ISSN: 2222-6990
Open access
Purpose: This study examines how local governments’ political interests influence the implementation effectiveness of government accounting standards in China, focusing on three dimensions: promotion incentives, fiscal autonomy, and risk avoidance. Design/methodology/approach: Adopting a conceptual research design, this study conducts a systematic literature review and develops a theoretical framework under the lens of public choice theory to explain the mechanisms through which political interests shape implementation outcomes. Findings: Different types of political interests exhibit heterogeneous influence pathways under specific institutional contexts. Promotion incentives tend to drive opportunistic accounting behaviors that weaken transparency, while fiscal autonomy and risk-avoidance motives can generate both compliance-enhancing and selective-implementation effects. Research limitations/implications: As a conceptual study, this research relies primarily on literature synthesis without empirical testing. Future studies could employ survey data, archival evidence, and cross-regional comparisons to validate the proposed framework and assess the relative strength of different political motives. Practical implications: A clearer understanding of political incentives can help policymakers design more effective accountability systems that align incentives with governance objectives and reduce distortions in governmental accounting practices. Originality/value: By shifting the focus from external institutional constraints to endogenous political drivers, this study develops a novel explanatory framework that enriches the theoretical understanding of accounting standards implementation in China and offers insights for international comparative research.
Aldag, A., Kim, Y., & Warner, M. (2019). Austerity urbanism or pragmatic municipalism? Local government responses to fiscal stress in New York State. Environment and Planning A: Economy and Space, 51(5), 1287–1305. https://doi.org/10.1177/0308518X19844794
Alfarisi, R., N., & Djalil, M. (2022). The effect of implementation of government accounting standard, government internal control system and accounting information system on good governance requirement with the quality of financial statement as moderation of government working unit (SKPA) in the Government of Aceh, Indonesia. International Journal of Business Management and Economic Review, 5(1). https://doi.org/10.35409/ijbmer.2021.3341
Allen, A., & Petacchi, R. (2022). Preparer opposition and strategic implementation of governmental accounting standards: Evidence from public pension accounting reform. Management Science, 69(7), 4259–4282. https://doi.org/10.1287/mnsc.2022.4515
Anantharaman, D., & Chuk, E. (2020). The impact of governmental accounting standards on public-sector pension funding. Review of Accounting Studies, 25(3), 1–49. https://doi.org/10.2139/ssrn.3438074
Atiningsih, S. (2020). The implementation of government accounting standards, internal control systems and information technology utilization on the quality of local government financial statements with organizational commitments as moderation variables. Advances in Computers, 4(2), 216–229. https://doi.org/10.35310/accruals.v4i02.584
Bai, X. (2024). Research on the evaluation of local government debt risks and governance strategies from the perspective of taxation reforms. International Journal of Frontiers in Sociology. https://doi.org/10.25236/ijfs.2024.061211
Balaguer?Coll, M., & Brun-Martos, M. (2019). The effects of the political environment on transparency: Evidence from Spanish local governments. Policy Studies, 42(2), 152–172. https://doi.org/10.1080/01442872.2019.1599838
Bischof, J., Daske, H., & Sextroh, C. (2020). Why do politicians intervene in accounting regulation? The role of ideology and special interests. Journal of Accounting Research, 58(3), 589–642. https://doi.org/10.1111/1475-679X.12300
Budiarto. (2018). Faktor-faktor yang mempengaruhi keberhasilan penerapan akuntansi berbasis akrual pada pemerintah kabupaten Lombok Barat. SOLID, 8(2). https://doi.org/10.35200/solid.v8i2.216
Cohen, S., Bisogno, M., & Malkogianni, I. (2019). Earnings management in local governments: The role of political factors. Journal of Applied Accounting Research, 20(3), 345–364. https://doi.org/10.1108/jaar-10-2018-0162
Darmawati, D., Mediawati, E., & Rasyid, S. (2024). New trends and directions in local government finance research: A bibliometric analysis. Public and Municipal Finance, 13(1), 137–149. https://doi.org/10.21511/pmf.13(1).2024.11
Del Vecchio, S. C., Johnson, G. G., & Magner, N. R. (2007). GASB 34 implementation: Perspectives of government accounting and finance officials. Academy of Accounting and Financial Studies Journal, 11(1), 1–15.
Deng, S., & Liu, L. (2019). Research on the impact of fiscal transparency on local government debt risks: Based on the perspective of intergovernmental relations. Journal of Finance and Economics, 45(12), 4–17. https://doi.org/10.16538/j.cnki.jfe.2019.12.001
Dorn, F., Gäbler, S., & Rösel, F. (2019). Ineffective fiscal rules? The effect of public sector accounting standards on budgets, efficiency, and accountability. Public Choice, 186(3–4), 387–412. https://doi.org/10.1007/s11127-019-00755-8
Fauzi, F., Minarni, E., & Hartono, H. (2025). Implementation of government accounting standards in improving the quality of public financial reports. The Journal of Academic Science, 2(1). https://doi.org/10.59613/j3jqvt63
Giacomini, D. (2020). Use of accounting information by mayors in local governments. International Journal of Public Administration, 43(4), 341–349. https://doi.org/10.1080/01900692.2019.1636392
Grembi, V., Nannicini, T., & Troiano, U. (2016). Do fiscal rules matter? American Economic Journal: Applied Economics, 8(3), 1–30. https://doi.org/10.1257/app.20150076
Harahap, A. J. S., & Erlina, E. (2024). Factors improving the quality of local government financial reporting performance: A mini review approach. West Science Business and Management, 2(3), 1038–1044. https://doi.org/10.58812/wsbm.v2i03.1292
Horni, P., Yerly, N., & Trinkler, G. (2018). Co-creating value between PFM institutions: An integrated approach towards financial sustainability. [Conference Paper].
Huo, X., Bi, S., & Yin, Y. (2023). The impact of fiscal decentralization and intergovernmental competition on the local government debt risk: Evidence from China. Frontiers in Environmental Science, 11, 1103822. https://doi.org/10.3389/fenvs.2023.1103822
Ingram, R., & DeJong, D. (1987). The effect of regulation on local government disclosure practices. Journal of Accounting and Public Policy, 6(4), 245–270. https://doi.org/10.1016/S0278-4254(87)80002-9
Jiao, C., & Xu, C. (2020). Local fiscal autonomy in China: Historical evolution and hierarchical differences, 1990–2014. Rural China, 17(2), 319–348. https://doi.org/10.1163/22136746-01702005
Landry, P., Lü, X., & Duan, H. (2018). Does performance matter? Evaluating political selection along the Chinese administrative ladder. Comparative Political Studies, 51(8), 1074–1105. https://doi.org/10.1177/0010414017730078
Li, A., & Li, P. (2024). Fiscal transparency and its effects on local government financial management: Evidence from China. Journal of Finance and Economics.
Liberato, M., De Sousa Paiva, I., & Serrasqueiro, R. (2023). Constraints and stimuli in the implementation of public accounting reform: Systematic literature review and future research agenda. Journal of Accounting & Organizational Change, 19(5), 643–668. https://doi.org/10.1108/jaoc-01-2022-0018
Liu, A., Oi, J., & Zhang, Y. (2021). China’s local government debt: The grand bargain. The China Journal, 87, 40–71. https://doi.org/10.1086/717256
Lubis, D. M., Rusydi, M. K., & Prastiwi, A. (2023). The role of the government’s internal control system and human resource competence on the quality of financial reports with leadership commitment as moderation. Journal of World Science, 2(7), 1062–1070. https://doi.org/10.58344/jws.v2i7.335
Mauri, N. (2024). How fiscally autonomous are local governments? An empirical test. Journal of Public Economics, 225, 105210. https://doi.org/10.1016/j.jpubeco.2024.105210
Michener, G., & Nichter, S. (2021). Local compliance with national transparency legislation. Government Information Quarterly, 39(2), 101659. https://doi.org/10.1016/j.giq.2021.101659
Monkam, N., & Saba, C. (2025). Fiscal autonomy and the path to sustainable local economic development: A multilevel municipal analysis in South Africa. Sustainable Development. https://doi.org/10.1002/sd.3514
Ouyang, A. Y., & Li, R. (2021). Fiscal decentralization and the default risk of Chinese local government debts. Contemporary Economic Policy, 39(3), 641–667. https://doi.org/10.1111/coep.12531
Pilcher, R. (2011). Implementing IFRS in local government: Institutional isomorphism as NPM goes mad? Local Government Studies, 37(3), 367–389. https://doi.org/10.1080/03003930.2011.588702
Polzer, T., Grossi, G., & Reichard, C. (2021). Implementation of the international public sector accounting standards in Europe: Variations on a global theme. Accounting Forum, 46(1), 57–82. https://doi.org/10.1080/01559982.2021.1920277
Puspasari, L., & Kuntadi, C. (2023). The effect of the implementation of government accounting standards, human resource competencies, and integrated agency-level financial application systems as determinants of the quality of government financial statements. Journal of Accounting and Finance Management, 4(1), 1–13. https://doi.org/10.38035/jafm.v4i1.185
Putri, N. (2024). Analisis implementasi akuntansi sektor publik dalam meningkatkan transparansi dan akuntabilitas keuangan pemerintah daerah Lampung. Anggaran, 1(2), 1–4. https://doi.org/10.61132/anggaran.v1i2.680
Qu, J., & Zhu, Y. (2019). Government governance, fiscal transparency, and government accounting information sharing: Realization mechanism and path. In Proceedings of the 2019 3rd International Seminar on Education, Management and Social Sciences (ISEMSS 2019) (pp. 806–812). https://doi.org/10.2991/aebmr.k.191217.143
Resce, G. (2022). The impact of political and non-political officials on the financial management of local governments. Journal of Policy Modeling, 44(6), 1261–1278. https://doi.org/10.1016/j.jpolmod.2022.08.004
Ríos, A., Guillamón, M., Benito, B., & Bastida, F. (2018). The influence of transparency on budget forecast deviations in municipal governments. Journal of Forecasting, 37(5), 457–474. https://doi.org/10.1002/for.2513
Sonjaya, Y., Prasetianingrum, S., Auliyah, I., & Labo, I. (2025). Implementation of public sector accounting systems and standards in improving financial transparency. Advances in Applied Accounting Research, 3(1), 45–57. https://doi.org/10.60079/aaar.v3i1.420
Sutaryo, S., Sahari, S., Jakpar, S., & Balia, S. (2022). Internal audit function, political characteristics, and compliance with government accrual-based accounting standards in Indonesian local government. Contaduría y Administración, 68(1), e3357. https://doi.org/10.22201/fca.24488410e.2023.3357
Tan, E., & Avshalom-Uster, A. (2021). How does asymmetric decentralization affect local fiscal performance? Regional Studies, 55(6), 1071–1083. https://doi.org/10.1080/00343404.2020.1861241
Thoa, D., & Van Nhi, V. (2021). Improving the quality of financial accounting information through strengthening of the financial autonomy at public organizations. Journal of Asian Business and Economic Studies, 28(4), 335–349. https://doi.org/10.1108/jabes-06-2020-0059
Yamen, A., & Can, G. (2023). The impact of public governance perception on the quality of financial reporting. Economic Research-Ekonomska Istraživanja, 36(1), 2223264. https://doi.org/10.1080/1331677X.2023.2223264
Yudiyanto, Y., & Ningsih, S. (2023). The role of risk management implementation in increasing accountability: A study of all regency/municipality governments. Jurnal Borneo Administrator, 19(2), 131–144.
Zamir, E., & Sulitzeanu-Kenan, R. (2018). Explaining self-interested behavior of public-spirited policymakers. Public Administration Review, 78(4), 579–592. https://doi.org/10.1111/puar.12825
Zhang, C., & Ping, X. (2019). Research on the evolution of Chinese local government special bond management system in the perspective of opportunistic behavior. In Proceedings of the 2019 3rd International Seminar on Education, Management and Social Sciences (ISEMSS 2019) (pp. 85–92). https://doi.org/10.2991/isemss-19.2019.85
Zhang, Q., Zheng, Y., & Zhou, C. (2023). Disclosing for promotion or perquisites: Local government financial disclosure strategy. Emerging Markets Finance and Trade, 59(10), 2637–2663. https://doi.org/10.1080/1540496X.2023.2186747
Zhou, C. (2021). Game theory-based analysis of local governments’ behavioral dissimulation in the third-party soil pollution control under Chinese-style fiscal decentralization. Land, 10(4), 389. https://doi.org/10.3390/land10040389
Mao, S., Bosi, M. K., & Lajuni, N. (2026). The Impact of Local Governments’ Political Interests on the Implementation Effectiveness of Government Accounting Standards in China: A Conceptual Study. International Journal of Academic Research in Business and Social Sciences, 16(4), 565–580.
Copyright: © 2026 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode