nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2006‒07‒09
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Tax Treatment of Business Investments in Intellectual Assets: An International Comparison By Jacek Warda
  2. Australian Government Balance Sheet Management By Wilson Au-Yeung; Jason McDonald; Amanda Sayegh
  3. Labor market competition, Transition, Russia, Labor tying. By Guido Friebel; Sergei Guriev
  4. La question du genre en comptabilité : analyses théoriques et méthodologiques By Lambert, Caroline; Dambrin, Claire
  5. Capital Gains Taxes and Asset Prices: Capitalization or Lock-In? By Zhonglan Dai; Edward Maydew; Douglas A. Shackelford; Harold H. Zhang

  1. By: Jacek Warda
    Abstract: In a knowledge-based economy, business performance and overall levels of economic growth are increasingly dependent on the development and exploitation of intellectual assets. A number of OECD countries offer tax incentives to encourage and reward business expenditures on intellectual assets. This working paper examines the tax treatment of corporate expenditures on selected intellectual assets and develops an indicator of the relative generosity of tax systems in OECD countries to such investments. Five types of intellectual assets are considered: research and development (R&D), patents, workforce training, software and organisational change. The paper shows that although tax incentives have, to date, mainly favoured R&D expenditures, they are gradually embracing other types of intellectual assets, especially in those countries that provide more generous tax treatment of R&D. Nineteen OECD countries had specific R&D tax incentives in place in 2005, up from only 12 in 1996, and 6 offered tax incentives for corporate training. <BR>Dans une économie du savoir, la performance des entreprises et les taux de croissance économique globaux dépendent de plus en plus du développement et de l’exploitation d’actifs intellectuels. Un certain nombre de pays de l’OCDE appliquent des mesures d’incitation fiscale afin d’encourager et de valoriser les dépenses des entreprises portant sur des actifs intellectuels. Ce document de travail examine le régime fiscal des dépenses des entreprises portant sur certains actifs intellectuels et définit un indicateur de la générosité relative des systèmes fiscaux des pays de l’OCDE vis-à-vis de ces investissements. Cinq catégories d’actifs intellectuels sont envisagées : recherche et développement (R-D), brevets, formation de la main-d’oeuvre, logiciels et changement organisationnel. La note montre que, si les incitations fiscales ont surtout à ce jour favorisé les dépenses de R-D, elles s’appliquent aussi de plus en plus à d’autres catégories d’actifs intellectuels, surtout dans les pays qui accordent déjà un régime fiscal plus généreux à la R-D. Dix-huit pays de l’OCDE appliquaient des mesures d’incitation fiscale spécifique à la R-D en 2005, au lieu de 12 seulement en 1996, et 6 d’entre eux appliquaient des mesures d’incitation fiscale aux dépenses de formation des entreprises.
    Date: 2006–05–22
  2. By: Wilson Au-Yeung; Jason McDonald; Amanda Sayegh
    Abstract: Since almost eliminating net debt, the Australian Government’s attention has turned to the financing of broader balance sheet liabilities, such as public sector superannuation. Australia will be developing a significant financial asset portfolio in the ‘Future Fund’ to smooth the financing of expenses through time. This raises the significant policy question of how best to manage the government balance sheet to reduce risk. This paper provides a framework for optimal balance sheet management. The major conclusions are that: – fiscal sustainability depends on both the expected path of future taxation and the risks around that path; – optimal balance sheet management requires knowledge of how risks affect the balance sheet (and therefore volatility in tax rates); and – the government’s financial investment strategy should reduce the risk to government finances from macroeconomic shocks that permanently affect the budget. Based on this framework, we find that a Future Fund portfolio that included (amongst other potential investments) domestic nominal securities and equities of selected countries would reduce overall balance sheet risk.
    JEL: H5 H6
    Date: 2006–06
  3. By: Guido Friebel (University of Toulouse (EHESS and IDEI), CEPR, IZA); Sergei Guriev (New Economic School/CEFIR and CEPR)
    Abstract: We show that earnings manipulation destroys incentives within the corporate hierarchy. In the model, top management has incentives to over-report earnings. An insider, for instance, a division manager may gain evidence about over-reporting. We show that the division manager is more likely to have evidence, when the performance of her own division is low. Top management wants to prevent information leakage to the outside world. Hence, when the division manager threatens to blow the whistle, top management pays her a bribe. As this occurs when division output is low, the wedge between payments in high and low states of nature decreases. Earnings manipulation therefore undermines incentives to exert effort and destroys value. We show that earnings manipulation is more likely to occur in flatter hierarchies; we also discuss implications of the auditing and whistle-blowing regulations of the Sarbanes-Oxley Act.
    Keywords: agency costs, Sarbanes-Oxley Act, whistleblowing, flat hierarchies
    JEL: D23 G30 M40 M52
    Date: 2004–06
  4. By: Lambert, Caroline; Dambrin, Claire
    Abstract: Gender issues are examined in the French and the Anglo-Saxon accounting literatures. The authors propose an overview of the theoretical frameworks and the methodologies used in the selected articles. An analysis of the glass ceiling in the accounting profession is provided. This article highlights the triple nature (individual, organisational and social) of obstacles that hinder the career path of women in the accounting profession. The detailed analysis of this specific theme confirms that methodological, theoretical and political questions are deeply embedded.
    Keywords: gender; glass ceiling; accounting profession; feminism; methodology
    Date: 2006–07–07
  5. By: Zhonglan Dai; Edward Maydew; Douglas A. Shackelford; Harold H. Zhang
    Abstract: This paper examines the impact on asset prices from a reduction in the long-term capital gains tax rate using an equilibrium approach that considers both demand and supply responses. We demonstrate that the equilibrium impact of capital gains taxes reflects both the capitalization effect (i.e., capital gains taxes decrease demand) and the lock-in effect (i.e., capital gains taxes decrease supply). Depending on time periods and stock characteristics, either effect may dominate. Using the Taxpayer Relief Act of 1997 as our event, we find evidence supporting a dominant capitalization effect in the week following news that sharply increased the probability of a reduction in the capital gains tax rate and a dominant lock-in effect in the week after the rate reduction became effective. Nondividend paying stocks (whose shareholders only face capital gains taxes) experience higher average returns during the week the capitalization effect dominates and stocks with large embedded capital gains and high tax sensitive investor ownership exhibit lower average returns during the week the lock-in effect dominates. We also find that the tax cut increases the trading volume during the week immediately before and after the tax cut becomes effective and in stocks with large embedded capital gains and high tax sensitive ownership during the dominant lock-in week.
    JEL: H2 G1 D4 M4
    Date: 2006–06

This nep-acc issue is ©2006 by Alexander Harin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.