nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2018‒05‒21
seven papers chosen by

  1. Determinants and Economic Consequences of Signing Auditor Turnover: A Large-Scale Study from China REPORT By Juan Mao; Baolei Qi
  3. “L'État c'est moi”....ou quoi? On the interrelations of accounting, managing and governing in the French ‘administrative monarchy’: revisiting the Colbert (1661-1683) and Paris brothers (1712-1726) episodes By Hoskin, Keith; Macve, Richard
  4. Вербалната комуникация като част от ключовите компетенции на счетоводителите в България By Georgieva, Daniela
  5. How Should Capital be Taxed? Theory and Evidence from Sweden By Spencer Bastani; Daniel Waldenström
  6. Successful Managerial Accounting Practices, the Antecedents and Consequences: Empirical Evidence from SMEs Ceramics By Phaithun Intakhan
  7. Ensemble Learning for Cross-Selling Using Multitype Multiway Data By Zhongxia (Shelly) Ye

  1. By: Juan Mao (Department of Accounting, UTSA); Baolei Qi (Xi’an Jiaotong University)
    Abstract: This study investigates why auditors leave one audit firm (and bring their clients) to another and the consequences of such turnover. Using a Chinese sample of 470 auditor-years with turnovers and 7,485 auditor-years without such turnovers from 2001 to 2014, we find that auditors’ professional competency is positively associated with a departure decision in additional to their demographics. Specifically, younger auditors, auditors who are industry specialists, and auditors who audit more clients and have better education background, are more likely to move, suggesting that “rising stars” in the accounting industry are more likely to move from one audit firm to another. However, female auditors, older auditors, and auditors with established status in the current audit firm are less likely to do so. Interestingly, Big 4 signing auditors in China are less likely to move relative to non-Big 4 auditors. We also find that auditors with lower audit quality are less likely to move from one audit firm to another, suggesting that the job market is penalizing auditors for bad quality audits. In terms of consequences, we find that the audit firm is more likely to lose clients whose incumbent auditor moves to another audit firm and it tends to lower audit fees for clients that stay with the audit firm, assign better auditors to them, and treat them more leniently. Our study provides insights that should be of interest to the audit profession, audit firms, and regulators.
    Keywords: auditor turnover, audit partners, individual auditors, audit fees, audit quality, audit switch
    JEL: M42 O15 E24
    Date: 2017–01–09
  2. By: Zhongxia (Shelly) Ye (Department of Accounting, UTSA)
    Abstract: In recent years a variety of stakeholders request more disclosures of audit committees’activities. As a response, audit committees in many large companies have voluntarily enhanced the depth and scope of their disclosures in the proxy statements. However, controversy arises surrounding whether more disclosures of audit committees’ activities are beneficial to investors. In 2015 the SEC started to seek comments on this issue. In this study I find that larger companies with diligent, longer-tenure, younger and more diversified audit committee members in companies with longer auditor tenure and higher total auditor fees are likely to provide more voluntary disclosures of audit committees’ activities. I also find that audit committee voluntary disclosures are useful to shareholders when they vote on audit committee director elections. However, the significance and directions of the usefulness vary with the content of the disclosures. Moreover, I provide moderate evidence that shareholders are less likely to vote against auditor ratification when the audit committee provides an explanation for a change in fees paid to the independent auditor. Overall, this study provides implications for policy makers such as the SEC as they are deliberating on the revisions of audit committee reporting requirements.
    Keywords: Audit committees, voluntary disclosures, director elections, audidtor ratification
    JEL: M42
    Date: 2018–01–18
  3. By: Hoskin, Keith; Macve, Richard
    Abstract: We explore the genesis of the modern power of management and accounting, reviewing two historical episodes that have been claimed to embody aspects of this modernity. For our analysis we distinguish two aspects of double-entry bookkeeping (DEB): first, the basic bookkeeping technique of cross-referencing and analysing doubled entries (Sangster, 2016), and second ‘the full logic’ of a closed system tracking an entity’s income and expense, assets and liabilities and ‘capital’ (Mattessich, 2000). Our first episode is Colbert’s ‘governing by inquiry’ (1661-1683), understood as a ‘managing’ of the French ‘administrative state’ under Louis XIV, where we see DEB’s use as limited to the first technique, undertaken for a forensic auditing of tax revenues to control and amend bad conduct. Second is the episode (1712-1726) of a banking family, the Paris brothers, where DEB is again first deployed similarly, for auditing and control of tax farmer practice, but then proposed as more general means of managing/governing the state. We review the interpretations of the first of these episodes made by Miller (1990) and Soll (2009; 2014), and that of Lemarchand (1999) concerning the second. We draw on Foucault’s analysis of today’s forms of governing as a ‘governmental management’ (2007: 107-8), which was blocked in the era of the administrative state, and explain this blockage as a result of principal-agent structures being used to govern the state. In this light, we see Miller as overinterpreting the closeness of Colbert’s ‘governing by inquiry’ to modern ‘governmentality’, and Soll as overinterpreting modern forms of management and accounting as operative in the governing approach of Colbert as ‘Information Master’. We also re-analyze the effective reach of the ambitions of the Paris brothers, as set out by Lemarchand, for the deployment of DEB. We then draw on Foucault’s (2001) and Panofsky ‘s (1957) analyses of ‘inquiry’ as a ‘form of truth’ which began as a new twelfth-century way of thinking, and trace this to Abelard’s development of ‘inquisitio’ as a new ‘critical reading’ (cf. Hoskin & Macve, 1986). We characterise its modus operandi as a ‘graphocentric synopticism’, graphocentric since all ‘data’ are translated into a gridded, cross-referenced über-text, which is then readable synoptically, all-in-one, from an immobile synthesising position. Foucault (2001) suggests that ‘inquiry’ gives way as mode of truth to ‘examination’ around 1800, and we link the genesis of governmental management to this shift and to the consequent articulation of a ‘panopticism’ which is multiply semiotic and so ‘grammatocentric’.
    Keywords: Colbert; Paris brothers; double-entry bookkeeping; administrative monarchy; graphocentric panopticism; modern management; governmentality
    JEL: N0 M40
    Date: 2016–10–31
  4. By: Georgieva, Daniela
    Abstract: The report presents primary data from individual interviews with accountants and managers of small-to-medium sized enterprises operating in Bulgaria. Main task of the paper is to outline and compare the views of the respondents regarding the verbal communication skills of the accountants and the main forms of communication they use.
    Keywords: Accounting, verbal and non-verbal communication, individual interviews.
    JEL: M40 M41 M49
    Date: 2017–06–22
  5. By: Spencer Bastani; Daniel Waldenström
    Abstract: This paper presents a comprehensive analysis of the role of capital taxation in advanced economies with a focus on the Swedish experience. We synthesize the existing theoretical literature, present facts about the capital stock and its distribution, review current capital tax practices and empirical findings regarding their effects on economic activity. The paper also examines the political feasibility of capital taxation by presenting results from a unique attitude survey targeted to a large representative sample of the Swedish population. Finally, we tie together our findings and discuss their implications for tax policy.
    Keywords: optimal taxation, capital taxation, wealth tax, inheritance tax, corporate tax, income equality, wealth inequality, political economy, preferences for redistribution
    JEL: D31 H21 H24
    Date: 2018
  6. By: Phaithun Intakhan (Lampamg Rajbhat University)
    Abstract: The objectives of this research were to study managerial accounting practices of SMEs ceramics, to examined the influence of top management support and accountant competency on successful managerial accounting practices, and to tested the influence of successful managerial accounting practices on decision making effectiveness. The data were collected from 107 accounting managers of SMEs ceramics. The data analysis is conducted with descriptive statistics to find percentage, mean, standard deviation, and inferential statistics analysis with structural equation model. The results showed that SMEs ceramics adaptation 3 highest managerial accounting practices for instance; cost volume profit analysis, cost behavior analysis, cash budget, budget for planning and operation control. The outcome of casual relationship analysis revealed that successful managerial accounting practices had the most direct effect toward decision making effectiveness and followed by top management support had direct effect toward accounting competency. Lastly, top management support had direct and indirect effect on successful managerial accounting practices through accountant competency. The results implied that manager should focus on building accountant competency in order to create successful managerial accounting practice and to get the valuable information for right decision making.
    Keywords: Managerial Accounting Practices, Decision Making Effectiveness, Top Management Support, Accountant Competency
    Date: 2018–04
  7. By: Zhongxia (Shelly) Ye (UTSA)
    Abstract: Cross-selling is an integral component of customer relationship management. Using relevant information to improve customer response rate is a challenging task in cross-selling. Incorporating multitype multiway customer behavioral, including related product, similar customer and historical promotion, data into cross-selling models is helpful in improving the classification performance. Customer behavioral data can be represented by multiple high-order tensors. Most existing supervised tensor learning methods cannot directly deal with heterogeneous and sparse multiway data in cross selling. In this study, two novel ensemble learning methods, multiple kernel support tensor machine (MK-STM) and multiple support vector machine ensemble (M-SVM-E), are proposed for crossselling using multitype multiway data. The MK-STM and the M-SVM-E can also perform feature selections from large sparse multitype multiway data. Based on these two methods, collaborative and non-collaborative ensemble learning frameworks are developed. In these frameworks, many existing classification and ensemble methods can be combined for classification using multitype multiway data. Computational experiments are conducted on two databases extracted from open access databases. The experimental results show that the MK-STM exhibits the best performance and has better performance than existing supervised tensor learning methods.
    Keywords: Audit committees, voluntary disclosures, director elections, auditor ratification
    JEL: M42
    Date: 2018–01–18

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.