public sector entities.

Folga orçamentária em uma Secretaria da Fazenda: um caso no nível do governo estadual no Brasil

Las organizaciones publicas han ido adoptando sistemas de medicion del desempeno (PMM, por sus siglas en ingles) a partir de los ejemplos de la iniciativa privada, buscando crear incentivos a la eficiencia de los equipos de funcionarios de carrera. Tomando como base los escritos sobre holgura presupuestaria, esta investigacion ha analizado los PMM de un Departamento del Tesoro a nivel del gobierno estatal en Brasil y ha determinado que, teniendo en cuenta el objetivo acordado por el equipo directivo del Tesoro, la organizacion opera en un regimen de holgura presupuestaria en un ambiente organizacional de menor presion en relacion con la consecucion de metas y sus consiguientes recompensas. A traves de series historicas del rendimiento individual mensual de 950 funcionarios en su labor como fiscales, entre enero de 2007 y junio de 2009, se comparo el nivel de consecucion de sus metas tributarias y administrativas. Ademas, se triangularon tales evidencias con las observaciones participativas y el analisis documental. A pesar de la holgura presupuestaria detectada en el uso de objetivos con una elevada probabilidad de exito, el rendimiento en las tareas administrativas se duplico en el ultimo ano analizado, lo cual evidencia que el nivel de esfuerzo individual aumento a pesar del hecho de que el incentivo pecuniario esta garantizado a un nivel de esfuerzo menor.

A diversidade dos Tribunais de Contas regionais na auditoria de governos

Currently, the 33 regional audit courts are responsible to monitor the public nancial management cycle for states and municipalities and to judge the compliance of governors’ acts to the laws regarding procurement and civil servants’ employment from more than 20,000 governmental entities under their jurisdiction. is article aims to analyze the diversity of internal con guration of these regional audit courts and to discuss the potential associations with the nancial auditing quality their teams usually run. We conducted interviews with external auditors and IT directors from 18 courts, followed by triangulation to o cial documents from the audit courts, such as audit manuals and activities reports. e audit quality drivers were identi ed within the governmental auditing literature, supporting the evidences collected by the interviews content analysis. Despite all regional auditing bodies in Brazil were based on the Napoleonic model, the analysis indicates the identi ed con gurations vary according to the team’s organization and size, auditor rotation and use of data reporting systems. e discussion shows that dissimilarities on the courts’ con gurations, as they are responsible to audit a speci c country area, will contribute to a di erent coercion level on scal and accounting issues to state and municipalities, due a combination of characteristics which could mitigate or improve the audit quality. is paper additionally suggests some precautions, based on the organization alignment literature, for the use of proxies to control audit quality e ects in the public nance studies in Brazil.

Financial Resilience in Brazilian Municipalities

Abstract This chapter analyses the financial resilience pattern presented by four Brazilian municipalities at the beginning of a serious revenue downturn, which was initiated at the central government as a combination of economic and political crises. The crisis occurred during an on-going public financial management reform and attempts to imbricate IPSAS-oriented accrual-accounting policies in a dominant cash-based budgeting culture. Thus, contrasting those patterns with other democracies depicted in this book, we aim to contribute to the comparative literature on financial resilience under austerity periods. We interviewed secretaries of finance, department directors and accountants of each city hall and businessmen from the four municipalities. Cases were selected among 100,000-350,000 inhabitants’ municipalities from one of the three most industrialised brazilian states, varying the cases according to their mean and volatility budgetary surplus over the 10 years before the beginning of the analysed crises. All cases presented no anticipatory capacity or long-term strategic planning. Their usual responses are short-term oriented, such as supplier payments postponement, increasing tax collection or cutting expenditures, rather than based on their weak transformative capacities. Despite the fatalistic and very ineffective reactive behaviours observed in two cases, a proactive mayor, supported by consulting firms, enhanced the responses effectiveness of the two remaining cases. Hence, mayor leadership might be a fruitful feature to be investigated by future studies.

Measurement costs and control in outsourcing relationships

Past research suggests that when an organization outsources an activity, its control over the execution of the service is reduced whilst service quality monitoring increases. Little accounting research has been documented on the links between measurement costs and control sharing in contracts entailing the provision of industrial services. We analyse 35 contracts involving 80 non-spot transactions and 749 contract terms at an iron and steel mill in Brazil. The study complements this data with information from 32 interviews. We find that the measurement costs of the contracted services are associated with the complexity of activities and the tightness of control maintenance by the contractor. Where such costs are high, legal contract enforcement and use of extra-contractual coordination mechanisms is low. Additionally, variances between the conceptually expected enforcement mix and that operating in practice is associated with service performance level.

The Whole of Government Accounts in Brazil

This paper presents the origins, actual situation and future perspectives about the whole of public sector accounts (WPSA) in Brazil. We collected evidences from financial reports and regulation, and aiming to capture the implementation process path we interviewed technicians from the National Treasury Secretariat (NTS), other technicians and politicians that have participated in the design of relevant legislation and in the preparation of earlier and current versions of Brazil’s WPSA. The WPSA in Brazil was driven by a fiscal agenda in the year 2000 and preceded reforms towards IPSAS. Consolidation is required by law since 1964 for central and local governments, but the first public sector consolidated report, including assets and liabilities at large, was produced only in 2001. The paper describes the implementation and development process over 14 years of WPSA report. Notwithstanding, until date the Brazilian public sector does not prepare consolidations (properly said), but an aggregation of balances (not performing any consolidation adjustment).