Evidence on the Importance of the Financial Reporting Function in Municipal Governments

The Impact of Audited Financial Statements on Local Governments: Evidence from US School Districts

“…Consistent with this argument, some studies show that in the corporate setting, financial reporting mandates may not unambiguously benefit firms [23,24]. However, the level of voluntary financial reporting is relatively low in the local government setting [25]. Frictions in the municipal setting may lead to the low level of voluntary reporting.…”