Beyond Boilerplate: Analyzing the Dynamics of MD&A Content in State Financial Reports

ABSTRACT For over two decades, state and local government financial reports have included MD&A to provide qualitative insights complementing financial statements. However, concerns exist about its generality and lack of year‐specific details, with limited research on MD&A content changes. Using computational text analysis, this study measures MD&A similarity over time for all US states (2003–2022) and examines its determinants. Results show that cash and budgetary indicators do not drive revisions, while long‐term solvency changes lead to modest increases. State auditor competence is also linked to larger revisions, highlighting the role of administrative expertise in MD&A preparation.