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Financial Condition and Internal Control Deficiencies: Evidence From New York Counties
Author(s) -
Kim Youngsung,
Matkin David S. T.
Publication year - 2019
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/pbaf.12246
Subject(s) - financial distress , control (management) , finance , business , financial management , accountability , accounting management , economics , accounting , financial system , political science , accounting information system , management , law
In recent years, significant attention has been given to measuring the financial condition of local governments, predicting when those governments will experience fiscal distress, and understanding how public managers navigate financial shortfalls. Researchers have given less focus, however, to understanding how financial condition affects other financial management practices—such as the administrative systems used to ensure financial accountability. This study uses a 19‐year panel of county‐level data from New York State to examine whether financial condition affects the likelihood of internal control deficiencies. The findings indicate that the incidence and severity of internal control deficiencies increase as financial condition deteriorates.