nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2016‒02‒12
twelve papers chosen by
Alexander Harin
Modern University for the Humanities

  1. AN EMPIRICAL INVESTIGATION REGARDING THE ETHICS OF EARNINGS MANAGEMENT (International Conference "Recent Advances in Economic and Social Research", 13-14 mai 2015, București) By Alina Beattrice Vladu
  2. The Effect of Competition on Tax Compliance: The Role of Audit Rules and Shame By Alberto Casagrande; Daniela Di Cagno; Alessandro Pandimiglio; Marco Spallone
  3. Taxation and distribution of income in Brazil: new evidence from personal income tax data By Sérgio Wulff Gobetti; Rodrigo Octávio Orair
  4. Towards a finance that CARES By Alexandre Rambaud; Jacques Richard
  6. Budgeting and Accounting in OECD Education Systems: A Literature Review By Tala Fakharzadeh
  7. Financial assistance measures in the euro area from 2008 to 2013: statistical framework and fiscal impact By Maurer, Henri; Grussenmeyer, Patrick
  8. Bank output calculation in the case of France: what do new methods tell about the financial intermediation services in the aftermath of the crisis? By Groslambert Bertrand; Raphaël Chiappini; Olivier Bruno
  9. The Adam Smith's Banking System: The sources of the analysis of modern banking governance By Nissaf Ben Ayed; Gérard Mondello
  10. PERCEPTIONS OF PROFESSIONAL ACCOUNTANTS REGARDING ACCOUNTING POLICIES (International Conference "Recent Advances in Economic and Social Research", 13-14 mai 2015, București) By IOANA Herbei (MOȚ)
  11. Classification of Intangible Assets in Turkey: The Case of Borsa Istanbul (BIST) By Derya Findik; Murat Ocak
  12. A More Precise Approach to Fiscal Consolidation and Sustainability By Sérgio Afonso

  1. By: Alina Beattrice Vladu (Babes-Bolyai University Cluj-Napoca, Faculty of Economics and Business Administration)
    Abstract: This paper assessed the knowledge structures underlying accounting representations, rarely investigated in accounting by examining the perceptions of master and last year accounting students from an ex-communist country relative to the ethics of short-term earnings management. In this respect a survey was conducted during one month period in one of the largest public universities in Romania. The results document a differentiate acceptance of the types of earnings management (e.g. accrual-based versus real earnings management). Overall Romanian students seems to accept as less ethical the accrual-based earnings management and to have a high moral development and understanding of the consequences of such manipulative practices. Limits of the paper are presented and also the scope for future research
    Keywords: ethical judgments, accrual based earnings management, real earnings management, ethical factors
    JEL: M40 M41
    Date: 2015–12
  2. By: Alberto Casagrande; Daniela Di Cagno; Alessandro Pandimiglio; Marco Spallone
    Abstract: Traditional models of tax enforcement assume that the decision to be tax compliant is the result of an interaction between individual taxpayers and a dedicated tax agency. Evidence shows that tax compliance is the result of a far more complex decision rule, involving both individual and group motivations, along with non-monetary components. In this paper, we consider a game in which the individual decision to be tax compliant is affected both by strategic competition between taxpayers and the psychological cost of being detected (i.e., shame). We ran a laboratory experiment using a sample of 138 students at the Centro di Economia Sperimentale A Roma Est (CESARE), in the experimental lab at the LUISS “Guido Carli†University of Rome, to evaluate the efficiency of random versus targeted audit rules and to verify the interaction between strategic competition and shame. The experimental results show that strategic competition between taxpayers plays a critical role in reducing tax evasion. In addition, shame reinforces this competition, but plays no significant role on its own (i.e., without competition).
    Keywords: Tax evasion, Lab Experiment, Shame, Competition
    JEL: H26 C91 C72
  3. By: Sérgio Wulff Gobetti (IPC-IG); Rodrigo Octávio Orair (IPC-IG)
    Abstract: This paper presents a critical analysis of income and profit taxes in Brazil, demonstrating how measures adopted in the 1980s and 1990s, as a result of mainstream recommendations, hindered the redistributive role of taxes in the country. Investigation of tax data reveals a high degree of income concentration at the top of the distribution, low progressivity and violations of the principles of horizontal and vertical equity. The main reason for these distortions is the complete tax exemption of dividends for shareholders, a benefit that is very rarely seen in developed countries. We propose a return to a progressivity-focused tax reform plan, a theme that has returned as a focus of debates with Piketty (2014). (?)
    Keywords: Taxation, distribution, income in Brazi, evidence, tax data, tax reform, tax progressivity
    Date: 2016–02
  4. By: Alexandre Rambaud (DRM - Dauphine Recherches en Management - Université Paris IX - Paris Dauphine - CNRS - Centre National de la Recherche Scientifique); Jacques Richard (DRM - Dauphine Recherches en Management - Université Paris IX - Paris Dauphine - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Today's sustainable finance mainly relies on the extension of a particular classical capital theory to extra-financial types of capital (in particular human and natural). We call (and justify it) this mainstream theory, the Fisherian-(falsified) Hicksian approach. After a critical analysis of this model, we claim that this way of conceptualising sustainable finance is finally unsustainable. At the same time, we also defend the idea that there is a convergence between ecological-based sustainability (which we can call by definition a genuine sustainability) and the extension of the traditional accounting framework to extra-financial types of capital. Therefore, we propose to structure a sustainable finance from this perspective (which we call CARES, for Capital Approach Resting on Ecological-based Sustainability): after having defined how to operationalise and theorize such a sustainable accounting, thanks to the " Triple Depreciation Line " model (Rambaud & Richard, 2015), we use this model to redefine the notion of free cash-flows to make them " sustainable ". We finally discuss the manner they can be used for financing purposes.
    Keywords: free cash-flows,integrated reporting,capital,sustainable finance,social and environmental accounting,sustainability
    Date: 2015–04–23
  5. By: Baranova Valentina (Russian Presidential Academy of National Economy and Public Administration)
    Abstract: In the article are considered the features of monetary Instruments, documenting operations reflecting their movement, especially accounting and order depreciation costs on monetary instruments of the organization.
    Keywords: accounting, cash, cash assets, cash documents, costs
    Date: 2015
  6. By: Tala Fakharzadeh
    Abstract: Recent demographic, economic and political trends have drawn attention to the issue of effectiveness and efficiency in the use of resources in the education sector. In the context of the renewed interest for the optimisation of resource use, this paper attempts to review the literature on budgeting and accounting in OECD education systems. The analysis of accounting and budgeting in education systems provides an understanding of decision-making processes regarding education policies and projects, in terms of prioritisation, planning, allocation, monitoring and evaluation of resource use. The subjects covered in the paper also help to understand how resources are distributed. Greater requests for transparency from citizens are indeed pressuring governments to justify how public resources are allocated, and which variables determine the levels of funding flowing to schools. Finally, accounting standards and budgeting methods are studied in the current paper as they may also have an impact on effectiveness and efficiency of resource use. This report first explores governance questions underlying budgeting and accounting. Subsequently, the report reviews procedures and tools adopted by countries for budgeting and accounting. Finally, it presents methods for evaluation and monitoring of resource use. The paper attempts to identify trends and commonalities in country practices in primary, secondary and post-secondary non-tertiary education; however, there are great variations on the studied topics across and within countries. En raison des récentes évolutions démographiques, économiques et politiques, une plus grande attention est accordée aux questions d’efficience et d’efficacité dans l’utilisation des ressources dans le domaine de l’éducation. Dans le contexte d’un renouveau d’intérêt pour l’optimisation de l’utilisation des ressources, ce papier vise à réaliser une revue de littérature au sujet des processus budgétaires et comptables au sein des systèmes éducatifs de l’OCDE. L’analyse des systèmes comptables et des procédures budgétaires dans les systèmes éducatifs permet de donner un aperçu des processus de décision relatifs aux politiques et aux projets dans l’éducation, en termes de priorisation, planification, allocation, pilotage et d’évaluation de l’utilisation des ressources. Les sujets étudiés dans ce papier permettent également de comprendre comment les ressources sont distribuées. Une plus grande demande de transparence de la part des citoyens met en effet sous pression les gouvernements, qui doivent justifier l’allocation des ressources publiques et la nature des variables permettant de déterminer le montant des fonds alloués aux écoles. Enfin, les standards comptables et les méthodes budgétaires sont étudiés dans ce papier car ces derniers peuvent également avoir un impact sur l’efficience et l’efficacité dans l’utilisation des ressources. Ce rapport explore tout d’abord les questions de gouvernance sous-jacentes aux systèmes budgétaires et comptables. Par la suite, le rapport effectue une revue des procédures et outils budgétaires et comptables adoptés par les pays. Enfin, le papier présente des méthodes pour l’évaluation et le pilotage de l’utilisation des ressources. Le papier vise à identifier les tendances et les points communs au travers des pratiques des pays au niveau de l’école primaire, secondaire et post-secondaire non tertiaire. Cependant, il faut noter de grandes variations relatives aux sujets étudies, entre et au sein-même des pays.
    Date: 2016–02–10
  7. By: Maurer, Henri; Grussenmeyer, Patrick
    Abstract: This paper summarises the accounting principles and methodology used by statisticians within the European System of Central Banks (ESCB) to assess the impact on the government’s fiscal position of the assistance measures undertaken to support the financial sector during the financial crisis. It then presents for the euro area and its participating countries the main fiscal impact of these measures for the period 2008-2013. The results are mainly structured around three important questions for the wider public: (i) What is the magnitude of the financial resources needed by governments to provide financial support? (ii) What is the current gain or loss to governments from interventions to support the financial sector? And (iii) How did the guarantees provided by governments to the financing sector change over the period? Finally, the paper discusses further accounting challenges associated with this topic. JEL Classification: H81
    Keywords: bailout measures, capital transfers to the financial sector, change in net financial worth on balance sheet, earmarking and recording imputation, financial needs and estimated loss, impact on government debt and deficit
    Date: 2015–04
  8. By: Groslambert Bertrand (SKEMA Business School - SKEMA Business School); Raphaël Chiappini (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS - Centre National de la Recherche Scientifique - UNS - Université Nice Sophia Antipolis); Olivier Bruno (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS - Centre National de la Recherche Scientifique - UNS - Université Nice Sophia Antipolis)
    Abstract: Since the onset of financial crisis, the System of National Accounts method for measuring the value added in the banking sector has become subject to criticism. Some authors argue that the value added by banks should be the residual net interest income after subtracting the required term and risk premiums on loans and deposits. For the first time, we apply this method to evaluate bank output for France for the period 2003 to 2012. First, we show that on average, using the traditional method, bank output is overestimated by between 31% and 74%. This overestimation is especially pronounced in times of financial stress. Second, we establish that the proposed new method is robust to the choice of various reference rates. Third, we find negative FISIM (Financial Intermediation Services Indirectly Measured) on deposits from 2009. Finally, we check the existence of a single or multiple structural unknown breaks in the long run relationship between retail interest rates and driving market reference rates. We find existence of break dates that are coincident with negative FISIM on deposits. We explain this result by a change in banking behavior that may result from the new banking regulation on liquidity and from banks' adaptation to "near" zero interest rate policy
    Keywords: FISIM, interest rate pass-through, structural break
    Date: 2016–01–12
  9. By: Nissaf Ben Ayed (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS - Centre National de la Recherche Scientifique - UNS - Université Nice Sophia Antipolis); Gérard Mondello (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique)
    Abstract: While in this twenty-first Century (XXIe), questions are rising about the banking system governance and the "post-crisis governance reforms", it is useful to revisit the founding debates of the governance of the twentieth century (XXe). In this area, traditionally, we follow Berle and Means (1932) by tracing separation between shareholders and managers. However, Adam Smith’s banking system view already highlighted the importance of strategic choice of bank executives (risk) in the emergence of crisis phenomena. These strategic choices refer to the relationship between shareholders and managers. From his analysis, one can safely conclude that the way in which ‘Ayr’ bank is managed, that is the role of its governance, constitutes a key determinant of the excessive risk and the fragility of this bank. Specifically, we show that the dispersed Ayr bank’s ownership structure, the asymmetric information between Board and Shareholders and the lack of directors expertise and independence for inuring transparency increased both the bank’s risk taking and its fragility. The regulation issue of the banks activity is at the heart of Smith’s banking theory. It finds an echo in controversies over reports of credit and currency issues in the19th century. Smith’s support to banking regulation seems to have been a response to the 1772 Scottish bank crisis understood as the first modern banking crisis. In Smith’s opinion, the banks should be regulated to ensure the correct reflux of credit currency and avoiding an excessive transformation risk.
    Keywords: credit and currency issues. ,bank governance and regulation, Ayr crisis, risk taking behavior, financial fragility, transformation risk
    Date: 2015–06–11
  10. By: IOANA Herbei (MOȚ) (West University of Timisoara, FEAA)
    Abstract: In this article we intend to present the perception of professional accountants regarding the accounting policies used in companies. The article is divided into the following parts: introduction, literature review, research methodology, research results and conclusions of the research. In the work of this paper we make inquiries to determine the perception of professional accountants such assumptions resulting in a significant importance given to elaborating and grounding of accounting policy manual. Respondents consider that the main factor underpinning the drawing up and grounding of accounting policy manual is faithful image. Through this study we want to show that professional accountants offer importance to accounting policies, like: principles, methods, procedures, treatments etc.
    Keywords: accounting policies manual, professional accountants, elaboration, substantiation, faithful image
    JEL: M40 M41
    Date: 2015–12
  11. By: Derya Findik (Department of Management Information Systems, Yildirim Beyazit University); Murat Ocak
    Abstract: This study aims to analyze the development of intangible assets in Turkey for the period of 2005-2013 by using Borsa Istanbul (BIST) database. There has not been any study dealing with intangible assets and their role in the economic growth or firm productivity in Turkey due to the lack of data and classification in this field. In this study, we apply the classification introduced by Corrado et al. (2004) to fill this research gap in the literature. According to this, intangible assets could be decomposed into three parts namely, economic competency, innovative property, andcomputerized information and database. Economic competency is comprised of advances given, comptation agreements, and special costs. Computerised information and database, on the other hand, is closely related to computer software, information systems, computer programs, and customer database. Innovative property includes assets such as patents, licenses, films, and research and development activities. According to our results, the share of intangible assets in the economy is less than that of tangible assets. The evidence, however, suggests that the share of intangibles tends to increase in recent years. As far as the subcomponents of intangible assets are considered, the share of innovative property in total assets is much higher than the share of other subcomponents. The share of computerised information and database, on the other hand, is expected to increase in following years.
    Keywords: Intangible assets, Turkey, BIST XUTUM.
    Date: 2014–12
  12. By: Sérgio Afonso (Independent)
    Abstract: This paper argues that austerity is not a good solution for fiscal consolidation and sustainability. Therefore, it is imperative to find a new approach. This paper presents a mechanism to improve both tax compliance and fiscal sustainability.
    Keywords: fiscal consolidation, fiscal sustainability, formalization
    Date: 2016–01–27

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