Marco Bisogno

Public-Sector Consolidated Financial Statements: An Analysis of the Comment Letters on IPSASB’s Exposure Draft No. 49

Public sector consolidated financial statements can be drafted according to different approaches, especially the “control approach” or “budgetary perspective.” Considering the growing importance of the International Public Sector Accounting Standards (IPSAS) in the international scenario, the aim of the article is to investigate these approaches through an analysis of the comment letters submitted to the Exposure Draft no. 49, which will replace the current IPSAS 6. The main finding concerns the acceptance of the key role played by the control approach, even though it needs to be better specified, in order to take into account the public sector characteristics.

The Financial Distress of Public Sector Entities: Evidence from Italian Public Universities

The paper investigates the financial condition of Italian universities, focusing on cash- and budget-level solvency as well as service-level solvency. Our model includes structural factors (which refer to both size and quality in structures), organisational factors (which refer to the performance evaluation of the strategic mission of universities, such as research and teaching activities as well as the so-called third mission) and hybrid factors (which essentially refer to the financial relationship between the central government and each university). Basing the analysis on these factors, we propose a model for evaluating the financial viability of Italian universities, characterised by high flexibility and feasibility. We found that neither structural nor organisational factors seem to affect financial distress, with only the hybrid factors being significant. These results are probably due to the troubled financial difficulties that are affecting several countries in current years; this means that central government is forced to pay attention only to the financial factors. Furthermore, our findings suggest that performance-funding policies can be ineffective if there is not a clear understanding of the mechanisms through which accountability operates.

Forecasting corporate bankruptcy: empirical evidence on Italian data

Purpose – The aim of the paper is to investigate several aspects of bankruptcy prediction within both theoretical and empirical frameworks. In particular, it has focused on the comparison of different techniques used to forecast failure through a balanced sample of companies within a geographical area (the Campania region) located in the south of Italy.Methodology – Business failure has been one of the most investigated topics within corporate finance and the empirical approach to bankruptcy prediction has recently gained further attention from financial institutions. The aim of corporate failure prediction is to have a methodological approach which discriminates firms with a high probability of future failure from those which are considered to be healthy. Starting from the seminal paper of Altman (1968), many other significant contributions have been subsequently made to this field (Ravi Kumar and Ravi, 2007). This papers approach is to compare different statistical techniques based on the analysis of f...

Intellectual capital in action: evidence from Italian local governments

Purpose Intellectual capital (IC) is attracting increasing attention from scholars and practitioners in the private sector, while research in the public sector is still in its embryonic stage, especially in regards to local governments. The purpose of this paper is to fill this gap by channelling conceptual and empirical findings from the large body of IC literature. Design/methodology/approach The research investigates IC in action in the local government domain. A survey has been carried out involving both managers and politicians of all Italian local governments (ILGs) with more than 40,000 inhabitants. In order to define the constituents of each IC dimension perceived by ILGs, principal component analysis was used in investigating the results. Findings Results highlights how IC components are perceived in ILGs: human capital is a combination of aptitudes in pursuing target performances, sense of ownership and motivations; relational capital is a combination of values, relationships and acts; structural capital includes procedures and routines supporting the decision-making process, the ability of achieving objectives and handling changes. Research limitations/implications While the research findings are limited due to being based on a survey in a single country, they present opportunities for future research regarding further testing of how IC is perceived in LGs in different context. The conclusion could be beneficial also for standard setters, providing a path to support the IC disclosure by LGs. Originality/value The paper contributes to a narrow strand of research – IC in LGs – adding new knowledge in “IC in action” research stream.

Identifying future directions for IC research in education: a literature review

It is important to have a literature review to open any special issue as a way of introducing the state-of-the-art topics and link past research with the papers appearing in this special issue on IC in education. The paper aims to discuss this issue.,This research uses the structured literature to investigate the state-of-the-art and future directions of IC literature in education. In total, 47 articles are explored including nine from this special issue.,IC in education research is concentrated in Europe and mainly addresses IC in universities. Additionally, current IC research is progressing by examining IC practices inside universities using a third-stage IC approach, with new research also concentrating on third-mission outcomes, thus there is scope to continue IC and education research beyond universities. IC in education can also expand into fifth stage IC research, which abandons the boundaries of the educational institution and concentrate on the impact of IC and education on multiple stakeholders.,Current IC in education research is too narrow and mainly investigates IC in European contexts using case study methodology. However, there is ample scope to widen research that develops new frameworks in different educational and country contexts using a wider range of research methodologies. IC in education needs to expand its boundaries so it does not lose its relevance, and thus be able to contribute to wider policy debates.,This paper presents the current state-of-the-art structured literature review of the articles investigating IC in education.

The Accessibility of the Italian Bankruptcy Procedures: An Empirical Analysis

The importance of efficient bankruptcy procedures is widely recognized and the acute recent economic crisis has emphasized the noteworthiness of this topic, which international literature has analyzed in several ways, focusing the attention on different variables, such as accessibility of bankruptcy procedures, their costs and duration, incentives and/or penalties for debtor and creditors related to the onset of a procedure, and so on. The aim of the paper is the analysis of the Italian bankruptcy procedures both in an ex post and in ex ante perspective. The ex post perspective is based on official statistical data annually published by the ISTAT (the Italian Office of Statistics), investigating costs and duration of bankruptcy procedures as well as average ratio of claims reimbursed to the creditors. The period investigated is 2000–2007. The ex ante perspective is based on two non-paired samples of failed and non-failed firms, investigating their financial statements of 2003–2008. More specifically, non-failed firms are firms for which a bankruptcy petition was submitted but the court did not order relief, rejecting the petition. The main expected result is that the Italian bankruptcy procedures are complex and not accessible enough.

Public sector consolidated financial statements: a structured literature review

Purpose The purpose of this paper is to review and analyze the literature on consolidated financial statements (CFS) in the public sector published from 1980 to 2015 in public sector accounting and management journals, and propose a future research agenda. Design/methodology/approach Adopting a structured literature review methodology, the authors investigate how the CFS literature is developing and what its focus is. Findings The authors identify five major topics: the definition of the consolidation area; the identification of the reporting entity; the private vs public sector accounting standard dichotomy; the relationship with the statistical rules; and the usefulness of CFS. Originality/value The authors analyze these topics, highlighting the growing implementation of CFS in different contexts (mainly focusing on governments outside the USA) and provide suggestions for future research.

A service-oriented approach to modeling and performance analysis of Port Community Systems

A Port Community System (PCS) is an electronic platform that links the multiple systems operated by private and public organizations. Accordingly, PCSs can be interpreted as complex service system networks that coproduce services. The study proposes a three levels top-down methodology which aims to interpret existing PCS in order to: provide a formal description of this system network based on the enterprise architecture concepts of a PCS; illustrate how each actor of a PCS offers or requires services; and present a new approach to the measurement of services based on the Goal-Question-Metric paradigm.

EFFICIENCY AS A DETERMINANT OF FINANCIAL CONDITION: AN ASSESSMENT OF ITALIAN AND SPANISH LOCAL GOVERNMENTS

ABSTRACT: Efficiency is considered a strategic tool in local governments (LGs) and several studies have investigated this delicate issue. However, the previous literature has rarely examined if a relationship between efficiency and financial condition does exist. Accordingly, based on a large sample of Italian and Spanish LGs with more than 50,000 inhabitants, the authors aim to investigate the potential impact of the efficiency of LGs on their financial health. Empirical findings, which are obtained from a model based on a stochastic parametric approach to measure efficiency, suggest the existence of such impact, even if it is conditioned by the type of expenditure, the political ideology of the government, and by the national and macroeconomic environments.

Financial Sustainability in Local Governments: Definition, Measurement and Determinants

Nowadays, when many governments are currently suffering strong financial difficulties, conduct of the public sector has become relevant. Increasing public debt and deficit has asphyxiated many governments, particularly at local level, which have suffered a reduction of revenues and expenditure, along with limitations on deficit and the use of debt. In this scenario, financial sustainability of local governments became very relevant. This contribution is a debate on the definition and measurement of such concept; in addition, it has also presented factors that could affect financial sustainability, highlighting possible future lines of research.