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
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
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