nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2021‒12‒20
three papers chosen by

  1. Are audit fees discounted in initial year audit engagements? By Barua, Abhijit; Lennox, Clive S.; Raghunandan, Aneesh
  2. Revenue and distributional modelling for a UK wealth tax By Advani, Arun; Hughson, Helen; Tarrant, Hannah
  3. The state of hiring discrimination: A meta-analysis of (almost) all recent correspondence experiments By Louis Lippens; Siel Vermeiren; Stijn Baert

  1. By: Barua, Abhijit; Lennox, Clive S.; Raghunandan, Aneesh
    Abstract: Many studies report that audit fees are discounted in the year of an auditor change and regulators have long been concerned that such fee discounting could impair audit quality. We find significant bias in the way studies have tested for fee discounting. The bias exists because interim procedures are usually performed by both the predecessor and successor auditors but only the successor’s fee needs to be disclosed. Accordingly, the disclosed fee during the auditor change year usually relates to a partial year of auditing services. We find that the evidence for fee discounting disappears after correcting for this measurement bias.
    JEL: M40 J1
    Date: 2020–04–01
  2. By: Advani, Arun; Hughson, Helen; Tarrant, Hannah
    Abstract: In this paper, we model the revenue that could be raised from an annual and a one-off wealth tax of the design recommended by Advani, Chamberlain and Summers in the Wealth Tax Commission's Final Report (2020). We examine the distributional effects of the tax, in terms of both wealth and other characteristics. We also estimate the share of taxpayers who would face liquidity constraints in meeting their tax liability. We find that an annual wealth tax charging 0.17 per cent on wealth above £500,000 could generate £10 billion in revenue, before administrative costs. Alternatively, a one-off tax charging 4.8 per cent (effectively 0.95 per cent per year, paid over a five-year period) on wealth above the same threshold, would generate £250 billion in revenue. To put our revenue estimates into context, we present revenue estimates and costings for some commonly proposed reforms to the existing set of taxes on capital.
    Keywords: distribution; personal tax; revenue; wealth tax; ES/L011719/1; ES/V012657/1; International Inequalities Institute AFSEE COVID‐19 fund
    JEL: D31 H24
    Date: 2021–10–25
  3. By: Louis Lippens; Siel Vermeiren; Stijn Baert (-)
    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. 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 ten discrimination grounds upon which unequal treatment in hiring is forbidden under United States federal or state law. 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 rather than same-sex orientation in itself. Last, aside from a significant decrease in ethnic and racial hiring discrimination in Europe, we find no structural evidence of recent 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: 2021–12

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