nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2022‒04‒25
four papers chosen by

  1. Is Ireland the most Intangible Intensive Economy in Europe? A Growth Accounting Perspective By Kostarakos, Ilias; McQuinn, Kieran; Varthalitis, Petros
  2. Corporate Disclosure, Compliance and Consequences: Evidence from Russia By Banerjee, Suman; Estrin, Saul; Pal, Sarmistha
  3. INDICATORS FOR EVALUATION OF PUBLIC MANAGEMENT By Maury Cruz, Luis Alberto; Cruz-Juárez, Alberto; Medel-Ramírez, Carlos
  4. A Case Study of Professionals’ Institutional Work in Digitalisation By Masashi Goto

  1. By: Kostarakos, Ilias; McQuinn, Kieran; Varthalitis, Petros
    Date: 2022
  2. By: Banerjee, Suman (Stevens Institute of Technology); Estrin, Saul (London School of Economics); Pal, Sarmistha (University of Surrey)
    Abstract: Does the introduction of corporate transparency and disclosure rules in emerging economies affect compliance, and therefore earnings quality and firm performance? We explore these questions for an important emerging economy, Russia, using a natural experiment, the 2002 introduction of Russian corporate governance code. We exploit the exogenous variation in voluntary disclosure and find a significant increase in corporate disclosure among the domestic Russian firms over the period 2003-07 when firms gradually adopted some but not all disclosure rules. The immediate effect of the introduction was a drop in reported earnings. Market valuation, however, only improved for domestic firms after 2007, when all domestic firms had complied. However, cross-listed firms, which were already satisfying international standards, remained largely unaffected. Though average compliance by domestic firms was only 53%, average firm value of treated domestic firms, relative to cross-listed ones, went up by about 10%. Results are robust, confirm external validity and offer important policy implications for other emerging/transition economies.
    Keywords: increased disclosure, processing cost of information, market valuation, reported earnings, cost of capital, domestic vs. cross-listed firms, 2002 Russian Corporate Governance Code, difference-in-difference model, Russia
    JEL: G3 K29 O38
    Date: 2022–02
  3. By: Maury Cruz, Luis Alberto; Cruz-Juárez, Alberto; Medel-Ramírez, Carlos
    Abstract: This study proposes to evaluate the degree of democratic governance of public management through the analysis of public information. For this purpose, the transparency portals of the obligated subjects are analyzed, applying a series of indicators, postulates, axioms and theorems, with which possible cases of corruption can be identified. This study answers the question: How to evaluate the degree of democratic governance of public management from the analysis of the portals of the obligation of transparency of the obligated subjects at the federal, state and municipal levels? To this end, indicators are developed to evaluate the quality of public information, levels of transparency, corruption, accountability, social participation, citizen oversight and democratic governance, to be applied in the first instance to transparency portals of the obligated subjects. These indicators, as a whole, provide the guideline for evaluating the degree of democratic governance of a given public management at the federal, state or municipal level. It should be noted that the methodology for this evaluation is multi and interdisciplinary in nature, combining philosophical, political, legal, economic and accounting aspects.
    Keywords: Indicator, Quality, Public information, Transparency, Corruption, Social participation, Accountability, Citizen oversight and Democratic governance.
    JEL: C82 H77 H83 I39 K42 O38
    Date: 2021–06–06
  4. By: Masashi Goto (Research Institute for Economics and Business Administration, Kobe University, JAPAN)
    Abstract: This study explores approaches that a profession can use to maintain its professional institution when facing an emerging technology that has the potential ability to disrupt the professional institutional arrangements. With the theoretical lens of institutional maintenance work, I conducted a case study of the audit profession and artificial intelligence (AI) in Japan between 2015 and 2019, with a particular focus on the way how the professional association and dominant large firms coped with their deteriorating professional reputations and negative social perceptions about the future of the profession. The analysis reveals that the professionals engaged in a mix of internal and external preventive institutional maintenance work both at the field and firm levels, even before specific disruptors or alternative solutions of the existing audit work emerged. Their institutional work focused on developing new practices enabled by AI and advanced digital technologies and on establishing a renewed theory of their legitimacy as the leaders of digitalisation. This study expands our knowledge of institutional work and professions by introducing proactive digitalisation as an important form of institutional work in this digital age, as well as ‘preventive defence’ institutional work as a neglected strategic approach to nullify potential threats to institutions.
    Keywords: Institutional maintenance work; Profession; Artificial intelligence; Qualitative study
    Date: 2022–03

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.