Working Paper 17: Abstract

Measuring Operations: An Analysis of the Financial Statements of U.S. Private Colleges and Universities  

As events in the business sector have highlighted, companies can play by the rules and yet produce misleading financial statements. This study examines the nongovernmental organizations that provide a substantial portion of higher education in the United States.  We seek to determine whether private colleges and universities take advantage of the discretion available to them under accounting and auditing standards by presenting an operating measure in their statement of activities. We find that nearly 60 percent of schools report an operating measure but the items included or excluded from operations vary widely.