The Value of Public Sector Annual Reports and Annual Reporting Awards in Organisational Legitimacy

Despite considerable diversity in Australian public sector organisations, annual reports have been promoted as an appropriate tool to discharge the accountability of all government agencies. Further, annual reporting competitions have been promoted as a means of ensuring the quality of those annual reports. The limited prior research which addresses these positions ignores the possibility that there may be a variation in the value of both the annual report and the competition depending on the type of public sector organization. This study applies institutional theory, informed by accountability theory, to understand the influence of stakeholders on the annual reporting practices and policies adopted by organisations. It focuses on the Queensland public sector and the Queensland Annual Reporting Award (QARA) and uses a series of case studies to examine the value of the annual report. Consistent with institutional theory, the results indicate that both the annual report and competition entry were used as legitimising tools. Further, cross sectional variation in the perceived value of the annual report and the entry into the annual reporting competition was found.