nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2007‒07‒07
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. An Examination of Actual Fraud Cases With a Focus on the Auditor’s Responsibility By Holm, Claus; Langsted, Lars Bo; Seehausen, Jesper
  2. Accounting: A General Commentary on an Empirical Science By Salvary, Stanley C. W.
  3. Empirical Study on Costs and Incomes of Organic Farming By Josep Maria Argiles Bosch
  4. Causes and Consequences of Tax Morale: An Empirical Investigation By Benno Torgler; Markus Schaffner
  5. How Tax Progression Affects Effort and Employment By Erkki Koskela; Ronnie Schöb

  1. By: Holm, Claus (Department of Business Studies, Aarhus School of Business); Langsted, Lars Bo (Department of Business Studies); Seehausen, Jesper (Department of Business Studies)
    Abstract: The purpose of this paper is to contribute to an understanding of the intricate relationship between <p> audit regulation and developments in audit practice in relation to the fraud issue. The extent and exact nature of the responsibilities of the auditor to detect fraud in relation to audit engagements has been widely discussed over the years. In this paper we classify actual cases, where the responsibilities of auditors have been established by the court system and/or by the auditors own professional organizations in Denmark. The dataset includes all publicized cases raised against Danish auditors within the time period 1909-2006. The information provided in the cases provides a basis for identifying the actual responsibilities pertaining to fraud during the audit. The overall finding of the historical analysis is that the responsibilities of the auditor in relation to fraud should be interpreted not as a group of its own, but in line with the development of what constitutes a good audit in general.
    Keywords: Fraud; auditor responsibility; intentional misstatements; misappropriation; fraudulent reporting; embezzlement;
    Date: 2007–05–18
  2. By: Salvary, Stanley C. W.
    Abstract: Many researchers have questioned the view of accounting as a science. Some maintain that it is a service activity rather than a science, yet others entertain the view that it is an art or merely a technology. While it is true that accounting provides a service and is a technology (a methodology for recording and reporting), that fact does not prevent accounting from being a science. Based upon the structure and knowledge base of the discipline, this paper presents the case for accounting as an empirical science.
    Keywords: national accounting and organizational accounting; risk-sharing arrangements; management of time and other resources; monetization of the economy; command over goods and services; extrinsic value and intrinsic value; commodity money and paper/nominal money; money in relation to credit; the firm and long range planning; market value versus committed finance; explanation and prediction; expectations and uncertainty.
    JEL: M41
    Date: 2007–06–28
  3. By: Josep Maria Argiles Bosch (Universitat de Barcelona)
    Abstract: This paper conducts an empirical study on output, costs and incomes in organic farming with a sample of Spanish firms. Financial accounting data reveals that organic and partly or transitional to organic farming do not get significantly different output than intensive farming. Farms in transition to organic farming bear significantly higher costs and obtain significantly lower income than intensive farming. Costs were recalculated incorporating opportunity costs of family work. Organic and transitional farming displayed significantly higher costs and lower relative income. However, organic farming plays a social role generating more employment than intensive farming and avoiding environmental and health damages. The article recalls for the necessity for accounting to broaden its scope and contents. It should disclose social and environmental data, as well as transactions that are not marketed, registered or valued but yield social profits and costs.
    Keywords: transition to organic farming., organic farming, environmental accounting
    JEL: M10 M40 M41
    Date: 2007
  4. By: Benno Torgler; Markus Schaffner
    Abstract: Many taxpayers truthfully declare their income to the tax administration. Why? In this paper we have found a significant correlation between tax morale and tax evasion, controlling a variety of factors. Furthermore we have analysed tax morale as dependent variable and studied the determinants that shape it. The results indicate that factors such as the tax administration, tax system, tax awareness, compliance perceptions, trust in officials and others, and the willingness to obey have a relatively strong impact on tax morale.
    Keywords: tax morale, tax compliance, tax evasion, tax system, tax administration, social capital
    JEL: H26
    Date: 2007–07–01
  5. By: Erkki Koskela (University of Helsinki and IZA); Ronnie Schöb (Free University of Berlin)
    Abstract: Within an efficiency wage framework, we study the effects of two revenue-neutral tax reforms that change the progressivity of the labour tax system. A revenue-neutral increase in both the wage tax and tax exemption and a revenue-neutral change in the composition of labour taxation towards the tax with the smaller tax base will lead to the same results: they moderate wages, workers’ effort, effective labour input and aggregate output. Whether employment rises or falls, however, depends in both reforms on the magnitude of the prereform total tax wedge. The larger this tax wedge is, the more negative is the impact of reforms on workers’ effort. A larger total tax wedge increases the negative effect of tax progression on labour productivity and thus thwarts the positive employment effect of wage moderation.
    Keywords: efficiency wages, tax progression, structure of labour taxation
    JEL: H22 J41 J48
    Date: 2007–06

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