nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2014‒08‒09
eight papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Addressing the Debt Bias: A Comparison between the Belgian and the Italian ACE Systems By Ernesto Zangari
  2. Effective Corporate Taxation, Tax Incidence and Tax Reforms: Evidence from OECD Countries By Salvador Barrios; Gaetan Nicodeme; Antonio Jesus Sanchez Fuentes
  3. Taxation trends in the European Union: 2014 edition By European Commission
  4. Incomplete VAT rebates to exporters : how do they affect China's export performance? By Gourdon, Julien; Monjon, Stéphanie; Poncet, Sandra
  5. Alternative Approaches to Commercial Property Price Indexes for Tokyo By Diewert, Erwin; Shimizu, Chihiro
  6. The Impact of Leased and Rented Assets on Industry Productivity Measurement By Wang, Weimin; Moussaly, Karim
  7. Analyse des comportements adaptifs des auditeurs financiers en France By Gaddour, Inès
  8. The Euro Plus Pact: Cost Competitiveness and External Capital Flows in the EU Countries By Hubert Gabrisch; Karsten Staehr

  1. By: Ernesto Zangari (European Commission)
    Abstract: This paper reviews the experiences of Belgium and Italy with ACE-type systems of corporate taxation. The comparison focusses on the definition of the base for the computation of the allowance and the anti-avoidance framework to tackle abuses. It is argued that the Italian system, with its incremental feature and a comprehensive anti-avoidance framework targeting transactions between related parties, seems a more viable solution for an ACE reform aimed at addressing the debt bias in the corporate sector.
    Keywords: Allowance for Corporate Equity; Capital structure; Taxation; Italy; Belgium
    JEL: G32 H25
    Date: 2014–07
  2. By: Salvador Barrios (Joint Research Center of the European Commission); Gaetan Nicodeme (European Commission); Antonio Jesus Sanchez Fuentes (Universidad Complutense Madrid)
    Abstract: The present study provides estimates of the Effective Marginal Tax Rates (EMTRs) for a sample of 17 OECD countries and 11 manufacturing sectors in a single framework encompassing capital, labour and energy taxes. Our cross-country/cross-sector approach allows us comparing the incentives provided by the tax systems and gauging the effects of tax changes taking explicitly into account the possible substitution between factors as well as their tax incidence. Our results suggest that the OECD tax systems provide different incentives for manufacturing activity across countries and that tax systems are relatively neutral with respect to the sectoral composition of manufacturing activities. The impact of potential tax increases on firms´ activity is found to be most attenuated when shifted towards consumers and/or employees rather than energy consumption and/or capital investors. These results are robust to alternative hypotheses regarding the tax incidence parameters, elasticity of substitution between factors and mark-up on final prices. In addition, policy strategies favouring tax increases on energy consumption and lowering taxes on labour can substantially reduce the EMTRs and thus yield substantial efficiency gains for firms. These reforms should in some instances be ambitious enough to produce desired effects on firms’ EMTRs, however.
    Keywords: Taxation; Tax incidence; Effective Taxation
    JEL: H20 H22 H24 H25
    Date: 2014–07
  3. By: European Commission
    Abstract: This report contains a detailed statistical and economic analysis of the tax systems of the Member States of the European Union, plus Iceland and Norway, which are Members of the European Economic Area. The data are presented within a unified statistical framework (the ESA95 harmonised system of national and regional accounts), which makes it possible to assess the heterogeneous national tax systems on a fully comparable basis.
    Keywords: European Union, taxation
    JEL: H23 H24 H25 H27 H71
    Date: 2014–07
  4. By: Gourdon, Julien; Monjon, Stéphanie; Poncet, Sandra
    Abstract: During the last decade, the Chinese government has frequently changed the value added tax (VAT) refund levels offered to exporters. Indeed, China’s VAT system is not neutral, in particular because the exporters may not receive complete refund of the domestic VAT paid on their inputs. This paper investigates how changes in the VAT rebates affect export performance in China. Our empirical analysis relies on export volume data at the HS6 product level over the 2003-12 period. To address potential endogeneity, we exploit an eligibility rule that disqualifies processing trade with supplied materials from the rebates. We find that the adjustments to the VAT rebates have signifi cant repercussions on the exported volume: a one percentage point increase in the VAT rebate can lead to a 7% increase in export volumes. This magnitude allows to better understand the strong resistance of China’s exports amid the global recession.
    Keywords: VAT system; Export tax; Export performance; China;
    JEL: F10 F14 O14
    Date: 2014–02
  5. By: Diewert, Erwin; Shimizu, Chihiro
    Abstract: The paper studies the problems associated with the construction of price indexes for commercial properties that could be used in the System of National Accounts. Property price indexes are required for the stocks of commercial properties in the Balance Sheets of the country and related price indexes for the land and structure components of a commercial property are required in the Balance Sheet accounts of the country for the calculation of the Multifactor Productivity of the Commercial Property Industry. The paper uses a variant of the builder’s model that has been used to construct Residential Property Price Indexes. Geometric depreciation rates are estimated for commercial offices in Tokyo using assessment data for REITs. The problems associated with the decomposition of asset value into land and structure components are addressed. The problems associated with depreciating capital expenditures on buildings and with measuring the loss of asset value due to early retirement of the structure are also addressed.
    Keywords: Commercial property price indexes, System of National Accounts, Balance Sheets, methods of depreciation, land and structure price indexes, demolition
    JEL: C2 C23 C43 D12 E31 R21
    Date: 2014–07–14
  6. By: Wang, Weimin; Moussaly, Karim
    Abstract: Leasing is an important means of gaining access to assets, of obtaining finance, and of reducing a lessee?s exposure to the risks inherent to asset ownership. A lease can be either a financial lease (capital lease) or an operating lease (capital rental). A financial lease is one where the legal owner of an asset (lessor) passes the economic ownership to the user of the asset (lessee), who then accepts the operating risks and receives the economic benefits from using the asset in a productive activity. Under an operating lease, the lessor is both the legal owner and the economic owner of the asset leased (rented), bearing the operating risks and receiving the economic benefits from the asset. The lessor transfers only the right to use the asset to the lessee. Leasing offers firms the possibility to acquire the right to use capital assets under terms that differ from those prevailing through other financial instruments. The recording of leased assets in the Canadian System of National Accounts is ownership-based rather than user-based. The separation of capital ownership, in particular legal ownership, from the use of capital assets poses challenges to productivity measurement. To obtain consistent productivity measures at an industry level, leased and rented capital assets must be reallocated from owners? accounts to users? accounts. By using the General Index of Financial Information (GIFI) corporate balance sheets and detailed input-output tables, this paper tests the robustness of existing practices of data collection on leased and rented capital.
    Keywords: Economic accounts, Gross domestic product, Productivity accounts
    Date: 2014–07–22
  7. By: Gaddour, Inès
    Abstract: This study develops and empirically tests a model in order to study the dysfunctional behaviors of senior auditors in the French context. The related literature is then reviewed in the first section. The next section identifies the factors influencing the dysfunctional behaviors. The variables are then defined before a presentation of the empirical tests. Finally, the summary and the conclusion are presented. The results show that the dimension of Leader Member-Exchange (LMX), namely Loyality, has a significant effect on the reduction of adaptive behaviors (Quality-Threatening Behaviour: QTB, mismanagement of the audit team: MGE and unprofessional behaviors: CNP). Also, results highlight that under the effect of mimetic and professional skills adopted by a superior, the CNP as well as the MGE are significantly reduced. This result is also confirmed between managerial behavior and supervisor CNP. In addition, demographic variables, namely gender, experience as a senior and experience in the audit have been proven to have a significant impact on adaptive behaviors. Eventually the analysis confirm the results of previous research concerning the impact of the style assessment based on technical criteria, affective commitment, budget pressure and deadline pressure on such types of behavior.
    Keywords: Qualité d’audit; Comportements dysfonctionnels; Théorie LMX; Modèle de rôle; Perception du style d’évaluation; Audit Quality; Dysfunctional behaviors; LMX theory; Role modeling; Perception of evaluation design;
    JEL: M12 M42
    Date: 2014–05
  8. By: Hubert Gabrisch; Karsten Staehr
    Abstract: The Euro Plus Pact was approved by 23 EU countries in March 2011 and came into force shortly afterwards. The Pact stipulates a range of quantitative targets meant to strengthen cost competitiveness with the aim of preventing the accumulation of external financial imbalances. This paper uses Granger causality tests and vector autoregressive models to assess the short-term linkages between changes in the relative unit labour cost and changes in the current account balance. The sample consists of annual data for 27 EU countries for the period 1995-2012. The main finding is that changes in the current account balance precedes changes in relative unit labour costs, while there is no discernable effect in the opposite direction. The divergence in unit labour costs between the countries in Northern Europe and the countries in Southern and Eastern Europe may thus partly be the result of capital flows from the core of Europe to the periphery prior to the global financial crisis. The results also suggest that the measures in the Euro Plus Pact to restrain the growth of unit labour costs may not affect the current account balance in the short term.
    Keywords: European integration, policy coordination, unit labour costs, current account im-balances, economic crisis
    JEL: E61 F36 F41
    Date: 2014–07

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