nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2008‒03‒01
four papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Fundamentals of Functional Business Valuation - Russian Version (Later Version of 4610) By Matschke, Manfred Jürgen; Brösel, Gerrit
  2. Differences in Social Preferences - Profitable for the Firm? By Küpper, Hans-Ulrich; Sandner, Kai
  3. The Effects of Concentration on Competition and Efficiency : Some Evidence from the French Audit Market By Géraldine Broye; Laurent Weill
  4. Assessment of income distribution and a hypothetical flat tax reform in Hungary By Lelkes, Orsolya; Benedek, Dora

  1. By: Matschke, Manfred Jürgen; Brösel, Gerrit
    Abstract: After a brief overview of different company valuation theories, this paper presents the main functions (decision, arbitration, and argument or negotiation function) of company valuation according to the functional (i.e. purpose-oriented) theory. The main body of the paper focusses on the decision function and shows how the decision value can be derived as a subjective limit value that different economic agents assign to the company. Finally, the differences between the functional and the market value oriented theory of company valuation are discussed.
    Keywords: Unternehmensbewertung; business valuation; decision function; decision Value; subjective limit value; оценкa предприятий; предельная цена
    JEL: G34 M4
    Date: 2008–02
  2. By: Küpper, Hans-Ulrich; Sandner, Kai
    Abstract: This paper analyzes the impact of heterogeneous (social) preferences on the weighing and the combination of performance measures as well as on firm profitability. We consider rivalry, egoism and altruism as extreme forms within the continuum of possible preferences and show, that the principal normally can exploit both altruistic as well as rivalistic behavior of his agents. Firm profits reach their maximum value, if the agents differentiate as much as possible in their individual characteristics. We provide further insights that in order to realize these gains in profitability, reallocations of participations in performance measures are necessary, where competitive agents have to be privileged compared to altruistic agents. In this context, stochastic interdependencies are of importance since they yield overlapping functions of the share parameters causing additional adaptions in the optimal design of the wage compensation system.
    Keywords: Social Preferences; Rivalry; Altruism; Egoism; Team Composition; Performance Measurement
    JEL: D23 D82 D86 M41 M52
    Date: 2008–02–21
  3. By: Géraldine Broye; Laurent Weill (Laboratoire de Recherche en Gestion et Economie, Institut d'Etudes Politiques, Strasbourg)
    Abstract: This paper aims at investigating the effects of concentration on competition and cost efficiency of the French audit market. Competition is measured with the Rosse-Panzar model, while cost efficiency is estimated with stochastic frontier approach. Cost efficiency levels are estimated at around 75% with greater efficiency for Big-Four firms, while the nature of competition appears to be monopolistic competition. Dynamic analysis shows a reduction in competition, and a decrease in cost efficiency for Big-Four and non-Big-Four firms between 1999 and 2003. We therefore provide support to a negative impact of concentration on competition and cost efficiency.
    Keywords: Auditing, audit market, competition, efficiency.
    JEL: L1 M4
    Date: 2008
  4. By: Lelkes, Orsolya; Benedek, Dora
    Abstract: The paper presents evidence on the effects of taxes and benefits on household incomes in Hungary referring to the 2006 system and a hypothetical flat tax reform. For this, a microsimulation model is used, which is based on a matched sample of an income and a consumption survey and administrative tax records. The Hungarian budget receives more revenues from VAT than from PIT. This has major implications on equity, as while PIT is progressive, VAT is regressive, imposing a higher tax burden on low-income households. We highlight the importance of tax allowances. The absolute amount of total tax allowances tends to increase with income, and the share of allowances within total incomes is around 5-7% in all income groups, except the top fifth, where it declines. Targeting is thus inadequate, and it is especially so in case of child support. Family tax allowance reaches the bottom decile only to a limited extent. This is in sharp contrast with the universal child benefit, which is well targeted to the poorest. The second part explores the likely impact of the introduction of a flat tax, where VAT and PIT rates are set at 20%, and a tax free bracket for low incomes is kept. We show that a budget neutral solution would have a largely regressive effect, where 70% of the population would lose, with a minority on the top of the distribution gaining.
    Keywords: Tax-benefit microsimulation; redistribution; flat tax reform; Hungary
    JEL: D31 I38 C80
    Date: 2007–07–15

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