Determinants of Bifurcated Local Government Reporting Lag: The Potential for XBRL to Improve Timeliness

Sohl, Shannon N.; Waymire, Tammy R.; Webb, Thomas Z.

doi:10.2308/jeta-52069

Cited by 10 publications

(6 citation statements)

References 21 publications

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“…Zhou also uncovers that delay is greater in the cases of more complex XBRL filings and can be mitigated by a service provider with more XBRL filing experience. For more on XBRL as a tool to improve the timeliness of local government reporting, see Sohl et al (2018).…”

Section: Results Of the Systematic Literature Reviewmentioning

confidence: 99%

Twenty years of XBRL: what we know and where we are going

Bartolacci

Caputo

Fradeani

et al. 2020

MEDAR

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Purpose This paper aims to extend the knowledge of eXtensible Business Reporting Language (XBRL) to synthesize what 20 years of accounting and business literature on XBRL suggests about the effective improvement from its implementation in financial reporting. Design/methodology/approach A systematic literature review and bibliometric analysis of 142 articles resulted in the identification of 5 primary research streams: adoption issues; financial reporting; decision-making processes, market efficiency and corporate governance; audit and assurance issues; and non-financial reporting. Findings The results reveal a scarcity of studies devoted to explicating the consequences of XBRL implementation on financial reporting outside the SEC’s XBRL mandate and listed companies’ contexts.. Also, some papers’ results question the usefulness of the language on the decision-making process. The overall lack of literature concerning the impact of XBRL on financial statement preparers, especially with reference to SMEs, is evident. Moreover, the consequences on corporate governance choices and the relevant internal decision-making processes are rarely debated. Research limitations/implications The findings are useful for users of companies’ financial disclosure policies, particularly for regulators who manage XBRL implementation in countries where XBRL has not yet been adopted as well as for others working in specific areas of financial disclosure, such as non-financial reporting and public sector financial reporting. Originality/value This study differs from previous literature on XBRL as it focuses on a wider period of analysis and offers a unique methodology – combination of bibliometric and systematic review – as well as a business perspective for deepening XBRL.

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Section: Results Of the Systematic Literature Reviewmentioning

confidence: 99%

Twenty years of XBRL: what we know and where we are going

Bartolacci

Caputo

Fradeani

et al. 2020

MEDAR

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“…Illinois municipalities are more likely to be served by regional and local firms. The proxy we use for audit firm monitoring has been used in the government audit literature as a proxy for expertise, AUDEXPERTISE , and is measured as the number of local government audits conducted by the municipality’s audit firm in the specified year (Sohl et al , 2018; Lopez and Peters, 2010; Payne and Jensen, 2002). We expect the coefficient for AUDEXPERTISE to be positive if the expertise of the firm serves as a monitoring mechanism.…”

Section: Methodology and Resultsmentioning

confidence: 99%

“…We expect the coefficient for AUDEXPERTISE to be positive if the expertise of the firm serves as a monitoring mechanism. We also incorporate a control variable for whether the municipality changed auditors from the prior to the current year, AUDCHANGE (Sohl et al , 2018; Lopez and Peters, 2010; Payne and Jensen, 2002). We expect the coefficient for AUDCHANGE to be negative, i.e., switching auditors will be associated with lower pension funding[25].…”

Section: Methodology and Resultsmentioning

confidence: 99%

The effect of GAAP conformity on pension underfunding

Davidyan

Waymire

2018

JPBAFM

Self Cite

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Purpose The purpose of this paper is to examine the association between conformity with generally accepted accounting principles (GAAP) indicated by Governmental Accounting Standards Board (GASB) 34 presentation and pension underfunding in Illinois. Design/methodology/approach The authors used a fixed effects regression and employed a sample of Illinois municipalities (n=2,565 municipal-year observations) over the period 2009–2014. Findings The findings show that GAAP is inversely associated with pension underfunding, but only among the subsample of municipalities that are within the healthy pension funding range, i.e., above 80 percent funded. These municipalities may be in a better position to increase pension funding in response to the disciplining effect of broad GAAP conformity. Research limitations/implications The paper focuses solely on one state and one multi-employer plan. Future studies should consider assessing the applicability of the results to other states and plan settings. Social implications The results inform the standard-setting process, particularly as the implementation of the new GASB standards is evaluated and as GASB 34 is reexamined. Originality/value Despite concerns associated with state and local pension underfunding, academic studies examining its determinants are few. The sample setting is representative of municipal pension plans in the USA (with a comparable average pension funding ratio of 74.2 percent) and provides variability in GAAP conformity (the state encourages, but does not require, financial statement presentation consistent with GASB 34), as well as homogeneity in actuarial assumptions across observations (all sample municipalities participate in a large multi-employer municipal pension plan). The sample period immediately precedes the implementation of GASB Statements Nos 67 and 68, which increase the scope of pension reporting, providing the opportunity to consider the effects of broad GAAP conformity and a baseline for subsequent consideration of the effects of the new standards.

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“…This is due to various complex factors such as limited resources, staffing issues and auditor constraints (e.g. limited expertise, busy season schedules) (Sohl et al. , 2018).…”

Section: Background and Literature Reviewmentioning

confidence: 99%

“…For another example, research (e.g. Sohl et al ., 2018; Cagle et al ., 2014; Johnson et al ., 2002; Payne and Jensen, 2002; Cuny et al ., 2020) suggests that complex management and audit characteristics might influence timely reporting.…”

Section: Notesmentioning

confidence: 99%

Regulated public accessibility to municipalities’ financial reports and bond interest cost

Cha,

Plante,

Ragland

2024

JPBAFM

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PurposeIn this study, we examine regulated public accessibility to municipalities’ financial reports and bond interest cost. In particular, we examine whether there is information content in a component of a constrained filing period that is useful to municipal bond market participants. The component of a filing period that we focus on is the period of time between an audit report date and a regulated public accessibility date.Design/methodology/approachTo explore our research question, we collect a sample of observations from municipalities that: (1) are required to post annual/audit financial reports on a centralized state-level repository that includes a “transparent” date stamp on when reports are made publicly available and (2) have issued general obligation bonds. Our sample is limited to one observation per municipality. The sample period is 2006–2019. In terms of approach, we use an ordinary least square (OLS) regression model to empirically test whether the time period between municipalities’ audit report date and state-required repository filing date is associated with general obligation bond interest cost.FindingsWe find support for the idea that there is information content in a component of a constrained filing period. In particular, we hypothesize and find a positive association between the time period between an audit report date and a state filing date and general obligation bond interest cost. Seemingly, this component of time may provide something unique or not available in other components of a constrained filing period (e.g. the fiscal year-end date to the audit report date). In post hoc analyses, we also find that both components of the constrained filing period in our setting (i.e. the audit report date to state filing date and the fiscal year-end date to audit report date) need to be considered for either of the components to be significant. Moreover, although both components are necessary, the audit report date to state filing date component appears to have a slightly stronger association (in terms of statistical significance) with general obligation bond interest costs.Research limitations/implicationsTo our knowledge, Illinois is the only state that provides a date stamp on when municipalities’ financial information is made publicly available on a centralized repository. As such we focus on municipalities in Illinois. While this increases the internal validity of our research, it potentially limits generalizability across other states. Also, as a reflection of the sample constraint, the number of observations in our study is relatively small. As part of post hoc analyses, we take a closer look at our sample, model and variables used to test our hypothesis.Practical implicationsFor stakeholders, each component of a constrained filing period may provide unique information. For example, the time period between an audit report date and a regulated filing date may send a positive signal about the quality of financial management to investors. For regulators, requiring some sort of centralized public access to municipal financial reports that have transparent time constraints may help states provide stronger governance and help lower municipalities’ borrowing costs.Originality/valueWe use a novel approach (with the Illinois date stamp filing information) to examine our research question. Most prior research has often relied on an assumption that the time between fiscal year-end and the audit report date is the component of time that provides useful information to investors (e.g. Henke and Maher, 2016). In our setting, we explore and find that a component of a constrained filing time period (i.e. the date from an audit filing to a required public accessibility filing) may also provide impactful information to investors.

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Determinants of Bifurcated Local Government Reporting Lag: The Potential for XBRL to Improve Timeliness

Cited by 10 publications

References 21 publications

Twenty years of XBRL: what we know and where we are going

Twenty years of XBRL: what we know and where we are going

The effect of GAAP conformity on pension underfunding

Regulated public accessibility to municipalities’ financial reports and bond interest cost

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