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on Accounting and Auditing |
| By: | Ojo, Marianne |
| Abstract: | This paper consolidates the work of its predecessor, “International Framework for Liquidity Risk Measurement, Standards and Monitoring: Corporate Governance and Internal Controls”, by considering monitoring tools which are considered to be essential if risks,(and in particular liquidity risks which are attributed to a bank), are to be managed and measured effectively by its management. It also considers developments which have triggered the need for particular monitoring tools – not only in relation to liquidity risks, but also to the rise of conglomerates and consolidated undertakings. It highlights weaknesses in financial supervision – weaknesses which were revealed following the collapses of Barings and Lehman Brothers. As well as attempting to draw comparisons between the recommendations which were made by the Board of Banking Supervision (BoBS) following Barings’ collapse, and the application issues raised by the Basel Committee in its 2009 Consultative Document, International Framework for Liquidity Risk Measurement, Standards and Monitoring, it highlights the links and relevance between both recommendations. In drawing attention to the significance of corporate governance, audit committees, and supervisory boards, the importance of effective communication between management at all levels, to ensure transmission and communication of timely, accurate and complete information, is also highlighted. Through a comparative analysis of two contrasting corporate governance systems, namely, Germany and the UK, it analyses and evaluates how the design of corporate governance systems could influence transparency, disclosure, as well as higher levels of monitoring and accountability. Whilst highlighting the need for, and the growing importance of formal risk assessment models, the paper also emphasises the dangers inherent in formalism – as illustrated by a rules based approach to regulation. It will however, demonstrate that detailed rules could still operate within a system of principles based regulation – whilst enabling a consideration of the substance of the transactions which are involved. In addressing the issues raised by principles based regulation, the extent to which such issues can be resolved, to a large extent, depends on adequate compliance with Basel Core Principle 17 (for effective banking supervision) – and particularly on the implementation, design and compliance with “clear arrangements for delegating authority and responsibility.” |
| Keywords: | liquidity; principles based regulation; risks; corporate governance; audit; creative compliance |
| JEL: | K2 G3 M42 G21 |
| Date: | 2010–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22125&r=acc |
| By: | Wiberg, Magnus (Ministry of finance) |
| Abstract: | This paper analyzes the effects of different corporate tax systems on the location of industry within an economic geography model with regional size asymmetries. Both the North and the South gain industry by adopting a tax regime that produces the lowest tax level. As the share of expenditures in the North increases, the Nash equilibrium has this region setting regressive taxes, while the South introduces progressive taxation. The unilateral welfare-maximizing tax structure in the North (South) is the regressive (progressive) system when expenditures in the North increase. Welfare in the North (South) is however maximized if both regions set regressive (progressive) taxes, while regressive (progressive) taxation in both regions represents a joint welfare maximizing outcome if the economic size of the North is higher (lower) than a certain threshold value. As trade is liberalized, the equilibrium tax regime adopted depends on how pro ts respond to lower trade costs. Proportional taxation is never an equilibrium, neither as regional spending changes, nor as trade is liberalized. |
| Keywords: | Economic Geography; Tax Systems; Corporate Taxation |
| JEL: | F12 H25 R12 |
| Date: | 2010–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2010_0006&r=acc |
| By: | Andr s Simonovts (Institute of Economics - Hungarian Academy of Sciences) |
| Abstract: | We analyze the impact of tax morality on progressive income (wage) taxation. We assume that transfers (cash-back) and public expenditures are financed from linear wage taxes. We derive the reported wages from individual utility maximization, when individuals obtain partial satisfaction from reporting wages (depending on their tax morality), and cannot be excluded from the use of public services. The government maximizes a utilitarian social welfare function, also taking into account the utility of public services. The major conjecture is illustrated by numerical examples: the optimal degree of redistribution and the size of the public services are increasing functions of the individuals' tax morality. |
| Keywords: | tax moral, reporting earnings, progressive income tax, welfare economics |
| JEL: | H55 D91 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1005&r=acc |
| By: | Furceri, Davide; Karras, Georgios |
| Abstract: | This paper investigates the cyclical properties of the average effective tax rate in 26 OECD countries over 1965-2003 in order to test the validity of three theories of fiscal policy: (i) the standard Keynesian theory which recommends that tax policy should be counter-cyclical, (ii) the Tax Smoothing hypothesis, which implies that changes in GDP should be uncorrelated with tax rates, and (iii) the positive theory of Battaglini and Coate (2008) which predicts that the average tax rate should be negatively correlated with GDP. Our main finding is that the correlations of tax rates with cyclical GDP are generally quite small and statistically indistinguishable from zero. This finding is quite robust and is more consistent with the implications of the Tax Smoothing hypothesis than either the recommendations of the standard Keynesian model or the predictions of Battaglini and Coate’s theory. |
| Keywords: | Fiscal Policy; Tax Rates; Business Cycle |
| JEL: | E62 E32 |
| Date: | 2010–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22208&r=acc |
| By: | Andrew Hughes Hallett; Drew Scott |
| Keywords: | Tax and Expenditure Devolution, Inter-Government Relations, Fiscal Federalism, State Budget, Fiscal Coordination. |
| JEL: | H71 H74 P43 E61 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:san:cdmawp:1009&r=acc |