The effects of the new fiscal rule and creative accounting: Empirical evidence from Japanese municipalities

Haruaki Hirota and Hideo Yunoue

MPRA Paper from University Library of Munich, Germany

Abstract: The purpose of this paper is to analyze creative accounting by stock-flow adjustment in Japanese municipalities after the introduction of a new fiscal rule. We contribute to the literature by analyzing the interdependency of the new fiscal indexes, which comprise three flow indexes and one stock index. Our main contribution is the finding that municipalities tolerated an increase in their stock indexes while they decreased their flow indexes by reducing reserved funds to avoid exceeding the criteria of the new fiscal rule, as the stock index criterion is weaker than that of the three flow indexes.

Keywords: fiscal rule; creative accounting; stock-flow adjustments (search for similar items in EconPapers)
JEL-codes: H72 H74 H77 (search for similar items in EconPapers)
Date: 2017-06-20
New Economics Papers: this item is included in nep-acc and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The effects of the new fiscal rule and creative accounting: Empirical evidence from Japanese municipalities (2020)
Working Paper: The effects of the new fiscal rule and creative accounting: Empirical evidence from Japanese municipalities (2017)
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