The Influence of Elections on the Accounting Choices of Governmental Entities
Name
Weber_Influence of elections.pdf
Size
262.65 KB
Format
Adobe PDF
Checksum (MD5)
552c58fdd5794c072b5f17380780f155
Author(s)
Kido, Nolan
Petacchi, Reining
Weber, Joseph P.
Date Issued
March 2012
Journal
Journal of Accounting Research
Publisher
Wiley Blackwell
Citation
Kido, Nolan, Reining Petacchi, and Joseph Weber. “The Influence of Elections on the Accounting Choices of Governmental Entities.” Journal of Accounting Research 50.2 (2012): 443–476.
Version
Author's final manuscript
Abstract
This paper investigates whether gubernatorial elections affect state governments’ accounting choices. We identify two accounts, the compensated absence liability account and the unfunded pension liability account, which provide incumbent gubernatorial candidates with flexibility for manipulation. We find that, in an election year, the liability associated with compensated absences and unfunded pension liabilities are both systematically lower. We also find that the variation in these employment-related liabilities is correlated with proxies for the incumbent's incentives and ability to manipulate their accounting reports. Jointly, these results suggest that state governments manipulate accounting numbers to present a healthier financial picture in an election year.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike 3.0
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1111/j.1475-679X.2012.00447.x
