The Influence of Elections on the Accounting Choices of Governmental Entities
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...
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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Wiley Blackwell
2013
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| Online Access: | http://hdl.handle.net/1721.1/76346 https://orcid.org/0000-0002-7469-9753 https://orcid.org/0000-0002-2221-5198 |
| _version_ | 1826206779920351232 |
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| author | Kido, Nolan Petacchi, Reining Weber, Joseph P. |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Kido, Nolan Petacchi, Reining Weber, Joseph P. |
| author_sort | Kido, Nolan |
| collection | MIT |
| description | 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. |
| first_indexed | 2024-09-23T13:38:07Z |
| format | Article |
| id | mit-1721.1/76346 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T13:38:07Z |
| publishDate | 2013 |
| publisher | Wiley Blackwell |
| record_format | dspace |
| spelling | mit-1721.1/763462022-10-01T16:10:53Z The Influence of Elections on the Accounting Choices of Governmental Entities Kido, Nolan Petacchi, Reining Weber, Joseph P. Sloan School of Management Petacchi, Reining Weber, Joseph P. 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. 2013-01-23T16:21:14Z 2013-01-23T16:21:14Z 2012-03 2011-01 Article http://purl.org/eprint/type/JournalArticle 0021-8456 1475-679X http://hdl.handle.net/1721.1/76346 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. https://orcid.org/0000-0002-7469-9753 https://orcid.org/0000-0002-2221-5198 en_US http://dx.doi.org/ 10.1111/j.1475-679X.2012.00447.x Journal of Accounting Research Creative Commons Attribution-Noncommercial-Share Alike 3.0 http://creativecommons.org/licenses/by-nc-sa/3.0/ application/pdf Wiley Blackwell SSRN |
| spellingShingle | Kido, Nolan Petacchi, Reining Weber, Joseph P. The Influence of Elections on the Accounting Choices of Governmental Entities |
| title | The Influence of Elections on the Accounting Choices of Governmental Entities |
| title_full | The Influence of Elections on the Accounting Choices of Governmental Entities |
| title_fullStr | The Influence of Elections on the Accounting Choices of Governmental Entities |
| title_full_unstemmed | The Influence of Elections on the Accounting Choices of Governmental Entities |
| title_short | The Influence of Elections on the Accounting Choices of Governmental Entities |
| title_sort | influence of elections on the accounting choices of governmental entities |
| url | http://hdl.handle.net/1721.1/76346 https://orcid.org/0000-0002-7469-9753 https://orcid.org/0000-0002-2221-5198 |
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