nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2008‒10‒07
three papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Financial-Accounting Settlements Applying in 2008 By Antonescu, Mihai; Antonescu, Ligia
  2. Splitting Up Value: A Critical Review of Residual Income Theories By Carlo Alberto, Magni
  3. Optimal taxation, social contract and the four worlds of welfare capitalism By Amedeo Spadaro

  1. By: Antonescu, Mihai; Antonescu, Ligia
    Abstract: As a result of the adhesion of our country to the European Union, the adaptation of the EC financial-accounting legislation has emerged as a necessity, new settlements starting to apply with the beginning of the financial exercise 2006. The improvement of the Romanian accounting system has as a main objective the harmonization of the national legislation with the European directives in the domain, in order to accomplish and answer the requests of the European Union, as well as to align itself to the International Accounting Standards, a situation imposed by the process of economic globalization and by the development of the capital market. The improvement of the accounting activity manifests itself especially by the efforts to insure a common framework, approved at international level, to draw up and present financial reports, by which to offer relevant and credible information to shareholders, to potential investors, to employees, clients, suppliers as well as to other commercial, governmental or institutional beneficiaries as well as to other users interested in the financial-accounting information at the level of economic operator. An essential objective is represented by the perfecting of the business environment, within the framework of which the accounting and financial audit system has a main position, insuring correct information, rigorously obtained, on the basis of international standards and certified as a result of the audit processes with a view to the normal unfolding of economic activities in all the sectors of the national economy.
    Keywords: financial – accounting legislation; expenses; annual financial reports; financial exercise
    JEL: M41 F36
    Date: 2008–06–17
  2. By: Carlo Alberto, Magni
    Abstract: This paper deals with the notion of residual income, which may be defined as the surplus profit that residues after a capital charge (opportunity cost) has been covered. While the origins of the notion trace back to the 19th century, in-depth theoretical investigations and widespread real-life applications are relatively recent and concern an interdisciplinary field connecting management accounting, corporate finance and financial mathematics (Peasnell, 1981, 1982; Peccati, 1987, 1989, 1991; Stewart, 1991; Ohlson, 1995; Arnold and Davies, 2000; Young and O'Byrne, 2001; Martin, Petty and Rich, 2003). This paper presents both a historical outline of its birth and development and an overview of the main recent contributions regarding capital budgeting decisions, production and sales decisions, implementation of optimal portfolios, forecasts of asset prices and calculation of intrinsic values. A most recent theory, the systemic-value-added approach (also named lost-capital paradigm), provides a dierent denition of residual income, consistent with arbitrage theory. En- folded in Keynes's (1936) notion of user cost and forerun by Pressacco and Stucchi (1997), the theory has been formally introduced in Magni (2000a,b,c; 2001a,b; 2003), where its properties are thoroughly investigated as well as its relations with the standard theory; two different lost-capital metrics have been considered, for value-based management purposes, by Drukarczyk and Schueler (2000) and Young and O'Byrne (2001). This work illustrates the main properties of the two theories and their relations, and provides a minimal guide to construction of performance metrics in the two approaches.
    Keywords: Finance, accounting, residual income, excess profit, net present value, opportunity cost, counterfactual, performance measurement, management
    JEL: D46 G11 G12 M41 G31 G3 M21
    Date: 2008–09–11
  3. By: Amedeo Spadaro (Paris School of Economics (Paris) and Universitat de les Illes Balears (Palma de Mallorca))
    Abstract: Drawing from the formal setting of the optimal tax theory (Mirrlees 1971), the paper identifies the level of Rawlsianism of some European social planners starting from the observation of real data and redistribution systems and uses it to build a metric that allows measuring the degree of (dis)similarity of the redistribution systems analyzed. It must be considered as a contribution to the comparative research on the structure and typology of the Welfare State. In particular we consider the optimal taxation model that combines both intensive and extensive margins of labor supply, as suggested by Saez (2002) in order to assess the degree of decommodification of seven European welfare systems. We recover the shape of the social welfare function implicit in tax-benefit systems by inverting the model on actual effective tax rates, as if existing systems were optimal according to some Mirrleesian social planner. Actual distributions of incomes before and after redistribution are obtained using a pan-European tax-benefit microsimulation model. Results are discussed in the light of standard classifications of welfare regimes in Europe. There appears to be a clear coincidence of high decommodification willingness and high Rawlsianism in the Scandinavian, social-democratically influenced welfare states (Denmark). There is an equally clear coincidence of low decommodification willingness and utilitarianism in the Anglo–Saxon liberal model (UK) and in the Southern European welfare states (Italy and Spain). Finally, the Continental European countries (Finland, Germany and France) group closely together in the middle of the scale, as corporatist and etatist.
    Keywords: Optimal income taxation, tax-benefit policy, microsimulation, comparative social policy analysis, welfare state models.
    JEL: H11 H21 D63 C63
    Date: 2008

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