nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2016‒10‒23
six papers chosen by

  1. Responses of firms to tax, administrative and accounting rules: Evidence from Armenia By Asatryan, Zareh; Peichl, Andreas
  2. Prudential filters, portfolio composition and capital ratios in European banks By I. Argimon; M. Dietsch; A. Estrada
  3. Between aritmetic and accounting : the contribution of Lazare Moulin-Collin (1792-1850) By Luc Marco; Robert Noumen
  4. Current Account Deficits During Heightened Risk: Menacing or Mitigating? By Kristin Forbes; Ida Hjortsoe; Tsvetelina Nenova
  5. Predicting bankruptcy in European e-commerce sector By Janda, Karel; Moreira, David
  6. Estimating the Elasticity of Taxable Income: Evidence from Top Japanese Taxpayers By Miyazaki, Takeshi; Ishida, Ryo

  1. By: Asatryan, Zareh; Peichl, Andreas
    Abstract: Using panel data on the full population of corporate tax returns of Armenian firms, we study the behavioral response of firms to three size-dependent regulations. We find: i) a strong response to an accounting notch where International Financial Reporting Standards become mandatory; ii) a moderate response to an administrative notch below which the frequency of filing and paying taxes declines from monthly to quarterly; and iii) no response to a tax notch created by the registration threshold of the value added tax. Exploiting tax audits, we provide evidence suggesting that income under-reporting drives the bunching response of firms by between 60 and 100 percent. Additional evidence suggests that firms respond to tax audits by compensating every additional dollar of audit driven increase in reported income by a 0.7-0.8 dollar increase in reported deductions.
    Keywords: small and medium enterprises,size-dependent regulation,value added tax,tax administration,tax accounting,tax evasion
    JEL: H25 H26 O12
    Date: 2016
  2. By: I. Argimon; M. Dietsch; A. Estrada
    Abstract: European banks hold 10% of their total assets in portfolios that give rise to unrealised gains and losses which under Basel III will no longer be allowed to be excluded from banks’ regulatory capital. Using a sample of European banks, and taking advantage of the different regulatory treatments that are allowed, under Basel II, to account for such gains and losses among jurisdictions and instruments and over time, we find evidence that: a) the inclusion of unrealised gains and losses in capital ratios increases their volatility; b) the partial inclusion of unrealised gains and total inclusion of losses on fixed-income securities in regulatory capital, compared with the complete exclusion of both (or “neutralization”), reduces the volume of securities categorised as Available For Sale (AFS), thus potentially affecting liquidity management and demand for bonds (most of which are currently government bonds); and c) the higher the partial inclusion of gains from debt instruments, the lower the holdings of such instruments in the AFS category and the higher the regulatory Tier 1 capital ratio, thus affecting banks’ capital buffer strategy. We do not find evidence that the absence of neutralisation would impact capital ratios.
    Keywords: Bank capital ratios, Bank regulation, Fair Value Accounting, Prudential Filters.
    JEL: G21 M41
    Date: 2016
  3. By: Luc Marco (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique); Robert Noumen (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The history of the small business schools in Province in the nineteenth century can be made through the works of his professors. The link between arithmetic and accounting is essential to understand the education at the average level for pupils having between 12 and 16 years. The rediscovery of a mathematician doubled by an accountant, Lazare Moulin-Collin, allows to understand the formation of the teachers and the experts in these domains. From new archival sources we rediscover the biography and the contents of his very interesting works.
    Abstract: L'histoire des petites écoles de commerce en Province au dix-neuvième siècle peut être faite au travers des ouvrages de ses professeurs. Le lien entre arithmétique et comptabilité est essentiel pour comprendre l'enseignement au niveau moyen pour des élèves ayant entre 12 et 16 ans. La redécouverte d'un mathématicien doublé d'un comptable, Lazare Moulin-Collin, permet de comprendre la formation des enseignants et des experts dans ces domaines. A partir de sources archivistiques nouvelles nous redécouvrons la biographie et le contenu de ses ouvrages très intéressants.
    Keywords: Arithmetic,accounting,Arithmétique,comptabilité
    Date: 2015–11–24
  4. By: Kristin Forbes; Ida Hjortsoe; Tsvetelina Nenova
    Abstract: Large current account deficits, and the corresponding reliance on capital flows from abroad, can increase a country’s vulnerability to periods of heightened risk and uncertainty. This paper develops a framework to evaluate such vulnerabilities. It highlights the central importance of two financial factors: income on international investments and changes in the valuations of those investments. We show how the characteristics of a country’s international investment portfolio – the size of its international asset and liability holdings, their currency denominations, their split between equity and debt, and their return characteristics – affect the dynamics of these financial factors. Then we decompose those dynamics into their drivers, explore how they are affected by domestic and global risk shocks, and apply this framework to 10 OECD economies. These examples, including a more detailed assessment for the UK, show that a substantial degree of international risk sharing can occur through current accounts and international portfolios. Our flexible framework clarifies which characteristics of a country’s international portfolio determine whether a current account deficit is “menacing” or “mitigating”.
    JEL: F21 F32 F36 F42
    Date: 2016–10
  5. By: Janda, Karel; Moreira, David
    Abstract: In the current competitive and uncertain e-commerce environment, businesses have the need to predict in advance their likelihood of falling into bankruptcy. The central focus of this paper is to statistically model through different approaches the bankruptcy probability of e-commerce companies in Europe. The authors examine the econometric techniques twostep cluster, logistic regression, discriminant analysis, data mining tree, and roc curves to correctly classify these companies into bankrupt and not bankrupt. The paper finds evidences about the current credit underwriting inexperience among several financial institutions. The classification approaches included in this paper may be applied in real working practice whether by credit underwriters or by business decision makers. The research was developed using financial and accounting information available in the Bureau Van Dijk database. The paper suggests further analytical developments in the field of predictive bankruptcies, and recommends improvements on the credit evaluation scorecards such as the inclusion of advanced online metrics to increase the accuracy of the creditworthiness evaluation of an e-commerce company.
    Keywords: e-commerce, Europe, bankruptcy, econometrics, prediction
    JEL: G33
    Date: 2016–10–11
  6. By: Miyazaki, Takeshi; Ishida, Ryo
    Abstract: This study measures the elasticity of taxable income (ETI) using data on top Japanese taxpayers between 1986 and 1989. During these years, Japan decreased the income tax rates of the top-to-bottom income earners and number of income brackets drastically. We construct a panel dataset of top taxpayers in Japan in this period, using Japanese tax return data and estimate the ETI. We find that the ETI with regard to the net-of-tax rate is approximately 0.074–0.055, considerably lower than those for the United States and most European countries but nearly equal to that for Denmark.
    Keywords: Elasticity of taxable income; income tax; Japan; top taxpayers
    JEL: H21 H24
    Date: 2016–10

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