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on Accounting and Auditing |
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Issue of 2018‒08‒27
twelve papers chosen by |
| By: | Friska Firnanti (Lecturer Trisakti School of Management, Indonesia. Author-2-Name: Melya Senjaya Author-2-Workplace-Name: Trisakti School of Management, Indonesia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | "Objective – The purpose of this research is to obtain empirical evidence about the factors that affect audit quality for auditors working in Public Accounting Firms in DKI Jakarta. Methodology/Technique – The independent variables used in this research are: independence, work experience, competency, accountability, audit tenure, and audit fee. The object of this research consists of 25 Public Accounting Firms located in DKI Jakarta. There are 164 respondents used as samples in this study. The sample was selected based on a convenience sampling method with criteria including auditors working at public accounting firms located in DKI Jakarta, with a minimum of one year work duration. This research used statistical tests of multiple regression. Findings – The result shows that independence, accountability, and audit tenure have an effect on audit quality. Meanwhile, work experience, competency, and audit fees have no influence on audit quality. Novelty – The study suggests that to improve audit quality, Public Accounting Firms should pay attention to the independence and accountability of its auditors." |
| Keywords: | Audit Quality; Independence; Work Experience; Competency; Accountability; Audit Tenure; Audit Fee. |
| JEL: | M41 M42 |
| Date: | 2017–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:gjbssr484&r=acc |
| By: | Thomas R. Tørsløv; Ludvig S. Wier; Gabriel Zucman |
| Abstract: | By combining new macroeconomic statistics on the activities of multinational companies with the national accounts of tax havens and the world's other countries, we estimate that close to 40% of multinational profits are shifted to low-tax countries each year. Profit shifting is highest among U.S. multinationals; the tax revenue losses are highest for the European Union and developing countries. We show theoretically and empirically that in the current international tax system, tax authorities of high-tax countries do not have incentives to combat profit shifting to tax havens. They instead focus their enforcement effort on relocating profits booked in other high-tax countries—in effect stealing revenue from each other. This policy failure can explain the persistence of profit shifting to low-tax countries despite the high costs involved for high-tax countries. We provide a new cross-country database of GDP, corporate profits, trade balances, and factor shares corrected for profit shifting, showing that the global rise of the corporate capital share is significantly under-estimated. |
| JEL: | F23 H26 H87 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24701&r=acc |
| By: | Ayşe İmrohoroğlu (University of Southern California); Kai Zhao (University of Connecticut) |
| Abstract: | In this paper, we present a model economy that can account for the changes in the current account balance in China since the early 2000s. Our results suggest that the increase in the household saving rate and tighter financial constraints facing the firms played equally important roles in the increase in the current account surplus until 2008. We argue that inadequate insurance through government programs for the elderly and the decline in family insurance due to the one-child policy led to the increase in the household saving rate especially after 2000 as more and more families with only one child entered the economy. The increase in the saving rate coupled with the financial frictions preventing the increased household saving from being invested in domestic firms resulted in large current account surpluses until 2008. Our results also indicate that the decline in the current account surplus since 2008 was likely to be due to the relaxation of financial constraints facing domestic firms, which was a result of the large-scale fiscal stimulus plan launched by the Chinese government after 2008. These findings imply that the planned increases in China’s public pension coverage are likely to reduce the future current account balances. On the other hand, if financial constraints are tightened back to the pre-stimulus levels; the current account surplus may rise again. |
| JEL: | E00 E20 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2018-15&r=acc |
| By: | Yefni (Accounting, Politeknik Caltex Riau, Indonesia Author-2-Name: Atika Zarefar Author-2-Workplace-Name: Politeknik Caltex Riau, Indonesia Author-3-Name: Arumega Zarefar Author-3-Workplace-Name: Universitas Riau, Indonesia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | "Objective – This research aims to identify the effect of good corporate governance ('GCG') factors such as the size of the board, the presence of independent commissioners and audit committees, managerial ownership, and institutional ownership on corporate value (price to book value). This study also uses profitability measured by Return on Assets ('ROA') as moderating variables. Methodology/Technique – The object of this study is plantation companies listed on the Indonesian Stock Exchange (IDX) between 2011 to 2015. The samples are selected by using purposive sampling method. The hypothesis in this study is tested by using multiple linear regression. Findings – There are three variables that significantly influence corporate value. These are independent commissioners, managerial ownership, and institutional ownership. Moreover, profitability does not moderate the relationship between GCG and company value. Novelty – The research is intended to find a relationship between good corporate governance and firm performance among plantation companies." |
| Keywords: | "Audit Committee; Corporate Values; Good Corporate Governance; Independent Commissioner; Institutional Ownership; Managerial Ownership; Price to Book Value; Return on Assets." |
| JEL: | G31 L25 M41 |
| Date: | 2017–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:gjbssr471&r=acc |
| By: | Yu, Ai; Garcia-Lorenzo, Lucia; Kourti, Isidora |
| Abstract: | Intellectual Capital Reporting (ICR) has garnered increasing attention as a new accounting technology that can engender significant organisational changes. However, when ICR was first recognised as a management fashion, the intended change it heralded in stable environments was criticised for having limited impact on the state of practice. Conceiving ICR through a lens predicated on the notion of discursive practice, we argue that ICR can enable substantive change in emergent conditions. We empirically demonstrate this process by following the implementation of ICR in one organisation through interviews, documents and observations over 30 months. The qualitative analysis of the data corpus shows how situated change, subtle but no less significant, can take place in the name of intellectual capital as actors appropriate ICR into their everyday work practices while improvising variations to accommodate different logics of action. The paper opens up a new avenue to examine the specific roles of ICR in relation to the types of change enacted. It thus demonstrates when and how ICR may transcend a mere management fashion and the intended change it sets in motion through altering organisational actors’ ways of thinking and doing within the confines of their organisation. |
| Keywords: | Intellectual Capital Reporting (ICR); Management fashion; Discursive practice; Substantive change; Emergent/situated change |
| JEL: | M40 |
| Date: | 2017–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:69226&r=acc |
| By: | Stephen Wright (Birkbeck, University of London); Charmaine Portelli (University of Malta) |
| Abstract: | The balance sheet of the European Central Bank (ECB) represents a very small fraction (onetenth) of the reported balance sheet of the Euro Area system as a whole. This paper presents evidence that the effective size of the ECB’s balance sheet is massively higher than this, and indeed is significantly higher even than the reported balance sheet of the Eurosystem as a whole. We point to strong evidence that most NCBs (especially those of the larger countries) effectively act on autopilot, as branches of a near-monolithic institution which we term the “Mega-ECB”. The lending behaviour of the “Mega-ECB” appears to have been driven primarily by the borrowing needs of the distressed countries of the EU’s southern periphery. |
| Keywords: | central bank balance sheet, capital key, ECB, Eurosystem, national central canks, Target2. |
| JEL: | E52 E58 F36 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:1807&r=acc |
| By: | Stolowy, Hervé; Paugam, Luc |
| Abstract: | The objective of this study is to investigate how non-financial reporting (NFR) is defined and has expanded in recent years. First, we explore the heterogeneity in definitions and current NFR practices. We find a lack of convergence between regulators and standard-setters, as well as leading sustainable firms. Second, we examine the changes in the extent and type of NFR reported by firms over the period 2006-2016. Based on a sample of firms in South Africa, a leading country in NFR, we document a significant increase in the amount of NFR, particularly between 2006 and 2011. This change appears to be driven by new environmental, human capital, performance and strategic disclosures. The relative importance of financial information in corporate reporting decreased substantially over the same period. Third, we compare reporting practices for corporate social responsibility (CSR)/sustainability information between constituents of the S&P 500 index and the EuroStoxx 600 index. We find that overall, the percentage of firms issuing CSR/sustainability reports increased dramatically between 2002 and 2015 for both stock indices. Constituents of the U.S. stock index and growth firms are less likely to report CSR/sustainability information, whereas firms in the European stock index in environmentally sensitive industries, have high capital intensity and good CSR performance, are larger with better financial performance, are more likely to report CSR/sustainability information. |
| Keywords: | Non-Financial Reporting (NFR); Non-Financial Information (NFI); Integrated Reporting; Corporate Social Responsibility (CSR) Reporting; Sustainability Reporting; Environmental Reporting; Social Reporting |
| JEL: | M41 |
| Date: | 2018–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1262&r=acc |
| By: | Mouritsen, Jan; Pflueger, Dane |
| Abstract: | This is a study of analysts’ use of accounting information for valuation purposes in a venture capital setting. This setting is characterized in terms of the distinctive scouting and coaching work of venture capital funders, and the unproven and incomplete nature of the ventures and entrepreneurs, which seek funding to scale operations, pivot into new markets, internationalize, or undertake some other kind of fundamental change. Based on interviews with entrepreneurs (project-makers) and venture funders (analysts), a four phase model of valuation is proposed. The model illuminates that, in contrast with common assumptions in the existing literature, accounting is mobilized neither to reveal truth nor constitute knowledge about the objects of investment, but to promise and to care. This paper articulates these two concepts in the context of accounting. Promising is shown to be a means not to implement a predesigned business plan and a budgeted set of activities but to commit to a new and unclear future and agree high and sometimes unrealistic expectations. Caring is shown not to be a means to predict a final fate for the organization, but to give and take, interact and sometimes discipline in order to determine what is necessary to preserve and possible to change. Understanding that what is valued is not what exists but what is possible to create helps to resolve puzzles about accounting’s uncertain and ambiguous status and significance in the entrepreneurial economy. It also and more generally illustrates how accounting operates in relation to an unknowable object and future: not as a means to know or reveal but to write and rewrite a daring and ambitious narrative in which the protagonists (here the project-maker and venture) become something else (a manager and an organization). |
| Keywords: | Analysts; Valuation; Qualitative Research; Venture Capital |
| JEL: | C44 M41 |
| Date: | 2018–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1255&r=acc |
| By: | International Monetary Fund |
| Abstract: | This note analyzes macro-financial interlinkages, sectoral dependencies, and potential balance sheet vulnerabilities for all resident sectors. The mission used the sectoral balance sheets compiled by the National Bank of Romania (NBR)2 to map balance sheet exposures and potential contagion channels among different sectors. The construction of intersectoral network maps sheds light on balance sheet vulnerabilities and how these developed over time, potentially leading to risks building up. This analysis helps to understand causes and effects of macro-financial imbalances, provides a coherent context in which net lending and borrowing stocks cover all sectors, and supports the development of remedial policies outlined in other areas of the FSAP. |
| Keywords: | Europe;Romania; |
| Date: | 2018–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:18/162&r=acc |
| By: | Kasahara, Hiroyuki; Sawada, Yasuyuki; Suzuki, Michio |
| Abstract: | This article examines the effect of government capital injections into nancially troubled banks on corporate investment during the Japanese banking crisis of the late 1990s. By helping banks meet the capital requirements imposed by Japanese banking regulation, recapitalization enables banks to respond to loan demands, which could help firms increase their investment. To test this mechanism empirically, we combine the balance sheet data of Japanese manufacturing firrms with bank balance sheet data and estimate a linear investment model where the investment rate is a function of not only firm productivity and size but also bank regulatory capital ratios. We find that the coefficient of the interaction between a firm's total factor productivity measure and a bank's capital ratio is positive and significant, implying that the bank's capital ratio affects more productive firms. Counterfactual policy experiments suggest that capital injections made in March 1998 and 1999 had a negligible impact on the average investment rate, although there was a reallocation effect, shifting investments from low- to high-productivity firms. |
| Keywords: | Capital injection, Bank regulation, Banking crisis |
| JEL: | E22 G21 G28 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rcesrs:dp18-2&r=acc |
| By: | Nuno Paixao (Bank of Canada) |
| Abstract: | I quantify the extent to which deterioration of bank balance sheets explains the large contraction in housing prices and consumption experienced by the U.S. during the last recession. I introduce a Banking Sector with balance sheet frictions into a model of long-term collateralized debt with risk of default. Credit supply is endogenously determined and depends on the capitalization of the entire banking sector. Mortgage spreads and endogenous down payments increase in periods when banks are poorly capitalized. I simulate an increase in the stock of housing and a negative income shock to match the decline in house prices between 2006-2009. The model generates changes in consumption, foreclosures and refinance rates similar to those observed in the U.S. between 2006 and 2009. Changes in financial intermediaries’ cost of funding explain, respectively, 38, 22 and 29 percent of the changes in housing prices, foreclosures and consumption generated by the model. These results show that the endogenous response of banks’ credit supply can partially explain how changes in housing prices affect consumption decisions. I use this framework to analyze the impact of debt forgiveness and banks’ recapitalization to mitigate the drop in housing prices and consumption. I also present empirical evidence that balance sheet mechanism implied by the model was operational during this period. In other words, I show that during the great recession, changes in the real estate prices impacted the balance sheet of the banks that reacted by contracting their mortgage credit supply. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:1017&r=acc |
| By: | Mark Gertler; Simon Gilchrist |
| Abstract: | Since the onset of the Great Recession, an explosion of both theoretical and empirical research has investigated how the financial crisis emerged and how it was transmitted to the real sector. The goal of this paper is to describe what we have learned from this new research and how it can be used to understand what happened during the Great Recession. In the process, we also present some new evidence on the role of the household balance sheet channel versus the disruption of banking. We examine a panel of quarterly state level data on house prices, mortgage debt and employment along with a measure of banking distress. Then exploiting both panel data and time series methods, we analyze the contribution of the house price decline versus the banking distress indicator to the overall decline in employment during the Great Recession. We confirm a common finding in the literature that the household balance sheet channel is important for regional variation in employment. However, we also find that the disruption in banking was central to the overall employment contraction |
| JEL: | E32 E44 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24746&r=acc |