nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2007‒03‒17
six papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Motherhood: The key to the glass ceiling ? the case of the big four in France By Dambrin, Claire; Lambert, Caroline
  2. A Research Note on the Relationship between the Control Environment and the Size of the Internal Audit Function in Belguim By G. SARENS
  3. Intangible assets as a conceptual problem and the fiction of fair value (in Spanish) By GALINDO LUCAS, ALFONSO
  5. Fresh Assessment of the Underground Economy and Tax Evasion in Pakistan: Causes, Consequences, and Linkages with the Formal Economy By Kemal, M. Ali
  6. Mark-to-Market Accounting and Liquidity Pricing By Franklin Allen; Elena Carletti

  1. By: Dambrin, Claire; Lambert, Caroline
    Abstract: Women in public accounting firms are still proportionally much fewer in the highest levels of the hierarchy than men, whereas the recruitement at a junior level tends to be more and more gender balanced. The aim of this paper is to propose ana analysis of the mechanisms that explain the barriers encountered by auditor mothers in their hierarchical progression within the Big Four in France.
    Keywords: case study; glass ceiling; gender; public accounting firms; motherhood.
    JEL: J16 O15
    Date: 2007–03–14
  2. By: G. SARENS
    Abstract: This study attempts to contribute to the literature by developing three control environment variables, reflecting the contemporary context in which internal auditing is operating, and testing how these variables are related with the size of the internal audit function. Data were collected through a questionnaire sent to Chief Audit Executives. The new control environment variables turned out to be relevant when studying the size of the internal audit function. The results show that the degree of formalisation of the risk management system and the risk culture are both positively associated with the size of the internal audit function. Furthermore, the significance of the control environment variables seems to be different between the smallest and largest companies in this study. The results of this study lead to an assumed model for further research.
    Keywords: internal auditing, control environment, Belgium.
    Date: 2007–01
    Abstract: In an institutional framework, intangible Asset Accountancy is a convenient thing for business, but it does not necessarily find a worth theoretical justification. Within perfect information and continuous activity assumptions, it remains demonstrated that the concept of intangible stands for a theoretical problem. In real life, where sometimes information does not exists at all, neither take place other theoretical assumptions, “reasonable value” assessment for those assets becomes an accountant fiction (and a fiscal one) . Another famous problem, that one of fixed capital, concurs with the theoretical idea of none of businesses being profitable.
    Keywords: Activos intangibles; valor razonable; empresa en funcionamiento; rentabilidad; problemas de información; mercado.
    JEL: M41 M19 B59 B41 D53 D01
    Date: 2007–02–12
    Abstract: This study examines the importance of different agents of change in the adoption of public sector accrual accounting. For this purpose, an accounting index is used and applied on a large sample of Flemish local governments to analyse the level of adoption of the altered accounting requirements. The impact of a number of prominent agents is empirically tested on the level of adoption in a cross-sectional way. The study draws on institutional theory to build a framework for analysis and uses additional interviews to interpret the findings. The research shows that the de facto implementation of the new accounting requirements is limited and strongly influenced by local management’s interest and the involvement of professional consultants. In the absence of a sound guidance and monitoring process, the skilful action of dedicated agents of change has become important to implement some far-reaching changes in the organisations’ accounting system.
    Date: 2007–01
  5. By: Kemal, M. Ali
    Abstract: Rise in the underground economy creates problems for the policy-makers to formulate economic policies, especially the monetary and fiscal policies. It is found that if there was no tax evasion, budgets balance might have been zero and positive for some years and we would not have needed to borrow as much as we had borrowed. It is concluded that the impact of the underground economy is significant to the movements of the formal economy, but the impact of formal economy is insignificant in explaining the movements in the underground economy. In the long run, underground economy and official economy are positively associated. It is estimated that the underground economy ranges between Rs 2.91 trillion and Rs 3.34 trillion (54.6 percent of GDP to 62.8 percent of GDP respectively) in 2005 and tax evasion ranges between Rs 302 billion and Rs 347 billion (5.7 percent of GDP to 6.5 percent of GDP respectively) in 2005. Underground economy and tax evasion were increasing very rapidly in the early 1980s but the rate of increase accelerated in the 1990s. It declined in 1999, but reverted to an increasing trend until 2003. It declined again in 2004 and 2005.
    Keywords: Underground Economy; Tax Evasion
    JEL: H26 E26
    Date: 2007
  6. By: Franklin Allen (Wharton School, University of Pennsylvania); Elena Carletti (Center for Financial Studies)
    Abstract: When liquidity plays an important role as in times of financial crisis, asset prices in some markets may reflect the amount of liquidity available in the market rather than the future earning power of the asset. Mark-to-market accounting is not a desirable way to assess the solvency of a financial institution in such circumstances. We show that a shock in the insurance sector can cause the current value of banks’ assets to be less than the current value of their liabilities so the banks are insolvent. In contrast, if historic cost accounting is used, banks are allowed to continue and can meet all their future liabilities. Mark-to-market accounting can thus lead to contagion where none would occur with historic cost accounting.
    Keywords: Mark-to-market, Historical Cost, Incomplete Markets
    JEL: G21 G22 M41
    Date: 2006–08–07

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