nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2018‒04‒16
seven papers chosen by

  1. Investigation of methods of counteracting corporate fraudulence: accounting-legal approaches to the identification of abusonment By Plikus, Iryna
  2. Are international accounting standards more credit relevant than domestic standards? By Florou, Annita; Kosi, Urska; Pope, Peter F.
  3. Growth Facts with Intellectual Property Products: An Exploration of 31 OECD New National Accounts By Sangmin Aum; Dongya Koh; Raül Santaeulàlia-Llopis
  4. Счетоводното регламентиране на репутацията в България – исторически преглед и анализ By Atanasov, Atanas
  5. The Dynamic Effects of Computerized VAT Invoices on Chinese Manufacturing Firms By Haichao Fan; Yu Liu; Nancy Qian; Jaya Wen
  6. Tracing value-added and double counting in sales of foreign affiliates and domestic-owned companies By Miroudot, Sébastien; ye, ming
  7. Hiring Discrimination on the Algerian Labour Market: an Assessment with Testing By Lamia Benhabib; Philippe Adair

  1. By: Plikus, Iryna
    Abstract: As the study shows, an urgent issue for businesses today is the problems of corporate fraud and the counteracting measures. Despite the continuous development of internal control and audit systems, business losses from fraud in enterprises are growing every year. The risks of fraud are growing in an inefficiently controlled environment and it is not enough to use standard audit methods to detect fraud. Therefore, it is vital to study the issues related to the organization of an effective system of countering fraud. Taking into account the existing experience and world experience in counteracting this negative phenomenon, a study is conducted to establish an internal security and anti-fraud system at the enterprise and it is proposed to create the Financial Investigation Agency at the enterprise itself, which includes services: information and analytical control, internal audit, financial investigations and psychological prevention of violations. This will streamline the work of the internal security service, create and implement control procedures, redistribute the powers between the units of the enterprise at different levels. The tables of abuse indicators and the structure of the library of typical schemes of abuse in the article allow to adapt to the work of new employees of the internal audit service, regardless of their experience, reduce the risks of key business processes and improve their effectiveness; they can be used to identify, rank and assess potential risks of fraud. Research results shows that one of the departments of fraudulent activities is the department of finance and accounting and one of the types of financial fraud is the falsification of financial statements, which is extremely difficult to identify and prevent, in addition to deliberate distortions, there are distortions that are the result of conflicts of professional judgment on the application of regulations and accounting regulations. The article examines the risks that can arise from fraudulent financial reporting, and the knowledge of which will counteract this type of fraud.
    Keywords: corporate fraud; falsification of financial statements; fraud risk assessment; Financial Investigation Agency
    JEL: G39
    Date: 2017
  2. By: Florou, Annita; Kosi, Urska; Pope, Peter F.
    Abstract: We examine whether the credit relevance of financial statements, defined as the ability of accounting numbers to explain credit ratings, is higher after firms are required to report under International Financial Reporting Standards (IFRS). We find an improvement in credit relevance for firms in 17 countries after mandatory IFRS reporting is introduced in 2005; this increase is higher than that reported for a matched sample of US firms. The increase in credit relevance is particularly pronounced for higher risk speculative-grade issuers, where accounting information is predicted to be more important; and for IFRS adopters with large first-time reconciliations, where the impact of IFRS is expected to be greater. These tests provide reassurance that the overall enhancement in estimated credit relevance is driven by accounting changes related to IFRS adoption. Our results suggest that credit rating analysts’ views of economic fundamentals are more closely aligned with IFRS numbers, and that analysts anticipate at least some of the effects of the IFRS transition.
    Keywords: IFRS; debt markets; credit ratings; credit relevance
    JEL: G15 G33 K20 M41
    Date: 2017–01–02
  3. By: Sangmin Aum; Dongya Koh; Raül Santaeulàlia-Llopis
    Abstract: We document a rise of intellectual property products (IPP) captured by up-to-date national accounts in 31 OECD countries. These countries gradually adopt the new system of national accounts (SNA08) that capitalizes IPP -which was previously treated as an intermediate expense in the pre-SNA93 accounting framework. We examine how the capitalization of IPP affects stylzed growth facts and the big ratios (Kaldor, 1957, Jones, 2016). We find that the capitalization of IPP generates (a) a decline of the accounting labor share, (b) an increase in the capital-to-output ratio across time, and (c) an increase in the rate of return to capital across time. The key accounting assumption behind the IPP capitalization implemented by national accounts is that the share of IPP rents that are attributed to capital, x, is equal to one. That is, national accounts assume that IPP rents are entirely owed to capital. We question this accounting assumption and apply an alternative split of IPP rents between capital and labor based on the cost structure of R&D as in Koh et al. (2018). We find that this alternative split generates a secularly trendless labor share, a constant capital-to-output ratio, and a constant rate of return across time. We discuss the implications of these new measures of IPP capital -conditional on x- for cross-country income per capita differences using standard development and growth accounting exercises. Please see the abstract on the paper to see
    Keywords: growth facts, intellectual property products, labor share, cross-country income differences
    JEL: E01 E22 E25
    Date: 2018–03
  4. By: Atanasov, Atanas
    Abstract: The purpose of this article is to review the historical development of normative regulation of issues related to goodwill in Bulgaria an objective critical analysis of the established regulations. Our research is based on the applicable legislation in Bulgaria during the period from 1993 to the present day. Dealt with in this article are solely the National Accounting Standards (NAS) adopted for implementation in the Republic of Bulgaria in this period. We have found that in the NAS issues related to goodwill, have a different treatment compared with the applicable IAS / IFRS. Can be formed three main differences that lead to related differences in accounting for goodwill. These differences should not be taken only as a shortcoming of our regulations. Changes in US regulations, IFRS for SMEs, ongoing discussions about the fate of goodwill included in the programs of the FASB and the IASB and the amendments to the Accountancy law in Bulgaria with effect from 1.1.2016, that narrow circle of enterprises which must apply IAS / IFRS, make us confident to believe that the Bulgarian legislator should go to building sustainable national standards regarding business combinations and goodwill. Undoubtedly, the NAS 22 is in need of revision, but it is important that national standards (which we hope will be soon) be relevant, clearly written and relatively easy to implement in comparison with IAS / IFRS, as this will help to increase consumer confidence on the information contained therein.
    Keywords: goodwill, accounting regulation, Bulgaria, National Accounting Standards (NAS)
    JEL: M41
    Date: 2017–06
  5. By: Haichao Fan; Yu Liu; Nancy Qian; Jaya Wen
    Abstract: This paper uses a balanced panel of large manufacturing firms to provide novel evidence on the dynamic effects of computerizing VAT invoices on tax revenues and firm behavior in China, 1998-2007. We find that computerization explains 14.38% of cumulative VAT revenues and increases the effective average tax rate by approximately 4.7-14% in the seven subsequent years. The evidence suggests that the effects of computerization change over time: tax revenue gains are likely to be smaller in the long run. Meanwhile, firms reduce output and input, and increase productivity monotonically over time.
    JEL: H26 H32 O10
    Date: 2018–03
  6. By: Miroudot, Sébastien; ye, ming
    Abstract: In this paper, we propose a new accounting framework for the decomposition of value-added into domestic, foreign and double counting terms in domestic sales. In this framework, we show where the value-added double counting is derived from and give an explicit expression of domestic and foreign double counting terms based on the Inter-Country Input-Output (ICIO) tables’ Ghosh insight. We can distinguish domestic sales from exports and trace the value added and double counting in sales of foreign affiliates and domestic-owned enterprises. Based on this framework, we then calculate the value-added by foreign-owned and domestic-owned firms in exports and in domestic sales by using an Inter-Country Input-Output table split according to ownership. Preliminary results suggest that there is much more double counting in sales of foreign affiliates than in exports and that more value-added is created through exports than through sales of foreign affiliates in world GDP.
    Keywords: inter-country input-output, value-added decomposition, global value chains, foreign affiliates
    JEL: E01 F23 L14
    Date: 2018–03–14
  7. By: Lamia Benhabib (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Philippe Adair (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)
    Abstract: We present the results of a correspondence testing, designed to measure the effect of gender on the probability of obtaining a job interview in the region of Oran (Algeria). The experimental protocol consists in responding to job offers in the accounting profession with 300 fictitious applications from identical profiles of distinct gender. Against conventional wisdom, the analysis of gross and conditional discrimination reveals a marked favouritism towards female candidates applying for various job positions in the accounting profession, which is experiencing some shortage. Beyond this paradox of positive discrimination favouring women, the explanation may be found in the presumed acceptance of lower wages by female applicants, driving to entrenchment in low-skilled jobs.
    Keywords: testing,Algeria,discrimination,gender,labour market,inequalities
    Date: 2017–06–29

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