The Tiebout Hypothesis: Implications for Municipal Financial Reporting

Journal of Accounting Auditing and Finance, Fall 1979, 3(1): 31-41

Posted: 12 Jul 2014

See all articles by K. K. Raman

K. K. Raman

The University of Texas at San Antonio

Date Written: 1979

Abstract

The current measurement focus in municipal financial report­ing is "revenue minus expenditure" or the inflow and outflow of liquid financial resources on a modified accrual basis. One of the issues raised, in the FASB Discussion Memorandum on a concep­tual framework for reporting by nonbusiness organizations, is whether users need an "operating statement." An "operating statement" implies a shift in measurement focus to "revenue minus expense" on a full accrual basis complete with a "bottom line." This article utilizes economic theory (the Tiebout hypoth­esis) to build a case as to how and why an operating statement could provide potentially useful information to one user group. local taxpayer-voters (constituents).

Keywords: Municipal financial reporting, Tiebout hypothesis

JEL Classification: A12, M41

Suggested Citation

Raman, K. K., The Tiebout Hypothesis: Implications for Municipal Financial Reporting (1979). Journal of Accounting Auditing and Finance, Fall 1979, 3(1): 31-41. Available at SSRN: https://ssrn.com/abstract=2464157

K. K. Raman (Contact Author)

The University of Texas at San Antonio ( email )

One UTSA Circle
San Antonio, TX 78249
United States
210-458-8749 (Phone)

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