The Role of Generally Accepted Reporting Methods in the Public Sector: An Empirical Test Willlam R Baber and Pradyot K. Sen Thts study explores the role of standard or generally accepted accountmg and reportmg methods m the public sector It differs from prior studtes that address public sector accounting ISSUES m that It considers more dIrectI> how the pohttcal process influences declslons to report financial mformatlon The primary contentton IS that adopting standard reporting methods reduces costs to public ofiiclals that arise from factors that characterize polItIcal markets Emplrtcal evidence based on data from the state governments IS consistent wtth this contention but theoretical and methodologtcal problems restrict our abdtty to ascertam which specific factors are relevant Introduction This study employs an Interest group theory of government (McCormrck and Tollrson 1981) to address the role of standard or generally accepted accountmg and reporttng methods In the public sector We posn that elected officials establish and adopt standard reporting methods to reduce costs that result from contracting between elected offictals and their supportmg interests Our analysis leads us to expect relatlonshrps between the use of standard repottmg practices and the factors that characterize polmcal markets To investigate emprrrcally these relationships, we use data from the state governments in the United States At the outset. we acknowledge two hmttattons that need to be considered when evaluating the arguments and the evtdence offered In this study First, polmcal economtsts have yet to develop a comprehensive theory of polmcal markets and therefore our analysts srmplrfies a complex and largely unexplored, polmcal process More specifically, the exposmon Ignores a variety of factors that potentially influence accounting zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCB policy choice In the pubhc sector and thus IS likely to present a more direct link between the specified factors and the role of