nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2008‒09‒13
three papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Accounting for Defined Benefit Plans: An International Comparison of Exchange-Listed Companies By Clara Severinson
  2. Managerial Ownership and Accounting Conservatism: Empirical Evidence from Japan By Akinobu Shuto; Tomomi Takada
  3. The Impact of a Carbon Tax on Economic Growth and Carbon Dioxide Emissions in Ireland By Thomas Conefrey; John Fitz Gerald; Laura Malaguzzi Valeri; Richard S. J. Tol

  1. By: Clara Severinson
    Abstract: Defined benefit pension plans can entail one of the biggest liabilities that an exchange-listed company has on its balance-sheet. There exist comprehensive requirements for the reporting of such liabilities. This paper examines the impact that defined benefit pension plans had on the financial results of exchange-listed companies in 2007. This impact has been compared and analysed at the aggregated country level, as well as in more detail for some specific companies that sponsor large defined benefit pension plans. <P>Comptabilité des regimes de retraite à prestations définies : Une comparaison internationale de sociétés cotées <BR>Les plans de retraite à prestations définies peuvent entrainer une des dettes les plus importantes qu'une société cotée puisse inscrire à son bilan. Il existe des conditions requises détaillées afin de comptabiliser de tels engagements. Ce document examine l'impact de ces plans de retraite à prestations définies sur les résultats financiers des sociétés cotée en 2007. Cet impact est comparé et analysé au niveau agrégé du pays ainsi qu’à un niveau plus détaillé pour quelques société qui commanditent des plans de retraite à prestations définies de grande taille.
    Keywords: pension fund, fond de pension, defined benefit pension plans., IAS 19, FAS 87, projected benefit obligation, defined benefit obligation, PBO, DBO, pension accounting, pension plan assets, plans de retraite à prestations définies, IAS 19, FAS87, valeur actuelle probable des droits acquis, droits acquis des régimes à prestations définies, PBO, DBO, comptabilité des régimes de retraite, actifs des systèmes de retraite
    JEL: G23 G32 M41 M52
    Date: 2008–08
  2. By: Akinobu Shuto (Research Institute for Economics and Business Administration, Kobe University); Tomomi Takada (Graduate School of Business Administration, Kobe University)
    Abstract: We examine the effect of managerial ownership on the demand for accounting conservatism as measured by the asymmetric timeliness of earnings (Basu, 1997). The separation of ownership and control as reflected by the levels of managerial ownership induce two agency problems between managers and shareholders: the incentive alignment effect and the management entrenchment effect. Since accounting conservatism is expected to mitigate agency problems between managers and shareholders, we predict that these agency problems increase the demand for accounting conservatism. We empirically test the relationship between managerial ownership and the asymmetric timeliness of earnings using a cubic form model for Japanese firms. We find that within the low and high levels of managerial ownership, managerial ownership is significantly negatively related to the asymmetric timeliness of earnings, which is consistent with the implication of the incentive alignment effect. We also find a significant positive relationship between managerial ownership and the asymmetric timeliness of earnings for the intermediate levels of managerial ownership, as suggested by the management entrenchment effect. Our results hold after controlling the market-to-book ratio, leverage, firm size, and year. These evidences support our prediction and suggest the possibility that accounting conservatism contributes to addressing the agency problem between managers and shareholders.
    Keywords: Managerial ownership; accounting conservatism; alignment effect; entrenchment effect
    JEL: M41 G32
    Date: 2008–08
  3. By: Thomas Conefrey (Economic and Social Research Institute (ESRI)); John Fitz Gerald (Economic and Social Research Institute (ESRI)); Laura Malaguzzi Valeri (Economic and Social Research Institute (ESRI)); Richard S. J. Tol (Economic and Social Research Institute (ESRI))
    Abstract: This paper analyses the medium-term effects of a carbon tax on growth and CO2 emissions in Ireland, a small open economy. We find that a double dividend exists if the carbon tax revenue is recycled through reduced income taxes. If the revenue is recycled by giving a lump-sum transfer to households, a double dividend is unlikely. We also determine that a greater incidence of the carbon tax falls on capital than on labour. When combined with a decrease in income tax, there is a clear shift of the tax burden from labour to capital. Finally, most of the effect on the economy is due to changes in the competitiveness of the manufacturing and market services sectors. These results hold even if we allow changes in energy prices to have an enhanced (detrimental) effect on Ireland’s competitiveness.
    Keywords: carbon tax; Ireland; double dividend; tax incidence
    JEL: H23 Q54
    Date: 2008–08

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