nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2019‒02‒18
seven papers chosen by

  1. Дълготрайните материални и нематериални активи, и стоково-материалните запаси като елементи на счетоводната политика на хотели в България By Georgieva, Daniela
  3. Impact of IAS 39 reclassification on Income Smoothing by European Banks By Ozili, Peterson K
  4. European Banks and Tax Havens: Evidence from Country-by-Country Reporting By Petr Jansky
  5. Why the Norwegian Shareholder Income Tax is Neutral By Södersten, Jan
  6. Going Concern Notes, Downsizing, and Exit By SARUYAMA Sumio; Peng XU
  7. VAT Treatment of the Financial Services: Implications for the Real Economy By Fatih Yilmaz; Ýsmail Baydur

  1. By: Georgieva, Daniela
    Abstract: A main goal of the report is to analyze disclosed data about intangible and tangible assets, and inventories in the accounting policies of 20 hotels, offering accommodation and food services at the territory of Republic of Bulgaria. Subjects of research are the accepted and applied accounting rules and practices regarding the analyzed assets. For the purposes of the analysis, data from officially published financial statements in the Commercial Register from 2014, 2015 and 2016 were used, as well as information from the official websites of the hotels.
    Keywords: accounting policies, hotel, disclosure, development, intangible and tangible assets, inventories.
    JEL: M40 M41 M49
    Date: 2018–12
  2. By: Erwandy, Erwandy; Rahmadoni, Firman
    Abstract: This study aims to investigate the extent to which the experience of the Auditor obtained from the length of work, from the number of audit assignments, and from the number of types of audited regional work unit related to increasing auditor expertise in the auditing field. Expertise (expertise) is the skill of an expert. Experts (experts) are defined as someone who has a certain level of skill or high knowledge in a particular subject obtained from experience or training. By taking a sample of 71 auditors or government internal control apparatus (APIP) at the Inspectorate of Bangka Belitung Islands Province, Bangka Regency Inspectorate and Pangkalpinang City who had carried out inspection assignments. The sampling method in this study uses a non-probability method with purposive sampling with the criteria that some employees in the Provincial Inspectorate, Pangkalpinang City and Bangka Regency who have carried out inspection tasks with auditor reasons will gain experience that has an influence on increasing expertise in the audit field. and using quantitative descriptive analysis by testing the validity, reliability of the classical assumption test (multicollinearity test, heteroscedasticity test, autocorrelation test) and multiple linear regression. The test results show that the experience of the length of work, the amount of training followed, the number of audit assignments and the number of types of Regional Units audited as auditors have a positive and significant influence on expertise.
    Keywords: Public sector auditors, Internal Auditor Experience, Audit Skills
    JEL: M42
    Date: 2018–12
  3. By: Ozili, Peterson K
    Abstract: We examine the impact of the reclassification of IAS 39 on income smoothing using loan loss provisions among European banks. We predict that the strict recognition and re-classification requirements of IAS 139 reduced banks' ability to smooth income using bank securities and derivatives, motivating them to rely more on loan loss provisions to smooth income. Our findings do not support the prediction for income smoothing through loan loss provisions. Also, there is no evidence for income smoothing in the pre- and post-IAS 39 reclassification period. The implication of the findings is that: (i) European banks did not use loan loss provisions to smooth income during the period examined, and rather rely on other accounting numbers to smooth income; (ii) the IASB’s strict disclosure regulation improved the reliability and informativeness of loan loss provision estimates among European banks during the period of analysis.
    Keywords: Earnings Management; Income Smoothing; Loan loss provisions, IFRS, IAS 39; Financial Crises
    JEL: G20 G21 G28 M40 M41 M42 M48
    Date: 2019–02–01
  4. By: Petr Jansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)
    Abstract: Banks in the European Union recently started publicly reporting data on profit, number of employees, turnover and tax on a country-by-country basis. I introduce the largest, hand-collected data set of its kind, which covers almost 50 banks for up to 5 years between 2013 and 2017. I identify the main locations of European bank's profits, which include the largest European economies as well as tax havens. I focus on answering the question of how geographically aligned these profits are with economic activity. I find that some of the tax havens have maintained high shares of profits in contrast with their much lower shares of employees. These results indicate that banks are likely shifting their profits to tax havens, but for the profit shifting to be directly observed, regulators will need to ask banks to publish even better data.
    Keywords: country-by-country reporting; banks; tax havens; profit shifting; financial transparency; European Union
    JEL: F21 F23 G21 G28 H25 H87
    Date: 2018–12
  5. By: Södersten, Jan (Department of Economics)
    Abstract: This note extends the work by Sørensen (2005) and others by demonstrating why the Norwegian Shareholder Income Tax may be neutral between the two sources of equity funds, i.e. new share issues and retained earnings, despite the fact that the retention of earnings to finance new investment does not add to the tax benefits. The analysis crucially relies on the assumption that the deduction for the imputed rate of return is capitalized into the market prices of corporate shares. Absent capitalization, the shareholder tax is rather likely to leave the distortions caused by the double taxation of corporate source income unaffected.
    Keywords: Corporate and shareholder taxation; tax neutrality; cost of capital
    JEL: H24 H25 H32
    Date: 2019–01–29
  6. By: SARUYAMA Sumio; Peng XU
    Abstract: This paper investigates the effect of an accounting standard adopted in March of 2003 that requires management to disclose substantial doubt on the company's ability to continue in a note regarding going concern (GCN) in financial statements. The new requirement provides instructions based on international practice. Consistently, we find that Japanese firms with a GCN are less profitable, more highly leveraged, and smaller than firms without such a GCN, which is quite similar to U.S. firms with a going-concern modified audit opinion. Also, firms that have reached a critical point concerning layoffs, dividend payout regulations, or delisting criteria are more likely to disclose going concern uncertainties. Probably this is aimed to provide information for controlling conflicts of interests among stakeholders. In predicting whether a firm will file for bankruptcy, management's disclosures about going concern status provide statistically and economically significant explanatory power. In terms of the results of the solutions proposed to mitigate disclosed adverse conditions and circumstances, firms with GCNs in their financial statements undertake more aggressive measures in assets, borrowings, and workforce, compared to restructuring efforts of non-GCN firms at critical points of distress. Surviving firms with a GCN tend to experience extended periods of low profitability, although asset turnover improves. Our results are robust in treatment-effect estimators compared with counterfactual outcomes.
    Date: 2019–01
  7. By: Fatih Yilmaz; Ýsmail Baydur
    Abstract: Financial institutions are exempt from the Value-Added Tax in most countries. We develop a general equilibrium model with endogenous firm entry and a banking sector to accommodate three key distortions related to exempt treatment: (i) self-supply bias in the banking sector, (ii) under-taxation of payment services, and (iii) input distortions in the business sector and tax cascading. We calibrate our model to the average of Germany, France and the U.K data. Our results show that repealing exempt treatment always increases tax revenues. However, welfare gains occur only at low VAT rates due to the hump-shaped VAT Laffer curve.
    Keywords: VAT, Financial services, Exempt treatment, Laffer curve, Heterogeneous firms
    JEL: G20 H21 H24 H25 H30
    Date: 2018

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