nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2007‒04‒14
four papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Does accounting for taxes on income provide information about tax planning performance? : Evidence from German multinationals By Overesch, Michael; Schreiber, Ulrich
  2. Transfer pricing of intrafirm sales as a profit shifting channel : evidence from German firm data By Overesch, Michael
  3. Financialisation of strategies, risk transfer, liquidity, property and control (In French) By Tristan AUVRAY (LEREPS-GRES); Gabriel COLLETIS (coord.) - (LEREPS-GRES); Stéphanie LAVIGNE (ESC Toulouse - LEREPS-GRES); Matthieu MONTALBAN (GREThA-GRES); François MORIN (LEREPS-GRES); Geoffroy RADURIAU (LEREPS-GRES)
  4. Social responsibility standards and global environmental accountability : a developing country perspective By Bhanu Murthy, K.V.

  1. By: Overesch, Michael; Schreiber, Ulrich
    Abstract: This paper investigates the quality of information on tax planning performance which is provided by financial accounting based on IAS 12 (Income taxes). A simple theoretical investment model is used to show that reported tax expenses can be misleading as an indicator of tax planning performance, since timing effects of tax depreciations are suppressed. However, it is shown that IAS 12 provides meaningful information if tax planning strategies are driven by statutory tax rate differences, e.g. in the case of profit shifting. Our empirical analysis of actual tax planning behaviour, based on a panel of German balance sheet data, suggests that in practice international tax planning is significantly driven by statutory tax rates. However, we find that tax depreciation impacts on the size of investment as well and thus, IAS 12 does not fully disclose tax planning performance.
    Keywords: International Taxation, Financial Accounting, Income Taxes, Firm-level Data
    Date: 2006
  2. By: Overesch, Michael
    Abstract: This paper investigates whether transfer pricing of intrafirm sales within multinationals represents an important channel of company tax planning. A simple theoretical model, considering profit shifting activities of a multinational company, is used to obtain empirical implications. The empirical analysis, based on a panel of German multinationals, considers directly the supposed tax response of intrafirm sales. The analysis shows a significantly negative impact of the local tax rate on the size of balance sheet items, which reflect intrafirm sales. Thus, the results suggest that transfer pricing of intrafirm sales constitutes an important channel of companies’ profit shifting activities.
    Keywords: Taxation, Multinationals, Profit Shifting, Transfer Pricing, Firm-level Data
    JEL: H25 H26 H32
    Date: 2006
    Abstract: The financialisation of strategies, as mentioned in the introduction, may be correlated with the dominant link between investment and funding. The principle of selection no longer seems to focus essentially on investment funding methods, but on investments themselves, according to a financial profitability criterion. The first part of the text deals with the question of “risk transfer”. The second part examines financialisation from the point of view of the principle of liquidity by emphasizing the importance of the assessment which markets exercise on the firms’ financial performance, but also on their industrial. The question of the link between property and control is dealt with in the third part of the text. It is explored in two phases: the link between structure and property rights on the one hand; the link between governance structure and resource allocation on the other hand. The general conclusion suggests placing the financial capital issue between science and magic. The conclusion is organized in two phases: the first phase means to emphasize three transverse dimensions of the financialisation process; the second phase proposes to put that process into a sequence going from the production of representations to the production of norms, to the question of the financialised firm’s model.
    Keywords: Financialisation, risks, evaluation, liquidity, control, governance, external growth, representations, (business) models, (accounting) standards
    JEL: G34 L22 L23 L24 M14 M49 M55
    Date: 2007
  4. By: Bhanu Murthy, K.V.
    Abstract: This paper argues that accountability, responsibility and governance go hand in hand. Evolving standards is a part of governance. Unless such a global perspective is adopted “Social Responsibility and the implications for Developing Countries”, which is the theme for this workshop, cannot be unraveled. The purpose of this paper is to highlight how Social Responsibility Standards and their relation to environmental sustainability cannot be addressed without relating it to Global Environmental Degradation, Global Environmental Accountability and Global Environmental Management. Also that there is a need to adopt the coercive connotation of accountability. It raises several issues in this context. The emphasis is on transorganizational development and the need for measurement. The limitations of evolving standards in this context are raised. It argues in favor of having differential standards. The main problem, for implementing differential standards is, however, that this would need a system of metrics that measures social dimensionalities and parameters. For this the new developments in environmental economics need to be incorporated into the framework of evolution of International Standards.
    Keywords: Global Environmental Accountability; Corporate Social Responsibility; International Standards.
    JEL: F01 M14 M41 Q56 F02
    Date: 2007–04–09

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