The most visible credit market measure of the fiscal health of a municipality is the credit rating. In this article we ask whether the credit rating fully incorporates the fiscal stresses faced by municipal governments. We utilize state "tax effort" as a measure of the fiscal stress faced by a...

This paper provides an empirical test of the association between the MFOA Certificate of Conformance and creditor decisions in the market for new municipal bond issues. We report that the certificate does have information content for creditor decisions, particularly for medium quality bonds

Prior research (Wallace, 1981 Wilson and Howard, 1984) has implicitly as­sumed that the impact of accounting information on municipal borrowing costs is the same across all bond rating groups. This paper provides empirical evidence that the demand for accounting information is a function of...

State and local governments are not subject to Securities and Exchange Commission (SEC) regulations requiring compliance with generally accepted accounting principles (GAAP). It was only in 1980 that Standard & Poor's issued a policy statement indicating a failure to conform with GAAP would be...

This article examines the association between state regulation of accounting practices and municipal borrowing costs. The results demonstrate that stringent accounting regulations do have an effect on borrowing costs after abstracting the effect of other explanatory variables. The direction of...