Market segmentation and the association between municipal financial disclosure and net interest costs
Article Abstract:
The relationship between municipal financial disclosure and net interest costs (NIC) when the municipal bond market is assumed to be segmented was investigated. It was hypothesized that the relationship between financial measures and NIC is greater for bonds issued in regional markets than for those offered in national markets. A sample of new general obligation bond issues offered by 100 cities within a five-year period was used for the study. Results validated the study's hypothesis. It was found that accounting and auditing variables are more closely related with NIC in the regional primary markets. Findings further indicated that the quality of financial reporting is better in municipalities in the national market.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1992
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Auditor changes: a joint test of theories relating to agency costs and auditor differentiation
Article Abstract:
The association between a firm's agency costs and its demand for a quality-differentiated audit is examined. The study uses a 'brand name' model which defines the Big Eight group of auditors as the higher quality suppliers. Tests have supported the brand name model by showing that agency cost proxies are significant as a group in the brand name model. Agency-related incentives for higher quality audits included diffusion of ownership, owner-debtholder conflict, and monitoring of incentive performance contracts.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1988
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