Will "austerity" be a critical juncture in European public sector financial reporting?

David Albert Heald, Ron Hodges

Research output: Contribution to journalArticlepeer-review

40 Citations (Scopus)


Purpose: This paper analyses how austerity has impacted to date upon European Union financial reporting developments and how this might influence future reforms. It considers how a critical juncture in EU financial reporting might be recognized and factors which might prevent or delay such a juncture being realized.
Design/Methodology/Approach: The paper uses the theoretical conceptualization of the territorializing, mediating, adjudicating and subjectivizing roles of accounting (Miller and Power, 2013), linked to document analysis and interviews with members of the relevant policy communities. In technical terms, austerity makes accounting subject to greater demands for consistency and uniformity. In political terms, accounting is implicated in increasing external fiscal surveillance of sovereign states.
Findings: We have shown how the Miller-Power framework illuminates these developments. The territorializing role of accounting in sovereign states creates an environment which facilitates the mediating, adjudicating and subjectivizing roles. Austerity promotes re-territorializing, yet also creates incentives for governments to hide risks and guarantees: the comparability of financial reports and national accounts may be achieved only at a rhetorical level. Evidence for a critical juncture would be termination of national traditions of financial reporting, greater harmonization of accounting across tiers of government, weakening of the linkages to private sector accounting, and stronger alignment of government financial reporting with statistical accounting.
Originality: The paper provides a theoretically-based analysis of how austerity influences government financial reporting and statistical accounting and brings them into closer contact. This analysis is located within broader tensions between technocracy and democracy that are institutionalized in EU fiscal surveillance.
Original languageEnglish
Pages (from-to)993-1015
Number of pages23
JournalAccounting, Auditing & Accountability Journal
Issue number6
Publication statusPublished - 2015


  • austerity
  • public sector financial reporting
  • critical juncture
  • fiscal transparency
  • statistical accounting


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