A Preliminary Investigation of Fiscal Sustainability Reporting by the U.S. Government: Understandability and Usefulness

• In Event: Taxes, firm profitability and public debt
  In Dialogue Session: Taxes, Firm Profitability and Public Debt

Abstract

Rise in public debt and changing demographics have prompted interest in fiscal sustainability reporting. Since 2010, fiscal sustainability information is included as supplementary information in the financial report of the U.S. government (CFR). The objective is to convey this information in a way that is meaningful and understandable to readers. Whether this objective is met has not been investigated.
This study examines whether information from the CFR is understandable by respondents with varying accounting knowledge and whether it affects concern about debt and acceptance of reforms, even if detrimental to self.
To assess understanding of selected information from the CFR, an experimental task was administered to 95 students in different majors. Knowledge of debt was assessed prior to exposure to CFR information. Concern about debt was measured before and after the experimental task. Respondents were also asked to indicate their agreement with five strategies.

Author

• Veronique Frucot, Christopher Newport University