The additional complexity of federal laws likely is a major factor increasing audit time. The paper analyzes the audit reporting timeliness of U.S. cities with populations over 100,000 since bond investor analysis and signaling incentives should be strong. In addition, data was obtained from U.S. Census publications and state surveys. Complete information is available on 158 cities. Ordinary least square regression is the primary empirical analysis.
Additional analysis using multiple comparison tests extend the analysis for auditor characteristics.
This study provides partial support of hypothesized factors effecting the timeliness of municipal reporting. Cities with independent auditors, web pages, and the combination of a city manager form of government and a Certificate of Achievement report more timely than do other cities. In summary, the analysis suggests that municipal officials can signal above average performance by using resources under their control and that information reporting, including the Internet, may be one of those resources.