nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2019‒07‒15
four papers chosen by

  2. Research and development activities in Belgium: A snapshot of past investment for the country’s future By Saskia Vennix
  3. Estimation methods for computing a branch’s total value added from incomplete annual accounting data By Stijn Vansteelandt; François Coppens; Dries Reynders; Mario Vackier; Laurent Van Belle
  4. The Syntax of the Accounting Language: A First Step By Frederico Botafogo

  1. By: Sneha Master
    Abstract: Internet has brought technological innovations at a rapid pace. As an aid to the accounting firms and professional service organizations Cloud Accounting has brought about unquestionable benefits to various industries across the globe . Cloud Accounting enhances the velocity with which applications are deployed, brings out innovation, lowers cost and also makes the business agile. Many companies like Facebook, Google & Amazon have implemented this technology in their business module which enables the organizations to manage their perfect portfolio. The main aim of this paper is to examine and analyze the pros and cons of this technology, its operational module and its benefits for the purpose of accounting and financial reports. Key Words:Cloud, Cloud Computing , Cloud Accounting Policy
    Date: 2018–12
  2. By: Saskia Vennix (NBB, Microeconomic Information Department)
    Abstract: Recent changes in the accounting legislation regarding the accounting and disclosure of research and development (R&D) expenditure in the financial statements have triggered this research on the importance of this kind of activities and their impact at microeconomic level. Using survey data, a solid sample of 1,964 R&D companies was compiled. Based on this sample, some of the main characteristics of R&D firms are presented, such as sector of activity, age, geographic location, etc. In 2016, these 1,964 R&D entities together employed nearly 279,000 people and generated € 45 billion of value added, which represents 6 % of Belgium’s domestic employment and 10.6 % of the country’s gross domestic product. By means of statistical echniques, the microeconomic impact of R&D efforts on average annual growth of value added, average annual employment growth and average annual growth of labour productivity is investigated. Following this research, the conclusion is that R&D investment has generally had a positive impact on average annual growth of value added and average annual employment growth for periods of four years or longer. In a shorter timespan (less than four years), such a positive impact of R&D involvement could not be demonstrated. For the average annual growth of labour productivity, no evidence of any difference between the R&D and the non-R&D group was found.
    Keywords: microeconomic data, corporate R&D, firm performance, employment, value added, Belgian firms.
    JEL: D22 J21 L25 O33
    Date: 2019–07
  3. By: Stijn Vansteelandt (Belgium and London School of Hygiene and Tropical Medicine, U.K.); François Coppens (National Bank of Belgium); Dries Reynders (Ghent University); Mario Vackier (National Bank of Belgium); Laurent Van Belle (Ghent University)
    Abstract: Timely monitoring of the economic performance of a particular sector is generally hindered by the fact that not all companies have deposited their annual accounts by the time that an evaluation is made. In view of this, we develop several imputation strategies that each enable predicting a company’s value added based on available information from past and current years for those companies where the value added was not timely reported. For each proposed strategy we discuss the assumptions which must be fulfilled for unbiased estimation and calculate the estimation uncertainty. In particular, the proposed imputation procedures all rely on an assumption of missing at random, namely that the values added in companies that did not yet deposit their annual accounts are similar (in some way) to those in companies with the same characteristics (e.g. the same historical data) that did deposit their accounts by the evaluation date. We show how to retrospectively assess the validity of this assumption, and how to adjust the imputation procedure in case the assumption fails. The importance of the availability of the uncertainty margins should not be underestimated because they will result in faster and higher quality publications. Finally we retrospectively apply each strategy to data from the Belgian Port sector and compare their performance at several evaluation dates. All the proposed methods show good results on these data. The method using (ordinary least squares) regression is preferred because it is very flexible in the use of auxiliary variables, requires weaker assumptions, has smaller estimation uncertainty and is easily automatable.
    Date: 2019–04
  4. By: Frederico Botafogo
    Abstract: We review and interpret two basic propositions published by Ellerman (2014). The propositions address the algebraic structure of T accounts and double entry bookkeeping (DEB). The paper builds on this previous contribution with the view of reconciling the two, apparently dichotomous, perspectives of accounting measurement: the one that focuses preferably on the stock of wealth and to the one that focuses preferably on the flow of income. The paper claims that T-accounts and DEB have an underlying algebraic structure suitable for approaching measurement from either or both perspectives. Accountants preferences for stocks or flows can be framed in ways which are mutually consistent. The paper is a first step in addressing this consistency issue. It avoids the difficult mathematics of abstract algebra by applying the concept of syntax to accounting numbers such that the accounting procedure qualifies as a formal language with which accountants convey meaning.
    Date: 2019–06

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