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Do Colleges and Universities 'Manage' Their Financial Reporting?

17 Pages Posted: 4 May 2013 Last revised: 9 May 2013

Robert E. Martin

Centre College

Date Written: April 2, 2013

Abstract

Prior to 2008 public universities, private universities, and liberal arts colleges made small changes in the proportion of total cost accounted for by instruction, research, and public service. After 2008 these institutions reported dramatic increases in the share of total cost accounted for by instruction, research, and public service. These shifts may be legitimate examples of resource reallocation or they may be examples of widespread reclassification of expenses. The latter case suggests financial reports are “managed” in higher education, as they frequently are among corporations. I explore the relationship between these shifts and changes in staffing.

Keywords: financial reporting, activity ratio

JEL Classification: I23, I28

Suggested Citation

Martin, Robert E., Do Colleges and Universities 'Manage' Their Financial Reporting? (April 2, 2013). Available at SSRN: https://ssrn.com/abstract=2259739 or http://dx.doi.org/10.2139/ssrn.2259739

Robert E. Martin (Contact Author)

Centre College ( email )

600 West Walnut Street
Danville, KY 40422
United States

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