This paper examines investment choices of nonprofit hospitals. It tests how shocks to cash flows caused by the performance of the hospitals’ financial assets affect hospital expenditures. Capital expenditures increase, on average, by 10 to 28 cents for every dollar received from financial assets. The sensitivity is similar to that found earlier for shareholder-owned corporations. Executive compensation, other salaries, and perks do not respond significantly to cash flow shocks. Hospitals with an apparent tendency to overspend on medical procedures do not exhibit higher investment-cash flow sensitivities. The sensitivities are higher for hospitals that appear financially constrained

/pdf/investment-decisions-of-nonprofit-firms-evidence-from-1do2on1wa8.pdf

Investment Decisions of Nonprofit Firms: Evidence from Hospitals

The aim of this paper is to examine the influence of Portuguese Foundation’s characteristics on their annual report disclosure practices. Data were collected from 142 Foundations in Portugal, which represents 50.9% of the Portuguese foundational sector. Supported by a Structural Equation Model (SEM), this study evaluates cause–effect relationship between Voluntary Disclosure, Board Structure, Organizations’ Characteristics and the existence of Auditing. Findings reveal that Organizations’ Characteristics influence the forms of Auditing, and on its turn, Auditing has a positive indirect impact on Voluntary Disclosure. Contrary to expectations, Board Structure does not affect Voluntary Disclosure. This paper fills a void in the literature by examining the impact of Foundations’ characteristics on their voluntary disclosure of financial and non-financial information.

Factors Influencing Voluntary Disclosure in the Annual Reports of Portuguese Foundations

I study the effect of state fiscal monitoring on municipal governance. I focus on governance outcomes related to financial reporting quality, local corruption, political entrenchment, and the financial soundness of municipalities. I exploit the staggered adoption of fiscal monitoring policies, which entail a regular review of municipal financial reporting for signs of fiscal distress. I find that the introduction of monitoring policies is associated with an increase in proxies for reporting quality, a decrease in corruption convictions, and a reduced likelihood of reelection of incumbent politicians. Consistent with the intended purpose of state monitoring, I find evidence consistent with the financial health of municipalities improving following the initiation of state monitoring, as measured with financial statement-based ratios. Collectively, my results are consistent with state fiscal monitoring improving several important aspects of municipal governance.

Does Fiscal Monitoring Make Better Governments? Evidence from US Municipalities

Kido, Petacchi and Weber [2012] investigate whether the occurrence of a state gubernatorial election is important to understanding the accrual choices of preparers of the state’s comprehensive annual financial report. Central to the authors’ argument is the idea that voters do not like budget deficits. Politicians, in response, have incentives to use accounting choices to mask deficits in the period before elections. Focusing on a specific accrual, the changes in compensated absences liability, the authors find evidence that the discretionary part of this accrual is smaller in the period before an election, which is consistent with politicians attempting to improve the picture of the state’s financial health. In addition, the authors show that accrual manipulation is positively associated with the vote share of incumbent governors in elections. In my discussion, I ask two questions: (1) how strong are governors’ political incentives to manipulate accruals in the run-up to elections? (2) Can the association between discretionary compensated absence accruals and elections be explained by forces other than politically motivated accounting manipulation? I argue that the incentives to manipulate accruals might well be weak given strong disciplinary mechanisms that induce politicians to transparency. What’s more, I document that elections might produce patterns in state employment. As the compensated absences liability is linked to the payroll, election-induced changes in state employment might be reflected in this accrual. Evidence of an association between the compensated absences accrual and elections, then, does not necessarily imply that politicians manage accounting numbers. To further illustrate this point, I show empirically that gubernatorial elections have little explanatory power for state financial reporting choices that are unaffected by state employment. JEL classification: H70, H72, M41

Discussion of “The influence of elections on the accounting choices of governmental entities

........... ............................................................................................................................ ii Acknowledgments ......................................................................................................................... iii List of Tables ................................................................................................................................. vii List of Figures ................................................................................................................................. ix List of Abbreviations......... ....................................................................................................... ...xi Chapter 1: Introduction ................................................................................................................... 1 Overview ..................................................................................................................................... 1 Literature ..................................................................................................................................... 5 Statement of Problem .................................................................................................................. 7 Research Questions ..................................................................................................................... 9 Methodological Overview ......................................................................................................... 10 Chapter Summary ...................................................................................................................... 13 Chapter 2: Literature Review ........................................................................................................ 14 Introduction ............................................................................................................................... 14 Evolution of the Single Audit Act ............................................................................................. 15 The Single Audit Act (SAA) ..................................................................................................... 33 Single Audit Act Literature ....................................................................................................... 38

Single Audit Act Findings and their Impact on State Funding Levels

Preface.Chapter 1: Introduction and Background.What Are Generally Accepted Accounting Principles?Who Sets Generally Accepted Accounting Principles for Governments?Do Governments Need to Comply with Generally Accepted Accounting Principles?Why Is Governmental Accounting and Financial Reporting Different from Commercial and Not-for-Profit Accounting and Financial Reporting?To What Entities Do Governmental Generally Accepted Accounting Principles Apply?Chapter 2: Basic Governmental Accounting Concepts.Understanding the Different Bases of Accounting.Understanding What Measurement Focuses Are Used by Governments.Defining and Understanding the Nature of Assets.Defining and Understanding the Nature of Liabilities.Defining and Understanding the Nature of Net Assets.Chapter 3: Understanding Fund Accounting.Fund Fundamentals.Governmental Funds.Proprietary Funds.Fiduciary Funds.Chapter 4: Basics of Governmental Financial Statements.General-Purpose Financial Statements.Management's Discussion and Analysis.The Basic Financial Statements.Required Supplementary Information.Comprehensive Annual Financial Report.Chapter 5: Understanding the Reporting Entity.Background.Accountability Focus.Financial Reporting Entity Defined.Display of Component Units.Chapter 6: Revenues from Nonexchange Transactions.Classes of Nonexchange Transactions.Accounting Requirements.Property Taxes.Income and Sales Taxes, and Other Derived Tax Revenues.Adjustments for the Accrual Basis of Accounting.Grants and Other Financial Assistance.Chapter 7: Capital Assets.Where Are Capital Assets Recorded in the Financial Statements?Recording and Valuing Capital Assets.Understanding Depreciation.Using the Modified Approach in Lieu of Depreciating Infrastructure Assets.The Basics of Capitalized Interest.Capital Assets Resulting from Capital Lease Transactions.Impairments of Capital Assets.Chapter 8: Accounting for Pensions.GASBS 27 Requirements for Defined Benefit Plans.Calculation of the ARC.Parameters for Actuarial Calculations, Including the ARC.Net Pension Obligation.Recording Pension-Related Assets, Liabilities, and Expenditures/Expenses.Pension Disclosures.Employers with Defined Contribution Plans.Chapter 9: Sundry Accounting Topics.Accounting for Investments.Reporting Unrealized Gains or Losses.Investment and Deposit Disclosures.Compensated Absence Accruals.Landfill Closure and Postclosure Care Costs.Derivatives, Including Interest Rate Swaps.Securities Lending Transactions.Chapter 10: Upcoming Developments in Governmental Accounting.Other Postemployment Benefits.Economic Condition Reporting-Statistical Section.Derivatives and Hedging.Pollution Remediation Obligations.Net Asset and Fund Balance Reporting.Service Efforts and Accomplishments (SEA) Reporting.Index.

Governmental Accounting Made Easy

Preface. Chapter 1. Understanding the Basics of Not-for-Profit Accounting. Chapter 2. Basic Financial Statements of a Not-for-Profit Organization. Chapter 3. Accounting for Contributions. Chapter 4. Accounting for Investments and Financial Instruments. Chapter 5. Accounting for Activities with Joint Costs and Indirect Cost Allocation. Chapter 6. Affiliated Organizations. Chapter 7. Collections. Chapter 8. Split Interest Agreements. Chapter 9. Accounting for Pension and Other Post employment Employee Benefit Plans. Chapter 10. Lease Accounting Fundamentals. Chapter 11. Analyzing the Financial Health of Not-for-Profit Organizations. Chapter 12. Current Developments in Not-for-Profit GAAP.

Not-for-Profit Accounting Made Easy

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Governmental Accounting Made Easy

Not-for-Profit Accounting Made Easy