nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2006‒04‒08
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Energia nuclear: Accounting for Financial Instruments: An Analysis of the Determinants of Disclosure in the Portuguese Stock Exchange By Patrícia Teixeira Lopes; Lúcia Lima Rodrigues
  2. Dirty surplus accounting and residual income - Broken link between accounting and finance? By Krotter, Simon
  3. Cross-Border Acquisitions and Corporate Taxes: Efficiency and Tax Revenues By Norbäck, Pehr-Johan; Persson, Lars; Vlachos, Jonas
  4. What are their Words Worth? Political Plans and Economic Pains of Fiscal Consolidations in New EU Member States By Jan Zápal; Ondrej Schneider
  5. Bureaucratic Corruption and Profit Tax Evasion By Laszlo Goerke

  1. By: Patrícia Teixeira Lopes (Faculdade de Economia, Universidade do Porto); Lúcia Lima Rodrigues (School of Management and Economics, University of Minho)
    Abstract: This paper analyzes the determinants of disclosure level in the accounting for financial instruments of Portuguese listed companies. We have constructed an index of disclosure based on IAS 32 and 39 disclosure requirements and computed the index score for each company. Consequently, this study also analyzes the characteristics of companies that are closest to IAS before 2005. The analysis includes variables that capture intrinsic features of Portuguese companies and institutional regulatory context, such as capital structure and characteristics of the corporate governance structure, within contingency theory. We could not find significant influence of corporate governance structure and of financing structure. We conclude that disclosure degree is significantly related to size, type of auditor, listing status and to the economic sector. This research reveals areas for improvement of the Portuguese companies’ reporting practices and suggests areas for intervention of the Portuguese capital markets regulator in the context of mandatory IAS after 2005.
    Keywords: Financial instruments accounting, Disclosure indices, Firm-specific characteristics, International Accounting, IAS, Portugal
    JEL: M41
    Date: 2006–04
  2. By: Krotter, Simon
    Abstract: Ziel des vorliegenden Beitrags ist es, die Auswirkungen von Kongruenzdurchbrechungen auf die Bewertung, Vorteilhaftigkeitsprüfung und Performance-Messung mit buchwertbasierten Residualgewinnen zu bestimmen. Wir wählen dazu folgendes Vorgehen: Kapitel II stellt die Wirkungsweise des Kongruenzprinzips zur Erzielung von Barwertkompatibilität buchwertbasierter Residualgewinne vor. Kapitel III definiert Kongruenzdurchbrechungen bzw. dirty surplus accounting und beschreibt deren Auftreten in den gängigen Rechnungslegungssystemen. Kapitel IV stellt den Kern der Untersuchung dar und zeigt zunächst anhand von Fallbeispielen die aus Kongruenzdurchbrechungen resultierenden Verzerrungen. Diese werden schließlich formalisiert und Ansätze zu deren Korrektur vorgeschlagen. Kapitel V geht der Frage nach, ob dirty surplus accounting den "link between accounting and finance" brüchig werden läßt. Wir werden sehen, daß Kongruenzdurchbrechungen für die empirische Anwendung von Residualgewinnen weit weniger Gefahren bergen, als man zunächst anzunehmen geneigt ist. Kapitel VI faßt zusammen.
    Keywords: Residual Income, clean surplus principle, valuation, performance measurement
    JEL: G31 M41
    Date: 2006–04–04
  3. By: Norbäck, Pehr-Johan (The Research Institute of Industrial Economics); Persson, Lars (The Research Institute of Industrial Economics); Vlachos, Jonas (Stockholm Institute of Transistion Economics)
    Abstract: We find that reduced foreign corporate taxes may lead to inefficient foreign acquisitions if complementarities between foreign and domestic assets are low, and to efficient foreign acquisitions if such complementarities are high. Moreover, with large complementarities, foreign acquisitions can increase domestic tax revenues. The reason is that in the bidding competition between the foreign firms, all benefits from the acquisition, including tax advantages and evaded taxes, are competed away and captured by the domestic seller which, in turn, pays capital gains tax on the proceeds. Technical issues in the tax code, such as the treatment of goodwill deductibility, is also shown to crucially affect the pattern of foreign acquisitions.
    Keywords: Tax Competition; Ownership; Tax Revenues; FDI; M&As
    JEL: F23
    Date: 2006–03–09
  4. By: Jan Zápal; Ondrej Schneider
    Abstract: In this paper, we track fiscal authority behaviour in the ten new EU member states (NSM) in the period which immediately preceded their EU accession. We first present basic stylized facts about public budgets of those countries. The paper then analyses reasons which led to periods of fiscal consolidation in the NMS. Secondly, we also present evidence from Pre-Accession Economic and Convergence programmes of NMSs concerning planned steps of the fiscal authorities and try to contrast them with reality. Throughout the paper, we identify two different groups of countries which significantly differ in their fiscal behaviour. On the one side is the group of Baltic countries, displaying strong reform effort and responsible fiscal policy usually supported by strong economic growth. On the second extreme, we identify fiscally irresponsible central European countries and two Mediterranean islands displaying lax fiscal policies and little political will to implement costly reforms. Somewhere between stand Slovenia and Slovakia, first without a strong reform performance yet with budget deficits in compliance with the Stability and Growth Pact and later with recent reform efforts. Our key finding concerning the behaviour of the fiscally irresponsible group of countries is that their current problems with high budget deficits originate in their lax approach and inability to implement politically costly expenditure cuts which is apparent from their revision of budget plans and endeavour to shift envisioned deficit reductions into the future. Yet, this strategy has led those countries to an uncomfortable position vis-à-vis European fiscal rules.
    Keywords: fiscal policy, new member states, consolidations, Stability and Growth Pact, excessive deficit procedure, convergence programmes
    JEL: E60 E62 H60 H87
    Date: 2006
  5. By: Laszlo Goerke
    Abstract: Firms may evade taxes on profits and can also avoid fulfilling legal restrictions on production activities by bribing bureaucrats. It is shown that the existence of tax evasion does not affect corruption activities at the firm level, while the budgetary repercussions of tax evasion induce less corruption. Policy measures which alter the gains or losses from corruption have a non-systematic impact on tax evasion behaviour.
    Keywords: corruption, firms, tax evasion
    JEL: D73 H25 H26
    Date: 2006

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