nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2021‒01‒25
seventeen papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Accounting Standards and Insurer Solvency Assessment By Peter Windsor; Jeffery Yong; Michelle Chong-Tai Bell
  2. Financial reporting under economic policy uncertainty By Ozili, Peterson K
  3. Maldives; Technical Assistance Report-Reform Options to Strengthen Tax Policy By International Monetary Fund
  4. Expected Credit Loss Modeling from a Top-Down Stress Testing Perspective By Marco Gross; Dimitrios Laliotis; Mindaugas Leika; Pavel Lukyantsau
  5. Are incomes and property taxes effective instruments for tax transition? By Kodjo Adandohoin; Jean-Francois Brun
  6. Report on the Observance of Standards and Codes on Accounting and Auditing By World Bank
  7. Switzerland; Financial Sector Assessment Program; Technical Note-Selected Issues on Banking Supervision By International Monetary Fund
  8. Ireland; Selected Issues By International Monetary Fund
  9. Global Firms, National Corporate Taxes: An Evolution of Incompatibility By Shafik Hebous
  10. Land value appraisal using statistical methods By Kolbe, Jens; Schulz, Rainer; Wersing, Martin; Werwatz, Axel
  11. Comfort in Floating: Taking Stock of Twenty Years of Freely-Floating Exchange Rate in Chile By Elías Albagli; Mauricio Calani; Metodij Hadzi-Vaskov; Mario Marcel; Luca A Ricci
  12. Изследване на дигиталните умения на счетоводителите в качеството им на потребители на информационни и комуникационни технологии By Георгиева, Даниела
  13. Bankruptcy prediction using disclosure text features By Sridhar Ravula
  14. The Bahamas; Financial Sector Assessment Program-Detailed Assessment of Observance of Basel Core Principles for Effective Banking Supervision By International Monetary Fund
  15. Republic of Armenia; Selected Issues By International Monetary Fund
  16. El Salvador; 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for El Salvador By International Monetary Fund
  17. Switzerland; Financial System Stability Assessment By International Monetary Fund

  1. By: Peter Windsor; Jeffery Yong; Michelle Chong-Tai Bell
    Abstract: The paper explores the use of accounting standards for insurer solvency assessment in the context of the implementation of IFRS 17. The paper is based on the results of a survey of 20 insurance supervisors. Overall, IFRS 17 is a welcome development but there will be challenges of implementation. Not many insurance supervisors currently intend to use IFRS 17 as a basis for solvency assessment of insurers. Perceived shortcomings can be overcome by supervisors providing clear specifications where the principles-based standard allows a range of approaches. Accounting standards can provide a ready-made valuation framework for supervisors developing new solvency frameworks.
    Keywords: International Financial Reporting Standards;Insurance companies;Accounting standards;Insurance;Solvency;WP,insurance contract,insurance supervisor,impact study,insurance liability,measurement approach,solvency position
    Date: 2020–07–31
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/146&r=all
  2. By: Ozili, Peterson K
    Abstract: In this paper, I discuss financial reporting under economic policy uncertainty. This paper is one of the first papers to relate economic policy uncertainty to financial reporting behaviour. It identifies the link between economic policy uncertainty and financial reporting in terms of earnings management and fair value accounting. It argues that high economic policy uncertainty will transmit fewer new information to firms which can motivate managers to influence accounting numbers in the direction of the desired financial reporting outcome. The discussion in the paper adds to our understanding of how economic conditions affect financial reporting outcomes.
    Keywords: economic policy uncertainty, financial reporting, accrual, accounting quality, policy uncertainty; loan loss provisions, earnings management, fair value accounting.
    JEL: E51 E58 E59 M40 M41 M42 M48
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:105089&r=all
  3. By: International Monetary Fund
    Abstract: This report reviews tax policy in the Maldives and identifies reform options to support efficiency, equity, and revenue. The absence of a broad-based personal income tax (PIT) generates revenue leakages and significantly diminishes the role of tax policy in income redistribution. A modern tax design requires a holistic view of the taxation of different sources of income and different legal forms of taxpayers to maintain tax neutrality, to the extent possible, while preserving some degrees of progressivity, simplicity, and administrability. Moreover, updating the tax system to cope with recent international developments is vital to safeguard revenues. While strengthening the goods and services tax (GST) can raise revenues in the short- to medium-term, a property tax is an important option for the long-term. The diagram below demonstrates reform priorities, as identified in this report, to modernize tax policy in the Maldives.
    Keywords: Double taxation;Personal income;Value-added tax;Revenue administration;Income and capital gains taxes;ISCR,CR,tax treatment,progressive tax,goods and services tax,property tax,tax rate
    Date: 2019–07–01
    URL: http://d.repec.org/n?u=RePEc:imf:imfscr:2019/196&r=all
  4. By: Marco Gross; Dimitrios Laliotis; Mindaugas Leika; Pavel Lukyantsau
    Abstract: The objective of this paper is to present an integrated tool suite for IFRS 9- and CECL-compatible estimation in top-down solvency stress tests. The tool suite serves as an illustration for institutions wishing to include accounting-based approaches for credit risk modeling in top-down stress tests.
    Keywords: International Financial Reporting Standards;Stress testing;Stocks;Loans;Banking;WP,transition matrix,financial asset,balance sheet
    Date: 2020–07–03
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/111&r=all
  5. By: Kodjo Adandohoin (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Jean-Francois Brun (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper investigates second wave tax transition (transfer of tax pressure from border taxation towards domestic taxation) concerns in developing countries. It essentially focuses on the compensation effects of incomes and property taxes over international trade tax revenue losses in developing countries. Using a generalized method of moment estimator, we come to the evidence that, incomes and property taxes are poor instruments to balance trade tax revenue losses of trade liberalization in these countries. However, a mediating effect of financial development in the compensation nexus driven by corporate income taxes was found. We explain this result by the fact that the use of financial sector generates paper trails to government in order to enforce and raise corporate income taxes. Financial development may progressively crowd‐out informal sector and leads to business formalization. Surprising, we do not find any mediating effect of financial development in the compensation patterns with personal income taxes. Nevertheless, some heterogeneities were discovered. Financial development mediates the compensation patterns of personal income taxes in Latin American countries, while the effect holds on corporate income taxes in African countries. We conclude the paper by highlighting the important role of financial development in second generation tax transition concerns over developing countries.
    Keywords: Income taxes,Property tax,Developing countries
    Date: 2020–12
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03053683&r=all
  6. By: World Bank
    Keywords: Finance and Financial Sector Development - Banks & Banking Reform Finance and Financial Sector Development - Financial Regulation & Supervision Finance and Financial Sector Development - Insurance & Risk Mitigation Finance and Financial Sector Development - Mutual Funds Private Sector Development - Corporate Data and Reporting
    Date: 2019–07
    URL: http://d.repec.org/n?u=RePEc:wbk:wboper:33305&r=all
  7. By: International Monetary Fund
    Abstract: Financial Sector Assessment Program; Technical Note-Selected Issues on Banking Supervision
    Keywords: Banking;Auditing;External audit;Bank supervision;Financial Sector Assessment Program;ISCR,CR,FINMA staff,internal audit,process FINMA review,risk specialist,FINMA supervisor,human-resources policy
    Date: 2019–06–26
    URL: http://d.repec.org/n?u=RePEc:imf:imfscr:2019/184&r=all
  8. By: International Monetary Fund
    Abstract: This Selected Issues paper examines the past and present impact of personal income tax reform in Ireland. Personal income in Ireland is taxed under two distinct schemes. Changes in Ireland’s personal income taxation have been procyclical and created vulnerabilities to public finances. The reduction in personal income taxes during the boom has been broad based, albeit more for low-income taxpayers. With somewhat shrinking corporate profits during the crisis, personal income taxation was increased. The reformed income tax would reduce the vulnerability of public finances to interplay of corporate (CIT) revenues and reduce procyclicality. A robust, stable income tax system performs a stabilizing role over the business cycle, while the additional CIT revenues during booms could be saved as buffers to be used for smoothing downturns or to reduce the still high public debt. Post-2014, income taxes have been reduced again, fueling the recovery in domestic demand. The Income Tax could be further amended to enhance incentives to work, while safeguarding the progressivity of the system.
    Keywords: Income tax systems;Personal income tax;Personal income;Mutual funds;Financial sector;ISCR,CR,income tax,asset,tax rate,Ireland,payer
    Date: 2019–06–17
    URL: http://d.repec.org/n?u=RePEc:imf:imfscr:2019/165&r=all
  9. By: Shafik Hebous
    Abstract: How did the rise of multinational enterprises (MNEs) put pressure on the prevailing international corporate tax framework? MNEs, and firms with market power, are not new phenomena, nor is the corporate income tax, which dates to the early 20th century. This prompts the question, what is distinctly new (about multinational enterprises)—if anything—that has triggered unprecedented recent concerns about vulnerabilities in international tax arrangements and the taxation of MNEs? This paper presents a set of empirical observations and a synthesis of strands of the literature to answer this question. A key message is that MNEs of the 21st century operate differently from prior periods and have evolved to become global firms—with important tax ramifications. The fragility of international tax arrangements was present at the outset of designing international tax rules, but the challenges have drastically intensified with the global integration of business, the increased trade in hard-to-price services and intangibles, and the rapid growth of the digital economy.
    Keywords: Corporate income tax;Foreign direct investment;Double taxation;Tax incentives;Trade in services;WP,company,multinational enterprise,conduit company,holding company,business organization
    Date: 2020–09–04
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/178&r=all
  10. By: Kolbe, Jens; Schulz, Rainer; Wersing, Martin; Werwatz, Axel
    Abstract: The taxation of property based on market values requires frequent appraisals for a large number of properties. In light of the recent property tax reform discussion in Germany, it has been argued that a valuebased tax therefore cannot be implemented at a reasonable cost. In several other countries, however, mass appraisal systems based on statistical methods are used for property tax assessments. In this paper, we show how this could in principle be done in Germany, using transactions data that local surveyor commissions are obliged to collect by law. We discuss the regression techniques for estimating land values from such data and illustrate them by applying them to data from Berlin, Germany. We find that the methods are capable of producing land value estimates that match up well with expert based assessments.
    Keywords: land value,mass appraisal,nonparametric regression,semiparametric regression
    JEL: C14 C21 H10 H20 R32 R51 R52
    Date: 2019
    URL: http://d.repec.org/n?u=RePEc:zbw:forlwp:072019&r=all
  11. By: Elías Albagli; Mauricio Calani; Metodij Hadzi-Vaskov; Mario Marcel; Luca A Ricci
    Abstract: Chile offers an example of a country that has overcome the fear of floating by reducing balance sheet mismatches, enhancing financial market development, as well as improving monetary, fiscal, and political institutions, and strengthening policy credibility. Under the floating regime, Chile’s economic adjustment to external shocks appears significantly improved, and its exchange rate pass-through has substantially declined. Our results reinforce the case that moving to a clear and credible floating regime can be associated with a reduction in the fear of floating via economic transformation (like smaller balance sheet mismatches, a larger hedging market, and a lower exchange rate pass-through).
    Keywords: Financial crises;Exchange rates;Financial statements;Currencies;Exchange rate arrangements;WP,firm,FX exposure,balance sheet,nominal exchange rate
    Date: 2020–06–19
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/100&r=all
  12. By: Георгиева, Даниела
    Abstract: Основна цел на разработката е да се очертаят притежаваните технологични умения на счетоводителите, като основополагащи за изграждане на дигитални компетенции. Следва да се отбележи, че дигиталните знания и умения са в причинно-следствена зависимост с основните функции и задачи, които следва да изпълнява счетоводния персонал. За постигане на изведената авторова цел са поставени следните изследователски задачи: - Да се предложат необходими основни дигитални компетенции за изпълнение на задачи с организационно-техническо естество, при които счетоводителят е потребител на използваните от предприятията информационно-телекомуникационни технологии (ИКТ). - Да се направи анализ на мненията на счетоводители относно степента на владеене (основно, самостоятелно, свободно) на някои основни е-умения. - Да се анализира наличието на статистически връзки и зависимости между дигиталните компетенции с най-висока степен на владеене от счетоводителите респонденти и влиянието на фактори като степен на образование, заемана длъжност и професионален стаж. Основен обект на изследване в разработката са притежаваните от счетоводители технологични дигитални знания и умения, в качеството им на потребители на информационни и комуникационни технологии. Предмет на анализ са от една страна предложени в специализираната литература необходими счетоводни дигитални знания, а от друга - анализ на данни от проведено анкетно проучване сред счетоводители в България. Възприетите изследователски методи се основават на логическия, дедуктивния и сравнителен методи, както и на методите на анализ и синтез. За целите на емпиричното проучване са използвани програмите – IBM – SPSS Statistics, ver. 19 и Microsoft Office Excel 2016. Изследването на статистически връзки и зависимости е направено на база Хи квадрат – анализ (χ2).
    Keywords: ИКТ, въпросници, счетоводители
    JEL: M40 M41 M49
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:104705&r=all
  13. By: Sridhar Ravula
    Abstract: A public firm's bankruptcy prediction is an important financial research problem because of the security price downside risks. Traditional methods rely on accounting metrics that suffer from shortcomings like window dressing and retrospective focus. While disclosure text-based metrics overcome some of these issues, current methods excessively focus on disclosure tone and sentiment. There is a requirement to relate meaningful signals in the disclosure text to financial outcomes and quantify the disclosure text data. This work proposes a new distress dictionary based on the sentences used by managers in explaining financial status. It demonstrates the significant differences in linguistic features between bankrupt and non-bankrupt firms. Further, using a large sample of 500 bankrupt firms, it builds predictive models and compares the performance against two dictionaries used in financial text analysis. This research shows that the proposed stress dictionary captures unique information from disclosures and the predictive models based on its features have the highest accuracy.
    Date: 2021–01
    URL: http://d.repec.org/n?u=RePEc:arx:papers:2101.00719&r=all
  14. By: International Monetary Fund
    Abstract: The Bank Supervision Department (BSD) of the Central Bank of the Bahamas (CBoB) has a generally effective supervisory program in place for the size and complexity of the Bahamian banking system. Since the prior FSAP in 2012, clear progress has been made enhancing the framework in a number of areas as well as in the execution of its supervision program. CBoB supervision continues to evolve in a number of positive directions, with most of the areas viewed by assessors as warranting enhancements included in the execution of the program.
    Keywords: Banking;Market risk;Credit risk;Internal audit;Corporate governance;ISCR,CR,risk management,senior management,risk assessment
    Date: 2019–07–01
    URL: http://d.repec.org/n?u=RePEc:imf:imfscr:2019/200&r=all
  15. By: International Monetary Fund
    Abstract: This Selected Issues paper on the Republic of Armenia seeks to quantify the macroeconomic impact of the government’s reform agenda, which covers three broad areas: tax policy and pension; governance, government efficiency, and corruption; and labor market and competition. Strengthening growth and competitiveness and addressing governance problems requires comprehensive reform efforts. The new government has made it clear that fighting corruption and improving governance remain top priorities. Measures have been proposed to enhance corporate transparency, including through accounting and auditing reforms. A more systematic support program for small and medium-sized enterprises, along with labor market reforms, should also help alleviate unemployment difficulties. The simulations suggest that the government’s tax policy reform can have a positive impact on output in the medium run if it is accompanied by supporting measures. The results suggest that a full implementation of the reform package would yield substantial benefits for the economy. In particular, it could increase real GDP by as much as 7 percent over the long run.
    Keywords: Corruption;Education;Women;Labor markets;Gender diversity;ISCR,CR,Armenia,labor market,IMF staff calculation
    Date: 2019–06–05
    URL: http://d.repec.org/n?u=RePEc:imf:imfscr:2019/155&r=all
  16. By: International Monetary Fund
    Abstract: This 2019 Article IV Consultation discusses that structural reforms, strengthened policy frameworks and the ongoing smooth political transition have laid the foundations for sustained growth in El Salvador. The discussions focused on policies that build on these achievements and address fiscal vulnerabilities, boost long-term growth, and strengthen the governance, anticorruption and Anti-Money Laundering and Combating the Financing of Terrorism frameworks. Continued US dollar appreciation led to a significant decline in inflation and widening of the current account deficit. The authorities agreed that debt would continue to drift upward in the absence of measures, and that weaker-than-expected global growth could have a negative impact on the domestic economy. The authorities emphasized their commitment to guarantee a smooth political transition by sharing information with the new administration and by inviting the Audit Office to oversee the handover process. It is recommended to improve the governance and anticorruption frameworks by increasing the fiscal transparency of the 2020 budget laws, strengthening audit and spending controls, and promptly implementing electronic invoicing.
    Keywords: Public debt;Revenue administration;Public sector;Fiscal stance;Fiscal consolidation;ISCR,CR,debt,IMF staff estimate,authority,dollar,financial system
    Date: 2019–05–23
    URL: http://d.repec.org/n?u=RePEc:imf:imfscr:2019/143&r=all
  17. By: International Monetary Fund
    Abstract: Swiss financial institutions are well capitalized and could withstand the severe shocks under the adverse stress test scenarios, but macrofinancial vulnerabilities are deepening. Important reforms have been made since the 2014 FSAP, but several critical recommendations and emerging challenges have yet to be fully addressed. Capital buffers have increased across all categories of banks, and while the two global systemically important banks have downsized and deleveraged significantly since the global financial crisis, since 2013 they have been growing again. Macroprudential measures have not been taken since 2014 and is constrained by having only one mandated tool and a self-regulation agreement with banks. The financial supervisor (FINMA) has developed into a trusted supervisor, but as a small entity, it relies heavily on external auditors to conduct on-site supervision; the associated conflict of interest and supervisory objectivity risks need to be carefully managed. The combination of an ex-post funding mechanism, a low cap on banks’ contributions, and a private deposit insurance agency run by active bankers, weakens the crisis management arrangements.
    Keywords: Banking;Insurance companies;Mortgages;Stress testing;Bank resolution framework;ISCR,CR,interest rate,banking sector,financial system,return on equity,market share
    Date: 2019–06–26
    URL: http://d.repec.org/n?u=RePEc:imf:imfscr:2019/183&r=all

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