Examining the Usability of the Annual Comprehensive Financial Report’s MD&A using Textual Analytics

40 Pages Posted: 12 Feb 2021 Last revised: 9 Nov 2021

See all articles by Xinxin Wang

Xinxin Wang

Rutgers Business School - Rutgers University

Mauricio Mello Codesso

Rutgers Business School - Rutgers University

Hussein Issa

Rutgers, The State University of New Jersey - Accounting & Information Systems

Date Written: November 2, 2020

Abstract

[This research collected the Comprehensive Annual Financial Report (CAFR) of different municipalities within New York State and analyzed the usability of the Management's Discussion and Analysis (MD&A) using textual analysis method. Considering the previous studies of the listed company MD&A section and the evaluation of the usability of financial information, this study measures the usability of the CAFRs from the perspectives of timeliness, readability and usefulness. The results show that the usability of CAFR’s MD&A is very low, due to the length of issue period, its difficulty for the public to understand as well as their similarity from year to year. We suggest the municipalities increase the usability of their Reports by including a more detailed discussion and in-depth analysis in the MD&A. Most importantly, we suggest that municipalities provide machine-readable financial information to the public. Abstract Body]

Keywords: Comprehensive Annual Financial Report (CAFR), MD&A, New York States, Municipality, textual analysis, usability, timeliness, readability, usefulness

Suggested Citation

Wang, Xinxin and Mello Codesso, Mauricio and Issa, Hussein, Examining the Usability of the Annual Comprehensive Financial Report’s MD&A using Textual Analytics (November 2, 2020). Available at SSRN: https://ssrn.com/abstract=3723923 or http://dx.doi.org/10.2139/ssrn.3723923

Xinxin Wang (Contact Author)

Rutgers Business School - Rutgers University ( email )

Mauricio Mello Codesso

Rutgers Business School - Rutgers University

100 Rockafeller Rd, Piscataway, NJ 08854
100 Rockafeller Rd, Piscataway, NJ 08854
Piscataway, NJ New Jersey 08854
United States

Hussein Issa

Rutgers, The State University of New Jersey - Accounting & Information Systems ( email )

96 New England Avenue, #18
Summit, NJ 07901-1825
United States

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