Research On The Government Accounting Information Effect Under The Perspective Of Local Government’s Behavior

As China’s political system reform and fiscal & taxation system reform stepping into further period, the government accounting reform is entering a rapid advance stage. But for now, government accounting reform is still struggling and some key issues remain unresolved, such as the lack of a sound conceptual framework of government accounting, the lack of a systematic and overall reform layout path, etc. The government accounting is essentially an information tool which attaches to a specific subject and environment. Reform orientation and reform path of government accounting should match with the associated characteristics of the government body and external environmental needs. At present, China’s comprehensive deepening reform has already begun and contradictions from various fields and deep-seated problems have further got worsen. Urbanization, marketization, informatization, globalization, and other mainstream trends have an impact on the existing national governance system strongly and challenge governance capability now. Promoting national governance systems and governance capability modernization have also been listed as one of the overall goal of comprehensive deepening reform. From a global perspective, public governance reform in most countries began from local government. With the deepening of government decentralization, grassroots political democratization and other reform, the position of local government in the entire national governance is increasingly rising. Accelerating the transformation of local government behavior and achieving the government’s "good governance" have great significance to achieve the overall goals of national governance modernization and the success of the whole reform program. "Chaos or order to stratagem is prior to a country", which is proposed by a well-known accountant professor Yang Shizhan. The above-mentioned thesis has incisively interpreted the importance of accounting and auditing in national governance. Government as a symbol of national governance, bearing body and actual behavior, the role of government accounting in national governance is self-evident. Based on the background of promoting the current local governments’behavior transformation and national governance modernization, from the perspective of local government behavior, this article analyzes and tests the forms and conduction paths of government accounting information effect. On the one hand, this research can provide theoretical support which is accord with China’s special environment and practical power to the transition of government accounting abstract function to specific reform proposals; on the other hand, it can advance government accounting to serve the transformation of local government behavior and the achievement of government’s "good governance" better, and promote national governance modernization with government’s central role in national governance as the driving force.In the first part, basic theories and previous researches concerning government accounting and local government behaviors are organized and analyzed to make the contact and key point explicit. In the second part, this paper, in consideration of reality, discovers and analyzes the developing and reforming venation of government accounting information disclosure and local government behaviors, dissects current defects and inducements with the goal of "good governance"; deconstructs the main reforming way of local government behaviors, relocates the government accounting information effect, and settle the abstract path down to specific micro acts. At last, theoretical analysis and empirical test of government accounting information effect are made in three ways respectively on the basis of different behavioral perspectives of local government.On the basis of principal-agent angle of view, local government can make use of two entrusted targets, power and resource, as major path carriers of behavior changing to achieve "good governance". Meanwhile, in order to obtain the goal steady and sustainable of "good governance", we need to consider the uncertain factor risk as well. Based on the three paths power, resources, risk decomposed from the goal "good governance", government accounting information effect in local government should be located correspondingly in regulating the operation of local government power, optimizing the distribution of local government resources and improving local government risk management.Essentially, corruption in officials is the alienation of public power, local official corruption level is the direct reflection of the condition of public power using of local governments, the key to prevent corruption is strengthening the power restriction and preventing the alienation of power. Government accounting information reinforces constraints on power via three ways, strengthening institutional constraint and perfecting nation audit for providing system security for regulating the local government power operation. Improving inter-organization communication and enhancing internal checks and balances for building internal communication and restriction mechanism for local government power operation. Elevating information transparency level and enhancing external supervision for introducing external accountability and constraint for local government power operation. Through empirical test, it is found that financial transparency and official corruption are significantly and negatively correlated, it means that financial transparency exerts the restraint effect on official corruption which demonstrates the effect with empirical results that government accounting information do function in corruption containment and power inducement. Meanwhile, the effect that financial transparency containing local government official corruption still leaves to be desired which motivates government accounting reformation in exposing local government financial activities completely. The research also finds that with greater government size, higher official salary and lower corruption level in local government officials.Public services and public finances are both bearing the demands on the public interest of social public. Government has the responsibility and advantage in providing public services, as a consequence, it should be main entity in serving publics, shortage of public services is rightly a result of government finance responsibility absence. In transforming qualitative local government responsibility in providing public service to quantitative financial expenditure regulation, government accounting can guide interests of game in local government public serving behaviors, improving rights and obligation allocation to strengthen financial accountability to local government and adjust the allocation. Through empirical test, it is found that financial transparency of local government have a pessimism effect which is further strengthened in GDP-oriented official promotion incentive model. Researches show that if the government accounting system and mechanism of financial information exposure have not be well established, increasing in financial transparency level may not exert an accountability effect on local government’s public serving behaviors, which in return, motivates accrual basis government accounting reformation in properly exposing local government public serving debts.The risk of local government liability is the major threat to the stability of the government, and it is urgent to strengthen management and control of local government liability. Local government liability is an important accounting object of government accounting, a basic goal of government accounting is to help the management and control of local government liability, governmental accounting assists the management and control of local government liability by optimizing information quality and method of information enclosure to provide technical support, improving liability assessment and risk alert through providing information basis, playing accountability constraints and credit leading effect, et al. Through empirical test, it is found that there is a strong negative relationship between financial transparency and local government liability, which indicates that the enhancement of financial transparency has reduced the behavior of local government liability, and provides evidence for liability and risk management of governmental accounting. Meanwhile, the effect of financial transparency on local government liability still need to be strengthened, which motivates the reformation of governmental accounting to show local government liability and power-responsibility clearly and scientifically. The research also finds that competition of local governments can lead to major financial expansion, which can mean rise in financial expense and financial shortage. This is a major motivation of local government liability, and the effect of separation of financial and political power on local government liability is uncertain.It indicates that the function orientation and the reform paths of government accounting should fit the realistic background of the change of China’s local government behavior, make the government accounting reform settle to the personalized needs in special environment of China. For now, on power operation, the positive effects in guarding against official corruption of our country’s fiscal transparency is emerging and improving gradually, we should accelerate the reform of government accounting, strengthening the public power restriction effect of information by full disclosure of administrative costs and administrative performance information. On resource allocation, fiscal transparency focusing on budgetary revenues and expenditures in our country has not yet have the positive effect of leading local government’s public service providing, we should actively promote the accrual basis government accounting reform, disclosure the expected and implicit social responsibility in public service of local government in the form of scientific and quantitative liabilities index, providing information basis and technical support for information disclosure playing due accountability constraint effect to public service behavior. On risk control, fiscal transparency at the present stage play positive effect on liability control, but there is still a large rising space, we should strengthen the assessment and control of implicit liabilities and contingent liabilities through the government liability information disclosure in accrual basis, reveal the future and concealing liability risk, further enhancing the liability risk control effect of information disclosure. Institutional environment is one of the important factors affecting the behavior of local governments, as well as provides external soil for the release and conduction of government accounting information effect, we should improve the affair power and finance power configuration between central government and local government, continue to promote the reform of the fiscal and taxation systems. Reforming local government performance rating and assessment of official incentive mechanism, making public service, government liability and other indicators in evaluating system. Promoting the process of marketization, perfecting government exit mechanism, making market play a decisive role. Through the constraint of formal system and guidance of informal system, promoting the transformation of local government behavior in order to realize "good governance".