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Before There Was Enron, There Was Orange County: A Study of Local Government Financial‐Oversight Committees
Author(s) -
MATKIN DAVID S. T.
Publication year - 2010
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/j.1540-5850.2010.00961.x
Subject(s) - business , accounting , accountability , speculation , finance , government (linguistics) , financial crisis , sample (material) , stakeholder , economics , political science , management , law , linguistics , philosophy , chemistry , chromatography , macroeconomics
Recent financial scandals in some of America's largest corporations have prompted popular speculation that a similar crisis may occur within the public sector and, therefore, that government and nonprofit organizations should be required to adopt financial oversight practices similar to those that are mandated of publicly‐traded corporations in the Sarbanes‐Oxley Act of 2002. One of those mandated practices—the use of financial‐oversight committees—is already a common practice in public organizations, though little is known about its effectiveness. This study uses a national sample of local governments to examine whether financial‐oversight committees improve financial control and strengthen stakeholder confidence in financial reporting. The findings provide preliminary support for the use of financial‐oversight committees as an effective tool to improve financial accountability in local government.