The Association between Accounting Performance and Constituent Response in Political Markets

32 Pages Posted: 24 Jul 2014

See all articles by Michael E. Bradbury

Michael E. Bradbury

Massey University

Tom Scott

Auckland University of Technology

Date Written: July 22, 2014

Abstract

Since 2006, New Zealand local authorities (councils) have been required to disclose long-term accounting data relating to forecast operating revenue and expenses. The production and disclosure of council planning data is based on the perceived accountability of the council to its constituents. This paper examines whether characteristics of the 2007 and 2010 New Zealand council elections are associated with accounting performance, measured as the unexpected difference in operating expenditure. We find that that accounting performance and the sign of accounting performance (i.e., expenditure over-runs) are associated with greater councillor re-election. Furthermore, accounting performance is also associated with greater voter turnout. Thus we find that accounting, in an electoral context, has both information content and conveys good/bad news to voters.

Keywords: Local government elections, accountability, accrual accounting, planning, political markets

JEL Classification: M40, M41, O56

Suggested Citation

Bradbury, Michael E. and Scott, Tom, The Association between Accounting Performance and Constituent Response in Political Markets (July 22, 2014). Available at SSRN: https://ssrn.com/abstract=2470113 or http://dx.doi.org/10.2139/ssrn.2470113

Michael E. Bradbury

Massey University ( email )

School of Accountancy
Private Bag 102 904
Auckland
New Zealand
64 9 414 0800 (Phone)
64 9 441 8133 (Fax)

Tom Scott (Contact Author)

Auckland University of Technology ( email )

AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand

Register to save articles to
your library

Register

Paper statistics

Downloads
65
Abstract Views
762
rank
338,576
PlumX Metrics