Local Government Annual Reports: Australian Empirical Evidence on Recipients

In Australia, a common conceptual framework for general purpose financial reporting has been adopted for use by both the private and public sectors. This framework is based on a 'user needs' model and emphasises the provision of information for users who are dependent on general purpose financial reports for the purpose of decision making. Critics of the framework, as it applies to the public sector, claim that it lacks empirical substantiation and ignores the complexity and diversity of public sector institutions. This paper addresses the identity of the users of local government annual reports by examining the distribution lists of authorities within Queensland. The study confirms the existence of the user groups that are defined in the conceptual framework but also finds additional users groups not identified. Further, the study provides evidence that the distribution patterns of local government authorities differ significantly depending on the type of local government (urban or rural) and their size. The results of this research raise important questions for public sector regulators regarding the appropriateness of assuming that there exists a homogeneous set of users for all public sector entity types and provides support for consideration of a differential reporting model within local government.