Editorial: More complex approaches may increase the use of accounting information

As discussed in my 2022 editorial (Bergmann, 2022), there is a sizeable discussion about the use of accounting information, in particular by politicians, triggered by a Public Money & Management theme guest edited by Budding and van Helden (2022) and numerous contributions by renowned scholars (Christensen, 2022; Cohen, 2022; Kroll, 2022; Polzer & Seiwald, 2022; Weiss, 2022). However, Karatzimas (2021), in this issue of Public Money & Management, raises two additional important issues: citizen engagement and accounting literacy. In particular at the local level, citizens are often more or less directly involved in democratic decision-making. Similar to politicians, they are unlikely to read and respond to financial information when financial statements are first published. However, this does not mean that the information presented in financial statements is useless. In an increasingly digital world, citizens may involve themselves once they feel it is necessary and in a way they find convenient. But, as Karatzimas argues, they still need the necessary accounting literacy to understand the information. Accounting literacy should be a result of lifelong learning, which would additionally support the engagement of citizens in smart cities. Thanh Dung Tran and Dollery (2021) similarly find that financial indicators significantly affect resident satisfaction at the local government level. However, as in the case of politicians and citizen engagement, the mechanisms seem to be more sophisticated. It would be unreasonable to expect that the mere reporting of financial indicators leads to greater satisfaction. They identify different factors which are relevant, including urban versus rural, with rural residents being more interested in such traditional financial indicators as liquidity and indebtedness. Researching indebtedness of local governments, Bo et al. (2022) show that completeness of financial information, including implicit local government debt, is necessary to successfully address the issue. This speaks in favour of efforts to implement standard-based full accrual accounting and make financial statements comprehensive and complete—to make them more useful. All these articles speak in favour of comprehensive accounting reforms, making financial statements complete, developing financial indicators, educating politicians and citizens and, finally, using this information for accountability and decision-making purposes. Simplistic, isolated reforms are less likely to be successful. For both researchers and practitioners this is not so good news, because their work is necessarily getting more complex. On the other hand, the articles in this issue also show that more isolated reforms are not lost as such but can be complemented by additional elements at a later stage. Indeed, a lifelong learning approach, as proposed by Karatzimas, which goes beyond learning in formal contexts, seems to be an appropriate answer to complexity—both for politicians and citizens.