Regulated Public Accessibility to Municipal Financial Reports and Bond Interest Cost

• In Event: 1.02 Government Research Concurrent Session: Reporting & Accountability

Abstract

There is a robust stream of accounting literature on how timeliness (in terms of accessibility) of financial information is important in financial markets. However, concerns surrounding this topic continue to be raised, especially for local governments (Sohl, Waymire, and Webb 2018). In an effort to improve accessibility, some states are requiring municipalities to provide (within a specific time period) public access to audited financial reports using an online state-level repository. The purpose of the current study is to examine whether this type of regulation (measured by the time-period from audit filing date to the state repository filing date) is deemed useful by municipal bond market participants. We find that the timeliness of required accessibility to financial information is positively associated with bond interest costs. Our results suggest states (municipalities) have incentive to require (provide) financial reports with a repository to provide useful information to stakeholders (potentially lower bond interest costs).

Authors

• Yunshil Cha, University of New Hampshire

• Catherine Plante, University of New Hampshire

• Linda Ragland, University of New Hampshire