nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2009‒02‒22
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Financial Reporting in European NPOs: Is Now the Time for a Common Framework? By Travaglini, Claudio
  2. Effective Corporate Income Tax Burden in Croatia By Hrvoje Šimović
  3. Flat Tax Reform.The Baltics 2000 – 2007. By Helmuts Azacis; Max Gillman
  5. The short arm of the law: judicial institutions and local governance in Brazil By Stephan Litschig; Yves Zamboni

  1. By: Travaglini, Claudio (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)
    Abstract: The role of the nonprofit sector in the European Community is widely recognized by the Commission and European Parliament, which look to these organizations to promote the development and integration of EU citizens in activities relevant to the societies of member states. Recognizing the importance of these enterprises, European central bodies seek to promote growth through funding programs for training and professionalization and through communications that define the roles and the operations of these entities. This social economy or Third Sector is very heterogeneous, not only in the types of organizations and operations, but also in the types of relationships with civil society and especially in reporting and accounting practices (Jerger and Lapsley, 1998). The European Commission and Parliament have largely avoided issuing specific rules for financial reporting applicable to all players in the social economy. (Not-for-profit enterprises engaged in business, mainly cooperatives and social cooperatives, are covered in an indirect way by the Community directive in accounting.) A large area of doubt results, particularly concerning associations and foundations, which makes it difficult to gauge the results of these actors' contributions to the social economy. The gray area, paradoxically, covers just those types of entities that have become more pervasive within civil society and that are especially well positioned to promote integration among EU citizens. The enlargement of the Community to twenty-five nations, connected with the free movement of people and activities, raises to extraordinary importance the need for a framework for nonprofits to report accounting information and a model annual budget that are common to all European states. Developing a common framework requires an analysis of national accounting models, including the role of cultural factors (Doupnika and Riccio 2006). It is therefore vital to develop cultural and legislative analyses for those countries that have imposed accounting requirements on players in the Third Sector. Through these analyses, we may derive a path for the creation of a single accounting model. This article seeks to highlight possible areas of overlap in accounting models, through an analysis of accounting regulations applicable to not-for-profit organizations in the United Kingdom, Spain, and Italy.
    Keywords: Financial reporting; common framework; funding programs; communications
    JEL: A13
    Date: 2008–11–05
  2. By: Hrvoje Šimović (Faculty of Economics and Business, University of Zagreb)
    Abstract: This paper provides an analysis of corporate income tax (CIT) in Croatia. Given the fact that Croatia implements a consumption-based CIT and a number of tax incentives, the purpose of this paper is to establish the level of effective tax burden on companies in Croatia. In addition to analyzing the basic indicators of the CIT burden, the paper also presents a calculation of the effective tax rate based on the application of the Devereux-Griffith methodology. Apart from the cost of capital, the effective marginal tax rate (EMTR) and the effective average tax rate (EATR), also the EATR will be calculated for cases in which tax holidays are used.
    Keywords: Effective tax rates, corporate income tax, tax holidays, Croatia
    JEL: H25
    Date: 2009–02–17
  3. By: Helmuts Azacis (Cardiff Business School); Max Gillman (Cardiff Business School, Institute of Economics - Hungarian Academy of Sciences)
    Abstract: The paper presents an endogenous growth economy with a representation of the tax rate system in the Baltic countries. Assuming that government spending is a given fraction of output, the papershows how a flat tax system balanced between labor and corporate tax rates can be second best optimal. It then computes how actual Baltic tax reforms from 2000 to 2007 affect the growth rate and welfare, including transition dynamics. Comparing the actual reform effects to hypothetical tax experiments, it results that equal flat tax rates on personal and corporate income would have increased welfare in all three Baltic countries by 24% more on average than the actual reforms. This shows how equal, balanced, flat rate taxes can be optimal in both theory and practice. Further, movement towards a more equal balance between labor and capital tax rates, through changing just one tax rate, achieved almost as high or higher utility gains as in actual law for all three countries under both open and closed economy cases. This shows benefits of moving towards the optimum.
    Keywords: tax reform, endogenous growth, transitional dynamics, flat taxes
    JEL: E13 H20 O11 O14
    Date: 2008–12
  4. By: Fratini, Saverio M.
    Abstract: We consider a model of production with a continuum of linear techniques and examine the related choice of technique and shape of the demand for capital schedule. The primary conclusion regards the possibility of a decreasing demand for capital schedule combined with reswitching and reverse capital deepening.
    Keywords: Capital Theory; Linear Activities of Production; Theory of Value
    JEL: D46 B21 D33 D24
    Date: 2009
  5. By: Stephan Litschig; Yves Zamboni
    Abstract: This paper estimates the effect of judicial institutions on governance at the local level in Brazil. Our estimation strategy exploits a unique institutional feature of state judiciary branches which assigns prosecutors and judges to the most populous among contiguous counties forming a judiciary district. As a result of this assignment mechanism there are counties with nearly identical populations, some with and some without local judicial presence, which we exploit to impute counterfactual outcomes. Conditional on observable county characteristics, offenses per civil servant are about 35% lower in counties that have a local seat of the state judiciary. The lower incidence of infractions stems mostly from fewer violations of financial management regulations by local administrators, fewer instances of problems in project execution and project managment, fewer cases of non-existent or ineffective civil society oversight and fewer cases of improper handling of remittances to local residents.
    Keywords: Law enforcement, corruption, local governance, institutions
    JEL: H75 K42 M42
    Date: 2008–05

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