nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2020‒03‒23
five papers chosen by

  1. Modelling the microfoundations of the audit society: organizations and the logic of the audit trail By Power, Michael
  2. A Closer Look at the Fed’s Balance Sheet Accounting By Jennifer Wolgemuth; Antoine Martin; Deborah Leonard
  3. The Impact of Expectations on IFRS 9 Loan Loss Provisions By Petr Polak; Jiri Panos
  4. Toward a Comprehensive Tax Reform for Italy By Emile Cammeraat; Ernesto Crivelli
  5. Measuring Human Capital By Angrist,Noam; Djankov,Simeon; Goldberg,Pinelopi Koujianou; Patrinos,Harry Anthony

  1. By: Power, Michael
    Abstract: We live in an “audit society” in which performance accounting and auditing requirements continue to expand, despite widespread criticism by academics and practitioners alike. Macro-institutional theories are good at explaining why organizations adopt practices whose efficacy is dubious by appealing to the power of their legitimizing and symbolic properties. Yet these theories are less able to explain how adoption happens and why practices of accounting and auditing persist and amplify, despite being objects of critique. This article addresses this puzzle by supplementing macroinstitutional explanations of the audit society with a microfoundational analysis grounded in a process model. The model theorises the humble notion of the audit trail as a process which not only produces auditable accounts but is also a logic which is formative of organizational actors’ dispositions to reproduce those accounts. The analysis contributes to debates about organizational micro-processes and microfoundations by proposing that this logic of the audit trail is strongly performative of the conditions of its own reproduction and expansion. In explaining the persistence and amplification of the audit society, the model also shows how accounting and auditing are not inherently pathological and value-subverting but may be value-enhancing.
    Keywords: accounting; audit society; audit trail; disposition; facticity; meta-logic; performativity; Selznick
    JEL: M40
    Date: 2019–03–07
  2. By: Jennifer Wolgemuth; Antoine Martin; Deborah Leonard
    Abstract: An earlier post on how the Fed changes the size of its balance sheet prompted several questions from readers about the Federal Reserve?s accounting of asset purchases and the payment of principal by the Treasury on Treasury securities owned by the Fed. In this post, we provide a more detailed explanation of the accounting rules that govern these transactions.
    Keywords: Federal Reserve; Accounting; Balance Sheet
    JEL: E5
  3. By: Petr Polak; Jiri Panos
    Abstract: This paper describes the implementation of the IFRS 9 accounting standard into a macroprudential (top-down) stress-testing framework. It sets out to present a possible way of overcoming data issues and discusses key assumptions which have an effect on the end results and which stress testers should be aware of. According to the results, macroeconomic expectations play a crucial role in the pass-through of impairment. The paper also presents evidence about the pro-cyclicality of the IFRS 9 approach.
    Keywords: IFRS 9, impairments, loan loss provisions, macroprudential policy, stress testing
    JEL: E44 E62 G01 G21
    Date: 2019–12
  4. By: Emile Cammeraat; Ernesto Crivelli
    Abstract: This paper evaluates elements of a comprehensive reform of the Italian tax system. Reform options are guided by the principles of reducing complexity, broadening the tax base, and lowering marginal tax rates, especially the tax burden on labor income. The revenue and distributional implications of personal income and property tax reforms are assessed with EUROMOD, while a microsimulation model is developed to evaluate VAT reform options. Simulations suggest that a substantial reduction in the tax burden on labor income can be obtained with a revenue-neutral base-broadening reform that streamlines tax expenditures and updates the property valuation system. In addition, a comprehensive reform would benefit low- and middle-income households the most, by lowering significantly their overall current tax liability, which results in increased progressivity of the tax system.
    Date: 2020–02–21
  5. By: Angrist,Noam; Djankov,Simeon; Goldberg,Pinelopi Koujianou; Patrinos,Harry Anthony
    Abstract: Students around the world are going to school but are not learning -- an emerging gap in human capital formation. To understand this gap, this paper introduces a new data set measuring learning in 164 countries and territories. The data cover 98 percent of the world's population from 2000 to 2017. The data set will be publicly available and updated annually by the World Bank. The paper presents several stylized facts in a first application of the data: (a) although enrollment has increased worldwide, learning has stagnated; (b) girls outperform boys on learning -- a positive gender gap -- in contrast to a negative gender gap observed for schooling; (c) learning is associated with growth on a global scale; (d) associations with growth are heterogenous; and (e) human capital accounts for up to a third of cross-country income differences -- a middle ground in the recent development accounting literature. These stylized facts demonstrate the potential of the data to reveal new insights into the relationship between human capital and economic development.
    Keywords: Inequality,Gender and Development,Social Capital,Global Environment,Coastal and Marine Resources,Energy and Natural Resources
    Date: 2019–02–14

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