nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2021‒11‒08
six papers chosen by

  1. Taxation of Multinationals: Design and Quantification By Sébastien Laffitte; Julien Martin; Mathieu Parenti; Baptiste Souillard; Farid Toubal
  2. How do investors value the publication of tax information? Evidence from the European public country-by-country reporting By Müller, Raphael; Spengel, Christoph; Weck, Stefan
  3. Practically best friends?! Agility and ISO 9001 By Adam, Patricia A.
  4. Understanding reporting and review under Articles 6 and 13 of the Paris Agreement By Chiara Falduto; Jane Ellis; Katia Simeonova
  5. The macroeconomic implications of zero growth: A post-Keynesian approach By Hein, Eckhard; Jimenez, Valeria
  6. The state of hiring discrimination: A meta-analysis of (almost) all recent correspondence experiments By Lippens, Louis; Vermeiren, Siel; Baert, Stijn

  1. By: Sébastien Laffitte (CEPS - Centre d'Economie de l'ENS Paris-Saclay - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay - Université Paris-Saclay); Julien Martin (CEPR - Center for Economic Policy Research - CEPR); Mathieu Parenti (ECARES - European Center for Advanced Research in Economics and Statistics - ULB - Université libre de Bruxelles); Baptiste Souillard (ECARES - European Center for Advanced Research in Economics and Statistics - ULB - Université libre de Bruxelles); Farid Toubal (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CEPR - Center for Economic Policy Research - CEPR, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Minimum corporate taxation is the second Pillar of the reforms of international corporate taxation. It is a simple and powerful tool that could curb profit shifting towards low or no tax jurisdictions. Its implementation would allow France to tax the profits that French headquarters have shifted to tax havens, but also to reduce the erosion of its tax base. We estimate the French corporate income tax (CIT) revenues would increase by almost 6 billion euros in the short run after the implementation of an effective minimum tax rate of 15% and by 8 billion euros at a rate of 21%. CIT gains may vary substantially depending on the scope of the tax base, the possibility of headquarters' inversion, and whether it includes domestic corporations or not. CIT gains are relatively higher in France than in Germany or the United States. The expected gains are substantially larger than those to be expected from the implementation of the first Pillar of the reform in its version proposed by the US in April 2021, which opens up rights to tax the 100 largest corporations in the world according to their sales' destination. According to our estimates, Pillar One would bring in about 900 million euros for France.
    Keywords: Tax rate,multinational corporation,reform
    Date: 2021
  2. By: Müller, Raphael; Spengel, Christoph; Weck, Stefan
    Abstract: We examine the capital market reaction to the announcement of the European Union (EU) to introduce a public tax country-by-country reporting (CbCR) regime. By employing an event study methodology, we find a significant cumulative average abnormal return (CAAR) of -0.699%, which translates into a monetary value drop of approximately EUR 65 billion. We conclude that investors evaluate reputational risks arising from public scrutiny and competitive disadvantages to outweigh potential benefits of an extended information environment or more sustainable corporate tax strategies. In cross-sectional tests, we find that the average investor reaction is more pronounced for firms with low effective book tax rates, indicating that reputational concerns play a significant role in the marginal investor's investment behavior. Furthermore, our cross-sectional results indicate that the market reaction is stronger for firms operating in industries with high growth in market participants, providing an initial indication for the role of the competitive environment as an additional channel. Our inferences are of particular importance in light of the current ongoing debates on similar disclosure rules (particularly in the United States; cf. "Disclosure of Tax Havens and Offshoring Act") as well as for sustainability standard setters.
    Keywords: tax transparency,tax disclosure,tax avoidance,event study,country-by-country reporting
    JEL: F23 G14 G38 H25 H26 M41
    Date: 2021
  3. By: Adam, Patricia A.
    Abstract: Agility is considered the silver bullet for survival in the VUCA world. However, many organisations are afraid of endangering their ISO 9001 certificate when introducing agile processes. A joint research project of the University of Applied Sciences and Arts Hannover and the DGQ has set itself the goal of providing more security in this area. The findings were based on interviews with managers and team members from various organisations of different sizes and industries working in an agile manner as well as on common audit practices and a literature analysis. The outcome presents a clear distinction of agility from flexibility as well as useful guidelines for the integration of agile processes in QM systems - for QM practitioners and auditors alike.
    Keywords: Quality Management,QM,Agile Practices,Processes,Agile Manifesto
    Date: 2021
  4. By: Chiara Falduto (OECD); Jane Ellis (OECD); Katia Simeonova
    Abstract: Reporting and review requirements under the Paris Agreement include provisions under Article 13 relating to the implementation and achievement of Parties’ Nationally Determined Contributions (NDCs). Draft texts relating to Article 6.2 relating to Parties’ use of cooperative approaches also include provisions on reporting and review. This document identifies and analyses issues related to the interplay of relevant reporting and review requirements under both Article 13 and Article 6 of the Paris Agreement, as it is important to improve complementarity and ensure consistency between the two sets of reporting and review provisions, as well as to meet the already-agreed principles governing transparency. Regarding reporting, the document highlights options for improving the clarity of the provisions concerning the timing, content, and frequency of the three required types of information under Article 6.2 guidance (i.e., the initial report, annual information, and regular information). Regarding Internationally Transferred Mitigation Outcomes (ITMOs), this document highlights several issues relating to timing and vintages that would need to be addressed to facilitate ITMO reporting and review implementation. Regarding review provisions, this document finds that draft A6.2 guidance could usefully provide further detail on some substantive aspects of the Article 6 review process, such as, e.g., clarifying roles of the Party, the TER team, and the secretariat in the review process.
    Keywords: Article 6, carbon markets, Enhanced Transparency Framework, Paris Agreement, reporting, review
    JEL: F53 Q29 Q49 Q54 Q56 Q58
    Date: 2021–10–27
  5. By: Hein, Eckhard; Jimenez, Valeria
    Abstract: This paper tries to clarify some important aspects around the zero-growth discussion. Starting from an accounting perspective, we analyse the implications of zero growth and clarify the stability conditions of such an economy. This is complemented with a monetary circuit approach - which, like any model, has to respect the national income and financial accounting conventions. The latter allows us to show that a stationary economy, i.e an economy with zero net investment, is compatible with positive profits and interest rates. It is also argued that a stationary economy does not generate systemic financial instability, in the sense of rising or falling financial assets- or financial liabilities-income ratios, if the financial balances of each macroeconomic sector are zero. In order to analyse the dynamic stability of such an economy, we make use of an autonomous demand-led growth model driven by government expenditures. We show that a stable stationary state with zero growth, positive profits, and a positive interest rate is possible. However, the stable adjustment of government expenditure-capital and government debt-capital ratios to their long-run equilibrium values requires specific maxima for the propensity to consume out wealth and for the rate of interest, assuming a balanced government budget and zero retained earnings of the firm sector.
    Keywords: Ecological macroeconomics,post-Keynesian economics,stationary-state economics,growth imperative
    JEL: Q01 O44 P10
    Date: 2021
  6. By: Lippens, Louis; Vermeiren, Siel; Baert, Stijn
    Abstract: Notwithstanding the improved integration of various minority groups in the workforce, unequal treatment in hiring still hinders many individuals' access to the labour market. To tackle this inaccessibility, it is essential to know which and to what extent minority groups face hiring discrimination. Past meta-studies have charted parts of the discrimination literature but permit only limited comparisons across minority groups. This meta-analysis synthesises a quasi-exhaustive register of correspondence experiments on hiring discrimination published between 2005 and 2020. Using a random-effects model, we computed pooled discrimination ratios concerning a total of ten discrimination grounds upon which unequal treatment in hiring is forbidden under United States federal or state law. First, we find that hiring discrimination against candidates with disabilities, older candidates, and less physically attractive candidates is at least equally severe as the unequal treatment of candidates with salient racial or ethnic characteristics. Remarkably, hiring discrimination against older applicants is even higher in Europe than in the United States. Furthermore, unequal treatment in hiring based on sexual orientation seems to be prompted mainly by signalling activism through an affiliation with an LGB+ rights organisation rather than same-sex orientation in itself. Last, hiring discrimination remains pervasive. Aside from a decrease in hiring discrimination based on race and national origin in Europe, we find no structural evidence of temporal changes in hiring discrimination based on the various other grounds within the scope of this review.
    Keywords: hiring discrimination,unequal treatment,meta-analysis,correspondence experiment,audit study
    JEL: J71 J23 J14 J15 J16
    Date: 2021

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