nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2008‒08‒06
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. An Institutional Analysis of Cost Accounting Practices in the Spanish Eighteenth Century By Carlos Larrinaga-González; Miriam Núñez-Torrado; Fernando Gutiérrez-Hidalgo
  2. The Effect of Perfect Monitoring of Matched Income on Sales Tax Compliance: An Experimental Investigation By Cathleen Johnson; David Masclet; Claude Montmarquette
  3. How does a domestic tax reform effect protection against imports? The case of the Republic of Madagascar By Jean-Jacques Hallaert
  4. Resolving a Large Contingent Fiscal Liability: Eastern Europe Experience By Mark J Flanagan
  5. Simulating the impact of inflation on the progressivity of personal income tax in Brazil By Horacio Levy; José Ricardo Nogueira; Rozane Bezerra de Siqueira; Herwig Immervoll; Cathal O’Donoghue

  1. By: Carlos Larrinaga-González (Department of Business Administration, Universidad de Burgos.); Miriam Núñez-Torrado (Department of Accounting, Universidad de Sevilla.); Fernando Gutiérrez-Hidalgo (Department of Business Administration, Universidad Pablo de Olavide)
    Abstract: A growing body of literature (Johnson, 1972; Tyson, 1990; Fleischman and Parker, 1990 and 1991; Edwards and Newell, 1991 and Fleischman et al., 1996) has evidenced that sophisticated costing techniques were used in the early stages of the Industrial Revolution for efficiency reasons. However, some scholars have questioned the role of efficiency (Hoskin and Macve, 1988; Miller, 1994, Carmona et al., 1997, 1998 and 2002 and Gutiérrez et al., 2005) and have suggested institutional explanations for the development of cost accounting. The purpose of this research is to extend this institutional explanation of accounting spreading in the second half of the 18th century, Enlightenment Century Spain. With this aim, this work explores the changes that took place in six organizations depended of the Crown. The study reveals the importance of the role played by a group of managers belonging to the Spanish Enlightenment Movement.
    Keywords: Institutional Analysis, Cost Accounting, Spanish Eighteenth Century.
    Date: 2008–07
  2. By: Cathleen Johnson; David Masclet; Claude Montmarquette
    Abstract: Noncompliance is a quantitatively important phenomenon that affects significantly revenue source for state governments. This phenomenon raises challenging questions about the determinants of tax reporting and also about the appropriate design of a tax system: how many resources should be devoted to auditing? This paper provides specific empirical insights using an experimental approach to measure the effects of systematic sales tax monitoring and the determinants of sales tax compliance. The results indicate that if perfect monitoring is instituted without other complementary policies, an increase in tax revenues is not the likely outcome. A successful policy aiming at reducing fiscal fraud might be a difficult task, once people have decided their equilibrium level of tax compliance. The reference-dependent effect observed in the data suggests that individuals will try to recover their losses following any policy changes even if it means taking more risks. <P>Les revenus de plusieurs niveaux de gouvernements sont significativement altérés par la fraude fiscale. Découvrir les déterminants de la fraude fiscale est un défi important alors que ce phénomène pose en même temps la question du design du système de taxation. Combien de ressources devons-nous, par exemple, consacrer à l’audit? Cette recherche mobilisant l’économie expérimentale offre une analyse empirique sur les effets d’assurer systématiquement le contrôle de la taxe de vente et d’étudier les déterminants de s’acquitter du paiement de ce type de taxes. Les résultats indiquent que le contrôle parfait de la taxe de vente sans politiques complémentaires n’augmentent pas nécessairement les rentrées fiscales. Une politique efficace pour réduire la fraude fiscale s’avère une tâche difficile si les agents impliqués ont décidé d’un niveau d’équilibre de conformité dans le paiement de leurs taxes. Les données montrent que les participants tendent à recouvrer leurs pertes suite à un changement de politique fiscale même s’ils doivent prendre plus de risques pour y arriver.
    Keywords: sales tax, perfect monitoring, experimental economics, reference-dependent effect., taxe de vente, fraude fiscale, économie expérimentale, politiques d’audit.
    Date: 2008–07–01
  3. By: Jean-Jacques Hallaert
    Abstract: In 2008, Madagascar reformed its domestic tax system. Because the excise duties and VAT regimes were reformed, the taxation of imports has changed. This paper quantifies how the reform changes the protection against imports and the fiscal revenues from taxation of imports. It shows that, even if the reform has only a limited impact on the average rate of protection, it substantially alters the structure of protection across goods. Moreover, because the reform further increases the already high rate of taxation of imports, it will also boost revenue from taxes on imports and reduce the fiscal losses from the SADC FTA.
    Keywords: Working Paper , Madagascar , Tax reforms , Imports , Excise taxes , Value added tax , Tax policy , Trade policy ,
    Date: 2008–06–23
  4. By: Mark J Flanagan
    Abstract: On occasion, a government may find itself confronted with a need to address a large contingent or off balance sheet fiscal liability. Implementing a settlement raises issues of fiscal sustainability and macroeconomic stability. This paper surveys the key design issues, and draws lessons from recent Eastern European experience. It then considers in more detail the particular case of Ukraine, and how it might approach its own large contingent liability-the so-called lost savings-which at end-2007 amounted to as much as 18 percent of GDP.
    Keywords: Eastern Europe , Balance of payments deficits , Budget deficits , Fiscal sustainability , Debt management , Fiscal stability , Ukraine ,
    Date: 2008–07–02
  5. By: Horacio Levy (ISER University of Essex, Colchester and ECV, Vienna); José Ricardo Nogueira (Universidade Federal de Pernambuco, Recife); Rozane Bezerra de Siqueira (Universidade Federal de Pernambuco, Recife); Herwig Immervoll (OECD, Paris, ECV, Vienna, ISER University of Essex, Colchester and IZA, Bonn); Cathal O’Donoghue (National University of Ireland, Galway and IZA, Bonn)
    Abstract: Income tax reform proposals in Brazil have focused almost exclusively on changes in rates, aiming at increasing its progressivity. One important aspect that has been overlooked is the fact that, in the absence of a mechanism that adjusts the tax rules to price movements, the effects of inflation on the level and distribution of the income tax burden can be substantial, even in periods of low inflation (“bracket creep”, fiscal drag). Moreover, how inflation affects the progressivity of the income tax depends on the specifics of the tax structure. Making use of a tax-benefit microsimulation model for Brazil (BRAHMS), we simulate different scenarios regarding the level of inflation and the adjustment of the income tax rules in order to assess the potential revenue and distributive effects of inflation on the income tax in Brazil. Our findings suggest that the Brazilian income tax is quite sensitive to fiscal drag. If the income tax is not adjusted for inflation, progressivity would decrease but redistribution would increase due to a larger tax burden. However, as income tax revenue and redistribution are quite low, even after relatively high levels of inflation, the tax burden and income inequality would not substantially change.
    Keywords: income tax, inflation, Brazil, fiscal drag
    Date: 2008–03

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