nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2018‒07‒09
five papers chosen by

  1. Review on tax research in accounting: Is the information given by U.S. GAAP income taxes also provided by IFRS? By Frey, Lisa; Engelhard, Lisa
  2. The development of Chinese accountingand bookkeeping before 1850:insights from the Tŏng Tài Shēngbusiness account books (1798-1850) By Yuan, Weipeng; Macve, Richard; Ma, Debin
  3. Using IRS Audit Data to Identify Income Shifting to Foreign Affiliates By De Simone, Lisa; Mills, Lillian F.; Stomberg, Bridget
  4. IFRS 11 und 12 - Fluch oder Segen für die Finanzberichterstattung der Kooperationspartner? Erste Ergebnisse aus der Analyse der Eigenkapitalkostenentwicklung der Unternehmen des deutschen Prime Standards By Wolf, Robin Paul
  5. EU financial services policy since 2007: crisis, responses and prospects By Nicolas Véron

  1. By: Frey, Lisa; Engelhard, Lisa
    Abstract: In this paper, we present a review of tax research in accounting. We outline U.S. GAAP accounting rules for the following four income tax notes and survey the area of research literature dealing with the information content provided by U.S. GAAP: (1) unrecognized tax benefits, (2) valuation allowances, (3) foreign earnings designated as permanently reinvested, and (4) book-tax differences. Building on this, we present the accounting rules for comparable income tax notes following IFRS standards and offer which we believe are interesting avenues for future research on the information on tax notes provided by IFRS financial statements.
    Keywords: UTB,valuation allowance,permanently reinvested earnings,book-tax difference,U.S. GAAP,IFRS,tax notes
    JEL: M40 M41 M48 H20
    Date: 2017
  2. By: Yuan, Weipeng; Macve, Richard; Ma, Debin
    Abstract: Claims have repeatedly been made for the importance of double-entry bookkeeping (‘DEB’) for capitalism’s development in the West, so it is valuable to explore the book-keeping and accounting practices of economically successful organizations elsewhere. Our paper reports our exploration into the original account books contained in the archive of Tŏng Tài Shēng (‘TTS’), a substantial Chinese ‘grocery / merchant-banking’ business whose surviving books span a period from the late 18th century to the middle of the 19th century. The TTS archive is the most complete and integrated surviving merchant archive from before China’s forced opening to the West in the mid-19th century. Our findings about its accounting processes and records (of which we give illustrations) shed critical light on the nature of indigenous Chinese bookkeeping and business organization and on the larger questions about Chinese commercial culture and the path of its development, for comparison with those about the West. We find no evidence in the surviving account books of TTS to support previous arguments in the literature that at this period Chinese accounting practice for successful businesses (must have) had its own 'Chinese double entry bookkeeping' ('CDEB') comparable to Western DEB.
    Keywords: Chinese accounting archives of late Qīng era; Chinese business history; Sūzhōu măzì; double-entry bookkeeping (DEB)
    JEL: N0 M40
    Date: 2017–06–07
  3. By: De Simone, Lisa (Stanford University); Mills, Lillian F. (University of Texas); Stomberg, Bridget (Indiana University)
    Abstract: We use confidential Internal Revenue Service (IRS) data on the magnitude of U.S.-foreign intercompany transactions to develop a financial statement-based measure of the likelihood that U.S. multinational entities (MNEs) make net intercompany payments out of the U.S. Descriptive analysis shows that although sample firms report net inbound intercompany payments on average, high tech firms and small firms report average net outbound payments. The determinants of net outbound payments vary with size, but the likelihood that a firm reports net outbound payments is positively related to high tech operations and income tax incentives across all firms. Supplemental analyses show that firms with net outbound payments have historically not been more likely to be audited or assessed additional taxes upon IRS audit. Our study provides a validated measure based on publicly available data that researchers, investors, and policymakers can use to infer a substantial form of income shifting.
    Date: 2017–08
  4. By: Wolf, Robin Paul
    Abstract: Im Jahr 2013 wurden die internationalen Rechnungslegungsstandards zur Abbildung von Gemeinschaftsunternehmen unter der Grundannahme angepasst, dass "[...] a change in financial reporting requirements might affect the cost of capital for individual entities by changing the [...] level of information asymmetry [...]" (IASB (2011), S. 3). Während IAS 31 ein Wahlrecht zwischen Quotenkonsolidierung oder at-Equity Bilanzierung eröffnete, vereinheitlicht IFRS 11 die Berichterstattung zur at-Equity Bilanzierung, begleitet durch Anhangangaben nach IFRS 12. Die Untersuchung von Unternehmen des deutschen Prime Standards zeigt, dass unter IAS 31 quotal konsolidierende Unternehmen vor Einführung der Änderungen nicht von niedrigeren Eigenkapitalkosten profitierten. Ihre Eigenkapitalkosten haben sich mit Einführung von IFRS 11 und 12 gegenüber durchweg at-Equity bilanzierenden Unternehmen zudem weiter erhöht, auch wenn die Eigenkapitalkosten letzterer Unternehmen ebenfalls gestiegen sind. Bezogen auf das Untersuchungsobjekt fällt die Bilanz der Einführung von IFRS 11 und 12 für die Finanzberichterstattung der Kooperationspartner somit insgesamt negativ aus.
    Keywords: Gemeinschaftsunternehmen,joint venture,IAS 31,IFRS 11,IFRS 12,at-equity Bilanzierung,Quotenkonsolidierung,Eigenkapitalkosten,equity method,proportionate consolidation,cost of equity capital
    Date: 2018
  5. By: Nicolas Véron
    Abstract: This paper has been first published in Global Policy Volume 9, Supplement 1, June 2018, and available here. It is republished by Bruegel with permission. This paper presents a holistic description and assessment of the European Union’s financial services policy since the start of financial crisis in mid-2007. The decade-long sequence is divided into four themes, in broadly chronological order - the initial reaction to the 2007-08 financial shock; subsequent initiatives framed by political developments at the EU and G20 level; the banking union from mid-2012; and more recent events centred on the United Kingdom vote to exit the EU (Brexit). The analysis identifies banking union as the watershed moment, and correspondingly assesses the EU policy response as mostly inadequate in the first half and mostly effective in the second half of the period covered. Recommendations for future reforms are made in the conclusion. Key recommendations - Complete the task of breaking the bank-sovereign vicious circle in the euro area with a reform package that includes a European Deposit Insurance Scheme that equally protects all insured deposits, the introduction of sovereign concentration charges to reduce the home bias in banks’ sovereign exposures, and the phasing out of national authorities’ ability to ring-fence banks’ capital and liquidity. Move towards a simpler, ‘twin-peaks’ architecture for financial supervision in the European Union with a strengthening of the governance and funding of the European Securities and Markets Authority and an expansion of its scope of direct responsibility over financial business conduct. A long-haul effort of further harmonisation in both banking and non-bank activities (banking union and capital markets union) to move closer to the vision of a single market for financial services, including areas such as accounting, auditing, insolvency legislation and investment taxation.
    Date: 2018–06

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.