Abstract

http://ssrn.com/abstract=1471056
 
 

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Accounting Restatements, Governance and Municipal Debt Financing


William R. Baber


Georgetown University - Department of Accounting and Business Law

Angela K. Gore


George Washington University - School of Business

Kevin T. Rich


Marquette University - Department of Accounting

Jean X. Zhang


Virginia Commonwealth University

August 12, 2013

Journal of Accounting & Economics (JAE), 56(2-3) 212-227, 2013.

Abstract:     
We 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.

Number of Pages in PDF File: 45

Keywords: municipal bonds, governance, restatements, financial reporting quality, debt costs, local government

JEL Classification: G34, M43, M41

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Date posted: September 11, 2009 ; Last revised: January 31, 2014

Suggested Citation

Baber, William R. and Gore, Angela K. and Rich, Kevin T. and Zhang, Jean X., Accounting Restatements, Governance and Municipal Debt Financing (August 12, 2013). Journal of Accounting & Economics (JAE), 56(2-3) 212-227, 2013.. Available at SSRN: http://ssrn.com/abstract=1471056 or http://dx.doi.org/10.2139/ssrn.1471056

Contact Information

William R. Baber
Georgetown University - Department of Accounting and Business Law ( email )
McDonough School of Business
Washington, DC 20057
United States

Angela K. Gore (Contact Author)
George Washington University - School of Business ( email )
2201 G St NW
Washington, DC 20052
United States
(202) 994-6195 (Phone)
Kevin T. Rich
Marquette University - Department of Accounting ( email )
College of Business Administration
PO Box 1881
Milwaukee, WI 53092
United States
Jean X. Zhang
Virginia Commonwealth University ( email )
301 West Main Street
P.O. Box 844000
Richmond, VA 23284
United States
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