Purpose: The purpose of this paper is to investigate the financial determinants of local government debt in New Zealand.Design/methodology/approach: To investigate the financial determinants of local government debt in New Zealand, the authors analyse the relationship between key financial variables with local government debt in New Zealand based on the theories of fiscal accountability and moral hazard using a panel data methodology, specifically the pooled ordinary least squares regression model.Findings: The findings suggest that council income is the major financial determinant of local government borrowing in New Zealand rather than infrastructural spending and that during the global financial crises (GFC) borrowing levels of New Zealand local councils was not significantly impacted. However, the findings indicate that post the GFC, low interest rates have stimulated increased borrowing activity by New Zealand local governments to fund infrastructure.Originality/value: This paper is the first to examine the determinants of local government debt in New Zealand. The findings of this study contribute to better understanding of local government/municipality debt in New Zealand and internationally by providing evidence on the financial determinants of debt of local governments and the indirect use of government policy to control local government borrowing. The findings of this study are anticipated to affect local government practices and national government policies in relation to local government finances.

This study investigates the relationship between competition and the risk-taking attitude of banks. We test how this relationship manifests in the Sub-Saharan African(SSA) region’s commercial banks in light of the competition-fragility view, using the generalized methods of moments. We studied 440 commercial banks in 37 SSA countries over the period 2006–2015. The results provide evidence that supports a positive relationship between competition and banks’ overall risk as well as their credit risk but suggests that off-balance sheet risk reduces with competition. We, therefore, conclude that the propensity to undertake higher risk in a competitive banking environment largely accounts for fragility as argued in the competition-fragility view.

The authors examine whether the publicly-available accounting information about infrastructural assets and other information in New Zealand local government’s financial statements is helpful for the assessment of investment in infrastructural assets. Their analysis indicates that information on annual net investments for infrastructural assets is useful for understanding the level and type of infrastructural assets investments and how these assets are funded. Further, such investment focuses more on visible infrastructural assets than invisible infrastructural assets. This study contributes to the literature on the reporting and management of public infrastructure assets. Local government in many countries is responsible for investing and maintaining infrastructural assets and is often accused of under-investing in these assets. Information published in local government financial statements can assist in assessing the level of funding sources for infrastructural assets and the choices that local government makes in relation to which types of assets are funded. This paper’s finding that local government allocates more funding to visible, rather than invisible, infrastructural assets has important policy implications for the sustainability of invisible infrastructural assets and will be of interest to both local and central governments.

This paper examines the impact of changes in reporting frameworks on New Zealand public sector audit costs in terms of both audit fees and effort. Audit costs increased with the adoption of both International Financial Reporting Standards (IFRS) and International Public Sector Accounting Standards (IPSAS) reporting frameworks. The costs of auditing across various financial reporting frameworks in the public sector is shown to be significantly influenced by auditors’ specialization. Many countries are changing their public sector reporting from a cash basis to IPSAS and these changes can have significant cost implications in terms of audit fees and audit effort. This paper will be of interest to accounting standard-setters, regulators and policy-makers in countries that are transitioning to IPSAS reporting or considering IPSAS. The authors suggest planning for an increase in audit fees when assessing the costs and benefits of adopting new reporting frameworks.