Year-over-Year Changes in Municipal Management Discussion and Analysis Disclosures

• In Event: Government Financial Stability and Disclosures

Abstract

We investigate the determinants of year-over-year content changes in municipal management discussion and analysis (MD&A) disclosures. Similar to Brown and Tucker (2011), we calculate a measure for narrative disclosure by determining the degree to which the municipal MD&As change from the previous year. Using a sample of 1,143 municipal MD&A disclosures in fiscal years 2011 to 2015, our empirical analysis suggests that municipalities with larger economic changes modify their MD&A more than those with smaller economic changes. In addition, our evidence suggests that turnover in the top financial manager position is associated with greater MD&A content modification, while location in a GAAP mandated state is associated with fewer MD&A content changes. Overall, our analysis contributes to a better understanding of the provisions in GASB 34, specifically regarding narrative disclosure.

Authors

• Kevin T Rich, Marquette University

• Brent Louis Roberts, Virginia Commonwealth University

• Joseph M Wall, Marquette University

• Jean Xueqing Zhang, Virginia Commonwealth University