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on Accounting and Auditing |
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Issue of 2021‒04‒05
seven papers chosen by |
| By: | John Guyton; Patrick Langetieg; Daniel Reck; Max Risch; Gabriel Zucman |
| Abstract: | This paper studies tax evasion at the top of the U.S. income distribution using IRS micro-data from (i) random audits, (ii) targeted enforcement activities, and (iii) operational audits. Drawing on this unique combination of data, we demonstrate empirically that random audits underestimate tax evasion at the top of the income distribution. Specifically, random audits do not capture most tax evasion through offshore accounts and pass-through businesses, both of which are quantitatively important at the top. We provide a theoretical explanation for this phenomenon, and we construct new estimates of the size and distribution of tax noncompliance in the United States. In our model, individuals can adopt a technology that would better conceal evasion at some fixed cost. Risk preferences and relatively high audit rates at the top drive the adoption of such sophisticated evasion technologies by high-income individuals. Consequently, random audits, which do not detect most sophisticated evasion, underestimate top tax evasion. After correcting for this bias, we find that unreported income as a fraction of true income rises from 7% in the bottom 50% to more than 20% in the top 1%, of which 6 percentage points correspond to undetected sophisticated evasion. Accounting for tax evasion increases the top 1% fiscal income share significantly. |
| JEL: | D31 H26 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28542&r=all |
| By: | Kutha, Ngakan Made; Susan, Marcellia; Institute of Research, Asian |
| Abstract: | Profits show the performance of managers before the related parties, such as investors and creditors. Therefore, managers often incorrectly state them in the published annual financial reports to protect their reputation. Undoubtedly, this action needs to be reduced by the governance mechanism, like supervision by institutions as the owner and audit by the external public accountant firm. To control these two effects on profits management, additionally, this study employs financial leverage. This study aims to prove the impact of institutional ownership, the external auditor reputation, and financial leverage on profits management. The population and the samples are the non-financial companies establishing the LQ45 index from 2014 to 2018, getting taken by the simple random sampling technique. Also, the regression model performs as the technique to examine the data. By denoting the testing of the hypothesis results and the discussion section, this study summarizes that institutional ownership and reputable external auditor effectively decrease profits management. Additionally, although firms have much debt, they cut the tendency to manage their profits because of applying transparency. |
| Date: | 2021–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:a6nye&r=all |
| By: | Shafik Hebous; Alexander D Klemm; Yuou Wu |
| Abstract: | Profit shifting by multinational enterprises—through manipulation of transfer prices of related-party trade, intragroup lending, or the location of intangibles—affects international flows, raising the question of its impact on the current account and external balances. This paper approaches this question theoretically and empirically. In theory, profit shifting distorts the components of the current account and bilateral current account balances but leaves a country’s aggregate net balance unaffected. There is, however, a real effect on current account balances, because taxes are paid to different jurisdictions. Moreover—in practice—the measured current account could change, because not all transactions are equally easy to track. Our panel empirical results broadly confirm that the current account balance tends to be, on average, unaffected by profit shifting, but taking heterogeneity into account we find that both the real tax effect and mismeasurement strengthen income balances—and thus the current account—in investment hubs. |
| Date: | 2021–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/041&r=all |
| By: | Maximilian Todtenhaupt; Johannes Voget |
| Abstract: | We investigate how changes in firm productivity after M&As are affected by differences in profit taxation between the target and the acquirer. We argue that tax differentials distort the efficient allocation of productive factors following an M&A and thus inhibit the realization of productivity improvements. Using firm-level data on inputs and outputs of production as well as on corporate M&As, we show that the absolute tax differential between the locations of two merging firms reduces the subsequent total factor productivity gain. This effect is concentrated in horizontal M&As and less pronounced when firms can use international profit shifting to attenuate effective differences in taxation. |
| Keywords: | M&A, productivity, international taxation |
| JEL: | F23 H25 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8967&r=all |
| By: | Akrimi, Nesrine |
| Abstract: | The purpose of this paper is to examine the impact of auditor`s job pressures on audit performance. Using a sample of Tunisian listed companies and their signature auditors from 2013 to 2018, we demonstrate that job pressures does not impair audit performance in Tunisia. |
| Date: | 2021–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:q682z&r=all |
| By: | Георгиева, Даниела |
| Abstract: | В разработката са представени резултати от проведено авторово анкетно проучване сред лица, упражняващи счетоводната професия в България относно публикуването на оповестявания за научноизследователската и развойна дейност (НИРД) във финансовите отчети на иновативни предприятия. Целта е да се изследват част от потенциалните причини за текущо съществуващата счетоводна практиката на подценяване задължителното и доброволно оповестяване на информация за НИРД. Възприетите изследователски методи се основават на логическия, дедуктивния и сравнителен методи. Резултатите от изследването подпомагат развитието на литературата като представят по-задълбочен анализ на факторите, въздействащи върху публикуването на данни за НИРД от страна на предприятията в България. |
| Keywords: | НИРД, оповестявания, справки, финансови отчети |
| JEL: | M40 M41 M48 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106717&r=all |
| By: | Arda, Devid Putra |
| Abstract: | The ability of Micro, Small and Medium Enterprises (SME) in surviving in the midst of a crisis shows that this group is far more independent than large entities that generally rely on banking in terms of funding and operations. The contribution of SME in the government's trade balance is indicated by the amount of contribution to gross domestic product (GDP). The presence of SME that has not been incorporated is one of the problems that must be addressed, this is because without a difficult legal entity for an SME to take advantage of government financing facilities. In addition, it is difficult for SME to obtain external financial resources, this is because SME often cannot show financial reports that are in accordance with Financial Accounting Standards in Indonesia (FAS). The implementation of the FAS for SME in Indonesia is an effort to make it easy for SME enterprises for each transaction they make. The application of the EMKM SAK makes it easy for SME entrepreneurs to present financial reports in accordance with the Indonesian GAAP in force |
| Date: | 2021–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:bm6vk&r=all |