nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2009‒05‒23
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Challenges of international financial reporting standards (ifrs) in the islamic accounting world, case of middle eastern countries By Amged Abd El Razik
  2. Capital taxation during the U.S. Great Depression By Ellen R. McGrattan
  3. Why Pay Taxes When No One Else Does? By Epstein, Gil S.; Gang, Ira N.
  4. Firm-oriented policies, tax cheating and perverse outcomes By Francesco Busato; Bruno Chiarini; Pasquale De Angelis; Elisabetta Marzano
  5. Accrual Budgeting and Fiscal Policy By Marc Robinson

  1. By: Amged Abd El Razik (The Bucharest Academy of Economic Studies Bucharest)
    Abstract: This paper presents the case of representing the Middle Eastern countries on the International Accounting Standards Board (IASB).
    Keywords: International financial reporting standards (IFRS), IASB, MEC
    JEL: M41 H3 F5
    Date: 2009–05
  2. By: Ellen R. McGrattan
    Abstract: Previous studies quantifying the effects of increased capital taxation during the U.S. Great Depression find that its contribution is small, both in accounting for the downturn in the early 1930s and in accounting for the slow recovery after 1934. This paper confirms that the effects are small in the case of taxation of business profits, but finds large effects in the case of taxation of dividend income. Tax rates on dividends rose dramatically during the 1930s and, when fed into a general equilibrium model, imply significant declines in investment and equity values and nontrivial declines in gross domestic product (GDP) and hours of work. The results are amplified if businesses make intangible investments which can be expensed from taxable capital income.
    Date: 2009
  3. By: Epstein, Gil S. (Bar-Ilan University); Gang, Ira N. (Rutgers University)
    Abstract: In this paper we try to understand the phenomena whereby a large proportion of the population evades tax payments. We present a model which incorporates elements from the theory of information cascades with the standard model of tax evasion and analyze the connection between the decision of a potential tax evader, the number of tax evaders and the number caught in previous periods. General conditions exist under which any expected utility maximizing tax evaders will decide to emulate other tax evaders.
    Keywords: tax evasion, uncertainty, information cascades
    JEL: H26 H31 D82
    Date: 2009–04
  4. By: Francesco Busato; Bruno Chiarini; Pasquale De Angelis; Elisabetta Marzano (-; -; -; -)
    Abstract: This paper examines the implications of firm-oriented fiscal policies, namely investment subsidies and tax allowances, in an economy where producers may potentially avoid taxes. Among our results we stress the following. First, although investment subsidies induce increased capital accumulation (a level effect), they promote tax evasion; these subsidies induce firms to increase actual capital accumulation (a level effect), but also produce a reduction in the share of aggregate capital stock deployed in taxed, "official" production (a composition effect). Second, parameters characterizing the tax enforcement system play a major role in explaining tax evasion and firm size. Third, the technology structure matters for determining how to allocate resources between official and unofficial production.
    Keywords: State aid, tax exemptions, investment subsidies, tax evasion, unofficial underground production, investment
    JEL: E26 E22 H25 H26
    Date: 2008–08–31
  5. By: Marc Robinson
    Abstract: Can an accrual budgeting system-a system in which budgetary spending authorizations to line ministries are formulated in accrual terms-serve the needs of good fiscal policy? If so, how must such a system be designed? What are the practical challenges which may arise in implementing sound fiscal policy under a budgeting system which is significantly more complex than traditional cash budgeting? These are the primary questions addressed in this paper. Because any budgeting system must support the control of key fiscal policy aggregates, the paper also considers the case for reformulating fiscal policy in terms of accrual rather than cash aggregates. The primary focus is on the potential fiscal policy role of net lending and net financial debt. However, the paper also considers whether net worth is an aggregate with major fiscal policy relevance.
    Keywords: Accounting , Budgeting , Fiscal policy , Fiscal sustainability , Fiscal stability , Government expenditures , Asset management ,
    Date: 2009–04–22

This nep-acc issue is ©2009 by Alexander Harin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.