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on Accounting and Auditing |
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Issue of 2019‒02‒11
eleven papers chosen by |
| By: | International Monetary Fund |
| Abstract: | The CBS has taken steps to establish important pillars of a proper policy framework for financial reporting, auditing, and internal controls by approving the Internal Audit and Audit Committee Charters and is committed to address the remaining shortcomings in these areas. The Internal Audit Department (IAD) has made progress by initiating risk assessments of the various CBS business units and recruiting an Information Technology (IT) professional to join the team. The Accounting and Finance Department (AFD) is making progress in implementing accrual accounting, and accounting for foreign exchange operations (International Accounting Standard (IAS) 21), and has created a new role of Reconciliation Officer to ensure all cash transactions are recorded properly. However, the IAD functions without a director, which places the internal audit staff at a severe disadvantage to other departments and limits their authority to effectively implement their program. Also, while the mission team has stressed the importance of adopting International Financial Reporting Standards (IFRS) during this mission and the previous mission, the CBS has not formally indicated that it will adopt this framework.2 High priority recommendations were made to address these shortcomings. See Table 1 for homework assignments and high priority tasks.3 |
| Date: | 2019–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/22&r=all |
| By: | International Monetary Fund |
| Abstract: | At the request of the National Institute of Statistics and Censuses (INDEC), a technical-assistance mission on external-sector statistics (ESS) visited Buenos Aires on November 14–25, 2016. Currently, INDEC’s National Directorate for International Accounts (DNCI) compiles and disseminates ESS following the guidelines of the fifth edition of the Balance of Payments Manual. The mission reviewed the ESS methodology, data sources, and dissemination policy in order to help enhance its quality and to assist compilers in migrating the methodology to the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6). The main data sources used to compile the current account and the capital account (excluding investment income, which is compiled along with the financial account and the IIP) are customs records, corporate surveys, the international-tourism survey, accounting information available to the public, administrative records, and information concerning the exchange balance disseminated by the Central Bank of Argentina (BCRA). The mission found data sources and compilation procedures to be sound. Although the mission identified improvements that could add to the quality of certain estimates, the balances of the current and capital accounts are expected to remain substantially unchanged. |
| Date: | 2019–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/19&r=all |
| By: | Congressional Budget Office |
| Abstract: | In this report, CBO examines corporate tax rates—the statutory rates, as well as average and effective marginal rates—and the factors that affect them for the United States and other G20 countries. In 2012, the U.S. top statutory corporate tax rate was 39.1 percent with state taxes included, making it the highest in the G20. The average and effective corporate tax rates in the United States were lower—at 29 percent (third in the G20) and 19 percent (fourth in the G20), respectively. |
| JEL: | F23 H20 H25 |
| Date: | 2017–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:52419&r=all |
| By: | Thiess Büttner; Carolin Holzmann |
| Abstract: | This paper explores empirically whether and how FDI is affected if multinationals’ home countries change taxation of foreign earnings by switching from worldwide to territorial taxation. Our analysis employs data for German inbound FDI based on the ultimate investing country concept. We use a quasi-experimental approach and provide counterfactuals using the synthetic-control method. Our results confirm effects of the switch from worldwide to territorial taxation on FDI but point at the importance of the actual tax rate. For Japan, which charges a higher tax rate on corporate profits than Germany, we find a substantial increase of FDI in Germany after the switch from worldwide to territorial taxation. For the UK, which imposes a lower tax rate than Germany, the switch to territorial taxation is not found to exert any significant effects on investment in Germany. |
| Keywords: | FDI, double taxation, dividend exemption, tax competition, synthetic-control method, ultimate investor country |
| JEL: | H25 F23 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7462&r=all |
| By: | Shafik Hebous; Alexander D Klemm; Saila Stausholm |
| Abstract: | We estimate the revenue implications of a Destination Based Cash Flow Tax (DBCFT) for 80 countries. On a global average, DBCFT revenues under unchanged tax rates would remain similar to the existing corporate income tax (CIT) revenue, but with sizable redistribution of revenue across countries. Countries are more likely to gain revenue if they have trade deficits, are not reliant on the resource sector, and/or—perhaps surprisingly—are developing economies. DBCFT revenues tend to be more volatile than CIT revenues. Moreover, we consider the revenue losses resulting from spillovers in case of unilateral implementation of a DBCFT. Results suggest that these spillover effects are sizeable if the adopting country is large and globally integrated. These spillovers generate strong revenue-based incentives for many—but not all—other countries to follow the DBCFT adoption. |
| Date: | 2019–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/7&r=all |
| By: | R. G Gelos; Tommaso Mancini Griffoli; Machiko Narita; Federico Grinberg; Umang Rawat; Shujaat Khan |
| Abstract: | Has monetary policy in advanced economies been less effective since the global financial crisis because of deteriorating household balance sheets? This paper examines the question using household data from the United States. It compares the responsiveness of household consumption to monetary policy shocks in the pre- and post-crisis periods, relating changes in monetary transmission to changes in household indebtedness and liquidity. The results show that the responsiveness of household consumption has diminished since the crisis. However, household balance sheets are not the culprit. Households with higher debt levels and lower shares of liquid assets are the most responsive to monetary policy, and the share of these households in the population grew. Other factors, such as economic uncertainty, appear to have played a bigger role in the decline of households’ responsiveness to monetary policy. |
| Date: | 2019–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/11&r=all |
| By: | International Monetary Fund |
| Abstract: | At the request of the National Statistics and Census Institute (INDEC), a technical assistance mission on external sector statistics (ESS) visited Buenos Aires during April 17–28, 2017. This was a follow up to the November 2016 mission that evaluated the ESS methodology, information sources, and dissemination policy and made recommendations to improve quality, adapt the production of ESS to the methodology provided by the Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6), and support the quarterly compilation and dissemination of the International Investment Position (IIP) in accordance with the Special Data Dissemination Standards (SDDS). The mission reviewed the implementation status of the tasks identified in the action plan prepared by the November 2016 mission; assisted compilers in preparing quarterly ESS in accordance with BPM6 guidelines for the next quarterly publication; and provided practical advice on the methodology to be used. |
| Date: | 2019–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/18&r=all |
| By: | International Monetary Fund |
| Abstract: | Senegal is the first country in sub-Saharan Africa with a Francophone approach to public financial management to volunteer for a fiscal transparency evaluation (FTE). This evaluation applies the standards and practices established in the IMF’s Fiscal Transparency Code (the Code), adopted in 2014. The Code is built around three pillars: (I) Fiscal Reporting; (II) Fiscal Forecasting and Budgeting; and (III) Fiscal Risk Analysis and Management. Altogether it assesses compliance with 36 FTE principles. Pillar I requires that fiscal reporting provide a thorough, relevant, current and reliable picture of general government fiscal outcomes. Pillar II requires budgets, and the macroeconomic forecasts they rely on, to spell out the fiscal objectives and policies targeted by the government; and that they provide comprehensive and credible projections of fiscal trends. Pillar III addresses the need to communicate, analyze and manage fiscal vulnerabilities and to ensure effective coordination of the public sector decision-making process. To take countries’ varying degrees of institutional capacity into account, the Code differentiates between basic, good, and advanced practices for each principle. If the basic level is not attained, the practice is regarded as ”not met.” |
| Date: | 2019–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/34&r=all |
| By: | Joelle Noailly; Roger Smeets |
| Abstract: | The objective of this study is to examine the impact of firms’ financing constraints on innovation activities in renewable (REN) versus fossil-fuel (FF) technologies. Our empirical methodology relies on the construction of a firm-level dataset for 1,300 European firms over the 1995-2009 period combining balance-sheet information linked with patenting activities in REN and FF technologies. We estimate the importance of the different types of financing (e.g. cash flow, long-term debt, and stock issues) on firms’ patenting activities for the different samples of firms. We use count estimation techniques commonly used for models with patent data and control for a large set of firm-specific controls and market developments in REN and FF technologies. We find evidence for a positive impact of internal finance on patenting activities for the sample of firms specialized in REN innovation, while we find no evidence of this link for other firms, such as firms conducting FF innovation or large mixed firms conducting both REN and FF innovation. Hence, financing constraints matter for firms specialized in REN innovation but not for other firms. Our results have important implications for policymaking as the results emphasize that small innovative newcomers in the field of renewable energy are particularly vulnerable to financing constraints. |
| Keywords: | R&D;.; Financing constraints; renewable energy |
| JEL: | O14 O33 Q41 Q42 |
| Date: | 2019–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:gii:ciesrp:cies_rp_58&r=all |
| By: | Steffen Andersen; Philippe d'Astous; Jimmy Martínez-Correa; Stephen H. Shore |
| Abstract: | We study consumers’ responses to removing a saving constraint. Mortgage run-offs predictably relax a saving constraint for borrowers whose mortgage committed them to save by paying down principal. Using the entire Danish population, we identify mortgages on track to run off between 1995 and 2014. We measure the effect of run-offs on earnings and the household balance sheet. We find that borrowers use 39 percent of previous mortgage payments to decrease labor income, and use 53 percent to pay down other debts. Borrowers run up non-mortgage debt prior to the run-off and this run-up stops once the mortgage is repaid. |
| Keywords: | earnings, savings, mortgage run-off |
| JEL: | E21 G21 J01 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:rsi:irersi:1&r=all |
| By: | Kim, Kyungmin (Federal Reserve Board); Martin, Antoine (Federal Reserve Bank of New York); Nosal, Ed (Federal Reserve Bank of Atlanta) |
| Abstract: | Large-scale asset purchases by the Federal Reserve as well as new Basel III banking regulations have led to important changes in U.S. money markets. Most notably, the interbank market has essentially disappeared with the dramatic increase in excess reserves held by banks. We build a model in the tradition of Poole (1968) to study whether interbank market activity can be revived if the supply of excess reserves is decreased sufficiently. We show that it may not be possible to revive the market to precrisis volumes due to costs associated with recent banking regulations. Although the volume of interbank trade may initially increase as excess reserves are decreased from their current abundant levels, the new regulations may engender changes in market structure that result in interbank trading being completely replaced by nonbank lending to banks when excess reserves become scarce. This nonmonotonic response of interbank trading volume to reductions in excess reserves may lead to misleading forecasts about future fed funds prices and quantities when/if the Fed begins to normalize its balance sheet by reducing excess reserves. |
| Keywords: | interbank market; monetary policy implementation; balance sheet costs |
| JEL: | E42 E58 |
| Date: | 2018–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2018-13&r=all |