Accounting restatements, governance and municipal debt financing
AbstractWe find that mean municipal debt costs are greater following financial restatement disclosures. Comparisons of the relative use of municipal debt, and of the use of unsecured versus secured debt, corroborate that financial restatements increase the cost of municipal debt financing. Additional analyses indicate that adverse consequences of restatements are mitigated by strong audit oversight and by provisions that encourage direct voter participation in the governance process. The evidence supports the use of restatements as a summary measure of financial reporting quality in the municipal context and informs thinking about auditor and voter oversight in the municipal financial reporting process.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Accounting and Economics.
Volume (Year): 56 (2013)
Issue (Month): 2 ()
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Web page: http://www.elsevier.com/locate/jae
Accounting restatements; Municipal governance; Municipal debt;
Find related papers by JEL classification:
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
- H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
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