nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2016‒07‒02
ten papers chosen by
Alexander Harin
Modern University for the Humanities

  1. The ethics of tax accounting. Is there a conflict? By TOMA, LOREDANA OANA
  3. A data-driven procedure to determine the bunching window: An application to the Netherlands By Dekker, Vincent; Strohmaier, Kristina; Bosch, Nicole
  4. Shareholders’ Demand for Conservatism? Accounting Conservatism, Earnings Management, and the Stewardship Value of Information By Larmande, Larmande
  5. Some Options for Taxation of Income from Financial Instruments in the Context of the Qualitative Characteristics of the Tax System By Malinina, Tatiana
  6. The Effects of IFRS Adoption on Observed Earnings Smoothing Properties: The Confounding Effects of Changes in Timely Gain and Loss Recognition By Capkun , Vedran; Collins , Daniel W
  7. The Power to Tax in Sub-Saharan Africa: LTUs, VATs, and SARAs By Christian EBEKE; Mario MANSOUR; Grégoire ROTA-GRAZIOSI
  8. Tax Expenditures: A Review and Analysis By Joshua Hall
  9. Формирование добавленной стоимости сельского хозяйства России в системе национального счетоводства By Zinchenko, Aleksey
  10. Information Production, Misconduct Effort, and the Duration of Corporate Fraud By Pinheiro, Roberto; Black, Jonathan; Nilsson, Mattias; da Silva, Maximiliano

    Abstract: Until the last century, the business environment use a variety of tax engineers in order to distort the tax base. The starting point in calculating taxes are accounting information but in accounting, ethics standards are based on integrity, fairness and impartiality. Can be considered taxation the main factor of accounting truth distortion or the engine of creative accounting? In such cases the present paper provide a framework with which to evaluate these situations. This paper also presents a summary of the different study that analyses the history of ethics and morality in accounting and is based on account qualitative methods.
    Keywords: tax, accounting, ethics, morality
    JEL: D21 L21 M14 M41
    Date: 2016–06–20
  2. By: ZEW
    Abstract: The project 'Effective tax rates in an enlarged European Union' is based on the methodology used for the calculation of effective tax rates (ETRs) as set out by Devereux and Griffith (1999, 2003). It extends the scope of the calculation of ETRs conducted under the study on effective levels of company taxation within an enlarged EU (2008). The project includes a focus on the effects of tax reforms in the EU28, FYROM and Turkey as well as Norway, Switzerland, Canada, Japan and the United States for the period 1998-201 and their impact on the level of taxation for both domestic and cross-border investment.
    Keywords: European Union, taxation, effective tax, corporate tax, enlarged European Union
    Date: 2015–10
  3. By: Dekker, Vincent; Strohmaier, Kristina; Bosch, Nicole
    Abstract: This paper presents new empirical evidence on taxpayers' responsiveness to taxation by estimating the compensated elasticity of taxable income with respect to the net-of-tax rate in the Netherlands. Applying the bunching approach introduced by Saez (2010), we find small, but clear evidence of bunching behaviour at the thresholds of the Dutch tax schedule with a precise estimated elasticity of 0.023 at the upper threshold. In line with the literature, we find much larger estimates for women and self-employed individuals, but we can also identify significant bunching behaviour for wage employed individuals which we can attribute to tax deductions for couples. We add to the bunching literature by proposing to rely on the information criteria to determine the counterfactual model, as well as developing an intuitive, data-driven procedure to determine the bunching window.
    Keywords: Elasticity of Taxable Income,Optimal Bunching Window
    JEL: H21 H24
    Date: 2016
  4. By: Larmande, Larmande
    Abstract: This article aims to clarify the consequences of accounting conservatism from a stewardship (principal-agent) point of view. Prior literature argues that the limited liability of the agent always results in a demand for conservatism, and that conservatism is beneficial because it deters earnings management. I challenge both arguments. Firstly, I show and derive the conditions under which an aggressive (or liberal) accounting information system might be preferred to a conservative one when the agent has limited liability. Risk aversion plays a crucial role, with a higher degree of risk aversion encouraging increased aggressiveness. Secondly, I provide the stylized example of choosing between rules-based (Rules ) and principles-based (Principles ) accounting. The latter, involving greater subjectivity, might increase the likelihood of earnings manipulation, but enables the agent to communicate relevant, albeit self-serving, private information. Both effects result in Principles being less conservative than Rules. I show that Principles might, nonetheless, be optimal, depending on the value of the likelihood ratio of manipulation versus the provision of relevant information. Manipulation and self-serving reports, which introduce an aggressive bias, might be the price to pay for more informative accounts.
    Keywords: Earnings management; Accounting conservatism; Limited liability; Ranking of accounting information systems; Principal Agent
    JEL: D82 M41 M52
    Date: 2016–06–15
  5. By: Malinina, Tatiana (Russian Presidential Academy of National Economy and Public Administration (RANEPA), Gaidar Institute for Economic Policy)
    Abstract: The author analyses the Russian experience of the large-scale changes in tax legislation in the years 2010–2011 forming the basis for current tax regime for income from financial instruments in the context of neutrality and efficiency of the tax system.
    Keywords: Income taxation, Financial instruments, Tax neutrality, Tax efficiency
    Date: 2016–04–14
  6. By: Capkun , Vedran; Collins , Daniel W
    Abstract: The observed smoothing of earnings (i.e. negative contemporaneous correlation between accruals and cash flows) is the joint product of the role of accruals in smoothing out transitory fluctuations in operating cash flows (noise reduction role) and the role of accruals in providing timely gain and loss recognition (contracting role). These two roles of accruals have opposite effects on earnings smoothing properties. We demonstrate that failing to control for changes in timely gain and loss recognition as firms shift to IFRS can lead to erroneous inferences regarding the effects of IFRS adoption on earnings smoothing, and consequently on researcher’ conclusions about how IFRS adoption has affected accounting quality. Our results are consistent with IFRS adoption resulting in a change in the contracting role rather than the noise reduction role of accruals. A decrease in timely loss recognition, an increase in timely gain recognition, and a net decrease in asymmetric timely loss recognition are what drives the change in observed smoothing of earnings.
    Keywords: Earnings smoothing; IFRS; Timely gain and loss recognition
    Date: 2016–02–01
  7. By: Christian EBEKE (Fonds Monétaire international); Mario MANSOUR (Département des Finances - Fonds Monétaire International); Grégoire ROTA-GRAZIOSI (Ferdi)
    Abstract: In the context of achieving the new Sustainable Development Goals, revenue mobilization is a high priority in developing countries and in Sub-Saharan Africa, where governments’ ability to tax remains limited. Using a unique revenue dataset spanning the period 1980-2010, we analyze three important tax reforms: the Large Taxpayers Unit (LTU), the Value Added Tax (VAT), and the Semi-Autonomous Revenue Agency (SARA). We propose an ex-post impact assessment of these tax reforms in SSA countries based on propensity-score matching methodology (PSM) and synthetic control method (SCM). VAT and SARA are found to have an unambiguously large and positive effect on non-resource taxes, while the impact of LTU is insignificant—LTU seems however an important precondition for the adoption of the first two reforms. We conclude also that VAT and SARA display some synergy, and their positive effects strengthen several years after their adoption.Keywords: tax reforms; Africa; revenue mobilization; causality.
    Keywords: tax reforms, Africa, revenue mobilization, causality.
    JEL: H2 O23 O55 C1
    Date: 2016–06
  8. By: Joshua Hall (West Virginia University, Department of Economics)
    Abstract: This study examines a feature of the budget process called the tax expenditure budget. The tax expenditure concept relies heavily on a normative notion that shielding certain taxpayer income from taxation deprives government of its rightful revenues. This view is inconsistent with the proposition that income belongs to the taxpayers and that tax liability is determined through the democratic process, not through arbitrary, bureaucratic assumptions. Furthermore, the methodology of the tax expenditure budget is problematic as its expansive tax base treats the multiple taxation of saving as the norm. By using an expansive view of income as the underlying assumption of the tax expenditure concept, this viewpoint institutionalizes a particular bias into the decision-making process.
    Keywords: tax expenditure budget, tax liability
    Date: 2016–06
  9. By: Zinchenko, Aleksey
    Abstract: The article deals with the formation of macroeconomic indicators of income and place of agriculture in the economy of Russia under the planned and market conditions, as well as with their dynamics. There is an analysis of value added in agriculture under modern conditions in general and in the sector of non-financial corporations and households, the features of its economic content are revealed. The method of calculation and analysis of indicators of value added in various spheres of agriculture based on financial reporting data of agricultural organizations is proposed.
    Keywords: Сельское хозяйство, валовой внутренний продукт, валовая и чистая добав-ленная стоимость, оценка продукции и доходов, сельскохозяйственные организации, домашние хозяйства населения
    JEL: C18 Q1
    Date: 2016–01
  10. By: Pinheiro, Roberto (Federal Reserve Bank of Cleveland); Black, Jonathan (Perdue University); Nilsson, Mattias (US Securities and Exchange Commission); da Silva, Maximiliano (Fundação Escola de Comércio Álvares Penteado and Escola Superior de Administração e Gestão)
    Abstract: We develop and test a model linking the duration of financial fraud to information produced by auditors and analysts and efforts by managers to conceal the fraud. Our empirical results suggest fraud termination is more likely in the quarter following the release of audited financial statements, especially when reports contain explanatory language, indicating auditors’ observable signals reduce fraud duration. Analyst attention increases the likelihood of fraud termination, but the marginal effect beyond the first analyst is negative, possibly due to free riding and herding behavior impairing analysts’ ability to illuminate misconduct. Finally, evidence suggests managerial concealment significantly increases fraud duration.
    Keywords: Fraud duration; Information production; Fraud effort; Auditor reports; Hazard models;
    JEL: G34 G38 K22 K42 L51 M41
    Date: 2016–06–01

This nep-acc issue is ©2016 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.
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