nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2006‒08‒05
four papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Comparing the value revelance of R&D reporting in Germany: standard and selection effects By Ramb, Fred; Reitzig, Markus
  3. A Superior Hybrid Cash-Flow Tax on Corporations By Howell H. Zee
  4. Using the Balance Sheet Approach in Surveillance: Framework, Data Sources, and Data Availability By Johan Mathisen; Anthony J. Pellechio

  1. By: Ramb, Fred; Reitzig, Markus
    Abstract: On the basis of accounting and market data for firms and groups listed on German stock exchanges between 1997 and 2003, we show that the value relevance of R&D information under German accounting standards can be superior to that provided by US-GAAP and IAS. The results, obtained while dynamically controlling for partial freedom of firms to choose a standard in a modified Q model, show that the risk of IAS/US-GAAP misinforming investors during “bear market” periods is more relevant than their comparative advantage over the prudence principle of the German Commercial Code in “bull market” periods. Using the approach chosen for this study, it is possible not only to draw a clear dividing line between standard and selection effects but also to disentangle them along theoretical lines more clearly than in earlier studies.
    Keywords: Accounting sta ds, sta d selection, R&D, value relevance, Germany
    JEL: D82 K11 M40 M41
    Date: 2005
  2. By: Cristina de Fuentes Barberá (Universitat de València); María Consuelo Pucheta (Universitat Jaume I)
    Abstract: As a result of the publication of the Code of Corporate Good Governance in 1998, known as the Olivencia Code, some companies voluntarily created an audit committee, after the recommendation of the Code in which all companies, especially listed, were encouraged to create them. Therefore, the aim of this work is to analyse which factors are associated with voluntary audit committee formation of those companies listed on the Continuous Market through 1999. In particular we analyse the association of factors such as Board independence and size, auditor size, agency costs, economies of scale, institutional investors, the audit report and auditor tenure. We find that voluntary audit committee formation is positively correlated with the proportion of independent directors on the board of directors and the economies of scale. On the other hand, the results show that board size, auditor size, agency costs of equity and debts, institutional investors with shares on the board of directors, a qualified audit report and audit tenure are not factors associated with voluntary audit committee formation. A raíz de la publicación del Código de Buen Gobierno Corporativo en 1998, también conocido como Código Olivencia, algunas empresas crearon voluntariamente un comité de auditoría, tras la recomendación del Código en la que instaba a todas las empresas, sobre todo cotizadas, a la formación de los mismos. Así pues, el objetivo de este trabajo es analizar qué motivos indujeron a las empresas cotizadas en el mercado continuo durante 1999 a crear voluntariamente comités de auditoría. Concretamente, analizamos la asociación de factores como la independencia y tamaño del consejo de administración, el tamaño del auditor, los costes de agencia, las economías de escala de implementar un mecanismo de control, los inversores institucionales, el informe de auditoría y la duración del encargo de auditoría. Los resultados ponen de manifiesto que la formación voluntaria de comités de auditoría está positivamente correlacionada con el porcentaje de miembros independientes que tenga el consejo de administración y las economías de escala. Por otra parte, los resultados revelan que el número de miembros del consejo de administración, el tamaño de la firma auditora, los costes de agencia de la propiedad y de la deuda, la representación de inversores institucionales con participación accionarial en el consejo de administración, la recepción de un informe de auditoría con salvedades y la duración del encargo de auditoría no son factores que se asocien con la formación voluntaria de un comité de auditoría.
    Keywords: comité de auditoría; formación voluntaria; corporate governance audit committee; voluntary formation; corporate governance
    JEL: G34 M14 M42
    Date: 2006–07
  3. By: Howell H. Zee
    Abstract: This paper proposes a new hybrid cash-flow tax on corporations that, on one hand, taxes only excess corporate profits as they accrue, and, on the other hand, treats real and financial transactions neutrally. It is, therefore, a superior tax compared to the cash-flow tax on real transactions that seems to have gained common acceptance. The hybrid tax is a modified version of the cash-flow tax on real and financial transactions combined. The modification involves replacing expensing of fixed assets with normal depreciation allowances, but the undepreciated value of fixed assets is carried forward with interest at the opportunity cost of equity capital.
    Date: 2006–05–12
  4. By: Johan Mathisen; Anthony J. Pellechio
    Abstract: Recent improvements in statistical methodologies and data availability are facilitating detailed, high-frequency, timely macroeconomic balance sheet analysis. This paper provides practical instruction on how to design the framework to analyze vulnerabilities in a country as well as an overview of data sources that can be employed for this analysis. The paper also discusses how these new datasets are enhancing surveillance activities related to balance sheet vulnerabilities.
    Keywords: Exchange rate policy surveillance , Financial risk , Risk management , Financial crisis , Capital account , Capital controls , Data collection , Data analysis ,
    Date: 2006–04–27

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