Using a sample of public and private banks and a county-level index for social capital, we study how social capital relates to accounting transparency. In a region with high social capital, individuals have a greater propensity to honor an obligation and there is greater mutual trust within a much denser network that deters opportunistic/self-serving actions such as misrepresentation of accounting numbers and taking excessive risk for personal gain (Jha and Chen 2015). Consistent with expectations, our analysis indicates that social capital is positively associated with accounting transparency (proxied by accounting restatements and income-increasing earnings management) and this relationship is stronger for small, unaudited private banks. Additionally, we document that social capital is negatively associated with bank risk taking in the 2000-2006 pre-financial crisis period. We also find that banks in low social capital counties that are likely to engage in higher risk taking and have lower financial reporting transparency experienced more bank failures and bank trouble during the 2007-2009 financial crisis.