nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2022‒08‒08
ten papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Can prohibitions of non‐audit services and an expanded auditor liability improve audit quality? By Quick, Reiner
  2. The impact of the adoption of IFRS on turnover: a comparative analysis with the Moroccan accounting framework By Adil Laouane Laouane; Mohamed Torra
  3. Repenser le financement des entreprises vertueuses et les politiques prudentielles en intégrant la solvabilité socio-environnementale By Laura Chémali; Camille Souffron
  4. The new public management in the Moroccan administration: true or false institutional change By Sanaa Baha
  5. Accounting for the slowdown in UK innovation and productivity By Peter Goodridge; Jonathan Haskel
  6. Intermediary Balance Sheets and the Treasury Yield Curve By Wenxin Du; Benjamin Hébert; Wenhao Li
  7. Economic Scenario Generators: a risk management tool for insurance By Pierre-Edouard Arrouy; Alexandre Boumezoued; Bernard Lapeyre; Sophian Mehalla
  8. Die im Dunkeln sieht man nicht - Empirische Erkenntnisse zu IAS 24 „Angaben über Beziehungen zu nahestehenden Unternehmen und Personen“ für die Geschäftsjahre 2013 bis 2020 By Dahlhoff, Jürgen; Do, Tony
  9. The Impact of ICT and Intangible Capital Accumulation on Labour Demand Growth and Functional Income Shares By Robert Stehrer
  10. Disclosure Policy Design and Regulatory Agent Behavior By Makofske, Matthew

  1. By: Quick, Reiner
    Abstract: Law entrusts auditors to conduct statutory audits. They fulfil a societal role in providing an opinion on the truth and fairness of the financial statements of audited entities and reducing the risk of misstatement. The purpose of an audit is to enhance the credibility of financial reports prepared by management (Watts & Zimmerman, 1986). Thereby, audits contribute to financial stability, trust and market confidence in the economy by protecting investors from agency risk, which in turn reduces the cost of capital for companies (European Commission, 2010). To fulfil this function, auditors need to provide an adequate service quality. According to the generally accepted definition of DeAngelo (1981), audit quality is the market-assessed joint probability that an auditor will discover material misstatements (auditor competence) and report them (auditor independence). This definition stresses that providing a high factual audit quality is insufficient but that users must also perceive audit quality as appropriate. Accounting scandals like Carillion, a UK construction and facility services company, or Wirecard, a German fintech company, raise public suspicion of auditing failures and result in regulatory initiatives, which seek to improve audit quality.
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:dar:wpaper:133165&r=
  2. By: Adil Laouane Laouane (UIT - Université Ibn Tofaïl); Mohamed Torra (UIT - Université Ibn Tofaïl)
    Abstract: The development of financial markets, the importance of the transparency of financial information disclosed, and the consequences of globalization have led to changes in accounting science, particularly in its financial reporting dimension. In the case of Morocco, the Moroccan accounting framework remained frozen in the face of changes induced by IFRS standards. The process of convergence of accounting standards with international standards (IFRS) has so far been limited to financial sector groups and listed companies. Our article discusses the impact of the introduction of IFRS on the way of calculating turnover.We will seek to show, on the basis of a comparative analysis, how the change in accounting standards could affect the net income of Moroccan adoptive companies
    Abstract: Le développement des marchés financiers, l'importance de la transparence des informations financières divulguées, les conséquences de la mondialisation ont fait évoluer la science comptable, notamment au niveau de sa dimension relative à l'information financière. Pour le cas du Maroc, le référentiel comptable marocain est resté figé face aux changements induits par les normes IFRS. Le processus de convergence de normes comptables avec les référentiels internationaux (IFRS) s'est pour l'instant limité aux groupes du secteur financier et aux sociétés cotées. Notre article aborde l'impact de l'introduction des normes IFRS sur le mode de calcul du chiffre d'affaires, Nous chercherons à montrer, sur la base d'une analyse comparative, de quelle manière le changement des normes comptables pourraient affecter le résultat net des entreprises marocaines adoptives.
    Keywords: IFRS standards,general accounting standards,Moroccan accounting standards,net income,Normes IFRS,code général de la normalisation comptable,référentiel comptable marocain,résultat net
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-03639461&r=
  3. By: Laura Chémali; Camille Souffron (ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres)
    Abstract: Despite the amount of savings available and the money supply managed by financial institutions, significant market failures and the failure of carbon pricing strategies prevent sufficient financing of the transition, notably through bank credit. Aware of the links between natural, monetary and productive aggregates, we propose the development of "eco-systemic" prudential policies by exposing the interdependence between macro, micro and environmental prudential measures. These would be based on a reorientation of corporate accounting standards towards the concept of socio-environmental solvency, notably the CARE-TDL model (integration of human and natural capital alongside financial capital on the liabilities side of the balance sheet). In an ecosystemic framework, this solvency of virtuous companies would compensate in accounting terms for the lack of financial solvency. The State would then be the guarantor in order to facilitate their access to financing, also reduced by Basel III and Solvency II. This policy develops a system of reallocation of financing capacities from non-virtuous companies to the most virtuous ones with public guarantees, aiming to reduce the debt ratio while increasing green investments, with monetary policies of rates but also of volumes and ratios differentiated according to the types of assets and the greening of bank balance sheets, and finally forms of public-private partnership. Facilitating the financing of green companies would green capital but increase it, partly neutralising the positive environmental impact. It is therefore necessary to limit the credit expansion of "brown" companies. This would reduce risky operations and favour less leveraged investments more connected to the real economy, reducing systemic financial risk. --- The Agenda 2030 Policy Briefs series (PoCFiN Kedge Business School - SDSN France - Institut Rousseau) mobilises economists and practitioners to identify an agenda of economic and financial reforms to achieve the 2030 Agenda, at territorial, national and supranational levels. These are published after peer review.
    Abstract: Malgré la quantité d'épargne disponible et la masse monétaire gérée par les institutions financières, d'importantes défaillances de marché et l'échec des stratégies de pricing du carbone empêchent un financement suffisant de la transition, notamment par le canal du crédit bancaire. Conscients des liens entre agrégats naturels, monétaires et productifs, nous proposons le développement de politiques prudentielles "éco-systémiques" en exposant l'interdépendance entre des mesures prudentielles macro, micro-économiques et environnementales. Elles se fonderaient sur une réorientation des normes comptables des entreprises sur le concept de solvabilité socio-environnementale, notamment le modèle CARE-TDL (intégration des capitaux humains et naturels aux côtés du capital financier au passif du bilan). Dans un cadre écosystémique, cette solvabilité des entreprises vertueuses compenserait en terme comptable le manque de celle financière. L'Etat en serait alors garant pour leur faciliter l'accès au financement, réduit aussi par Bâle III et Solvabilité II. Cette politique élabore un système de réallocation des capacités de financement des entreprises non-vertueuses vers les plus vertueuses avec des garanties publiques, visant à réduire le ratio d'endettement tout en augmentant les investissements verts, avec des politiques monétaires de taux mais aussi de volumes et ratios différenciés selon les types d'actifs et le verdissement des bilans bancaires, et enfin des formes de partenariat public-privé. Faciliter le financement des entreprises vertueuses verdirait le capital mais l'augmenterait, neutralisant en partie l'impact environnemental positif. Il est donc nécessaire de limiter l'expansion du crédit des entreprises "brunes". Cela réduirait les opérations risquées et favoriserait des investissements à effet de levier plus faibles et plus connectés à l'économie réelle, diminuant le risque financier systémique. --- La série de Policy Briefs Agenda 2030 (PoCFiN - SDSN France - Institut Rousseau) mobilise économistes et praticiens pour identifier un agenda de réformes économiques et financières permettant d'atteindre l'Agenda 2030, aux échelons territoriaux, nationaux et supranationaux. Ces derniers sont publiés après peer review.
    Date: 2021–06–01
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-03682216&r=
  4. By: Sanaa Baha (UH2MC - Université Hassan II [Casablanca])
    Abstract: The role of institutions for good performance has been the subject of several works which have shown the direct relationship between good institutions and economic growth. It is with this in mind that New Public Management has developed over the past decades as the new managerial trend in public affairs. This new management, inspired by the management of private organizations, calls for making performance the basis of public management. All over the world and particularly in developing countries, especially Morocco, adherence to the principles and practices of this new management has become a source of legitimacy for public organizations. The objective of the reforms inspired by this new management, from their first generations, is to produce a change in public organizations: a change in structures, organizational processes, behaviors, responsibilities and cultures and in the delivery of services. The question that arises then and after several years of experimentation and testing is whether this new management has produced a change in Moroccan public organizations. To answer this question, we conducted a survey of the administrations that participated in the foreshadowing waves of the new organic finance law under the 2015 finance law (whose are experimenting with several principles and tools of the new public management centered on results and performance), as well as with the support, control and audit entities of these administrations. The analysis of the data from this survey has confirmed to us that the adoption of reforms, even if they have performed well elsewhere, is not enough on its own to produce change in public administration.
    Abstract: Le rôle des institutions pour de bonnes performances a fait l'objet de plusieurs travaux qui ont montré la relation directe entre les bonnes institutions et la croissance économique. C'est dans cette optique que la nouvelle gestion publique ou le nouveau management public s'est développé ses dernières décennies comme la nouvelle tendance managériale des affaires publiques. Partout dans le monde et particulièrement dans les pays en voie de développement, notamment le Maroc, l'adhésion aux principes et pratiques de cette nouvelle gestion est devenue une source de légitimité des organisations publiques. L'objectif des réformes inspirées de cette nouvelle gestion, depuis leurs premières générations, est de produire un changement dans les organisations publiques : un changement des structures, des processus organisationnels, des comportements, des responsabilités et des cultures et de la prestation des services. La question qui se pose alors, après plusieurs années d'expérimentation et d'essai au Maroc, est de savoir si cette nouvelle gestion a produit un changement dans l'administration publique. Pour répondre à cette question, nous avons mené une enquête auprès des administrations qui ont participé aux vagues de préfigurations de la nouvelle loi organique des finances au titre de la loi de finances 2015 (elles expérimentaient plusieurs principes et outils de la nouvelle gestion publique axée sur les résultats et la performance), ainsi qu'auprès des entités d'accompagnement, de contrôle et d'audit de ces administrations. L'analyse des données de cette enquête nous a confirmé que l'adoption de réformes, même si elles ont réalisé de bonnes performances ailleurs, ne suffit pas à lui seul de produire un changement dans l'administration.
    Keywords: Institutional change,organizational capacity for change,new public management.,Changement institutionnel,capacité organisationnelle au changement,nouvelle gestion publique
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-03636917&r=
  5. By: Peter Goodridge (x The Productivity Institute, Alliance Manchester Business School); Jonathan Haskel (Bank of England; Imperial College Business School; CEPR and IZA)
    Keywords: productivity, growth, slowdown, innovation, knowledge, intangibles, investment, capital, TFP
    Date: 2022–06
    URL: http://d.repec.org/n?u=RePEc:anj:wpaper:022&r=
  6. By: Wenxin Du; Benjamin Hébert; Wenhao Li
    Abstract: We have documented a regime change in the U.S. Treasury market post-Global Financial Crisis (GFC). We first derived bounds on Treasury yields that account for dealer balance sheet costs, which we call the net short and net long curves. We show that actual Treasury yields moved from the net short curve pre- GFC to the net long curve post-GFC, consistent with the shift in the dealers’ net position. We then use a stylized model to demonstrate that increased bond supply and tightening leverage constraints can explain this change in regime. This change, in turn, helps explain negative swap spreads and the co-movement between swap spreads, dealer positions, yield curve slope, and covered-interest-parity violations, and implies changing effects for a wide range of monetary and regulatory policy interventions.
    Keywords: yield curve; balance sheet constraints; CIP deviations
    JEL: G12 E52 F3
    Date: 2022–07–01
    URL: http://d.repec.org/n?u=RePEc:fip:fednsr:94462&r=
  7. By: Pierre-Edouard Arrouy (Recherche et Développement, Milliman Paris - Milliman); Alexandre Boumezoued (Recherche et Développement, Milliman Paris - Milliman); Bernard Lapeyre (ENPC - École des Ponts ParisTech); Sophian Mehalla (Recherche et Développement, Milliman Paris - Milliman)
    Abstract: We present a risk management tool, named Economic Scenario Generator (ESG), used by insurance companies for simulating the global state of one or several economies described by key financial risk drivers. This tool is of particular use within the Solvency II framework, since insurance companies are required to value their balance-sheet from a market-consistent viewpoint. However, there is no observable price of insurance contracts hence the necessity of relying on ESGs to perform Monte Carlo simulations useful for valuation. As such, the calibration of Risk-Neutral models underlying this valuation is of particular interest as there is a strong requirement to match observable market prices. Furthermore, for a variety of applications, the insurance company has to value its balance-sheet over a set of different economic conditions, leading to the need of intensive re-calibrations of such models. In this paper, we first provide an overview of the key requirements from Solvency II and their practical implications for insurance valuation. We then describe the different use cases of ESGs. A particular attention is paid to Risk-Neutral interest rates models, specifically the Libor Market Model with a stochastic volatility. We discuss the complexity of its calibration and describe fast calibration methods based on approximations and expansions of the probability density function. Comparisons with more common method highlight the reduction in calibration time.
    Date: 2022–05–18
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03671943&r=
  8. By: Dahlhoff, Jürgen; Do, Tony
    Abstract: IAS 24 ist ein Rechnungslegungsstandard, der von kapitalmarktorientierten Unternehmen Angaben über Beziehungen zu nahestehenden Unternehmen und Personen verlangt. Die Offenlegung von Geschäften im Sinne des IAS 24 ist eine komplexe Angelegenheit, die hohe Anforderungen an die berichtenden Unternehmen stellt. Die veröffentlichten Fehlermeldungen im Bundesanzeiger zum IAS 24 bis ins Jahr 2020 zeigen die große Bandbreite an fehlerhaften Angaben durch berichtende Unternehmen. 70% der Verstöße beziehen sich auf nicht offengelegte Beziehungen zu nahestehenden Per-sonen und Unternehmen, auf unzureichende Befolgung von Angabepflichten und auf nicht vorgenommene Kategorisierungen. Eine Untersuchung der Berichtspraxis der DAX 30-Population für die Jahre 2013 bis 2019 zeigt einen heterogenen Umgang mit IAS 24 auf. Es wurden 46 verschiedene Angaben, die nach IAS 24 im Standard aufgeführt sind und über die berichtet werden kann, erfasst und analysiert. Die Bandbreite zu einzelnen Angaben variiert im Vergleich der Unternehmen sehr stark, während die Berichtspraxis bei den einzelnen Unternehmen relativ konstant ist. Zudem zeigt die Untersuchung, dass die Anzahl der Geschäfte mit nahestehenden Personen weitaus geringer als die mit nahestehenden Unternehmen ist. Das deckt sich mit den Ergebnissen anderer Studien. Vermutlich besteht die Befürchtung, dass Geschäfte mit nahestehenden Personen im Sinne einer unangemessenen Vorteilsnahme oder -gewährung kritisiert werden könnten, so dass die DAX 30-Unternehmen deshalb diese Form der Beziehungen so weit wie möglich reduzieren. 70% der Unternehmen weisen explizit auf die Marktüblichkeit ihrer Geschäfte mit nahestehenden Unternehmen und Personen hin, eine Angabe, die nicht erforderlich ist, aber offensichtlich von den berichtenden Unternehmen für notwendig erachtet wird.
    Keywords: IAS 24,Beziehungen zu nahestehenden Unternehmen,Beziehungen zu nahestehenden Personen,Fehlermeldungen IAS 24 im Bundesanzeiger,IAS 24 und DAX 30,Related party disclosures
    JEL: M4 M40
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:zbw:esprep:261198&r=
  9. By: Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper investigates whether the diffusion of tangible IT and CT capital and intangible capital asset types has an impact on labour demand growth and the share of labour income in total income at the industry and country level. The econometric analysis is derived from a Cobb-Douglas production function taking empirical stylized facts into account. The effects of technical progress embodied in the various forms of capital impact along inter-industry and intercountry production linkages, which are considered by using global value chain indicators. The analysis is broken down to examine the influence on different types of labour, including the dimensions of gender, age, and educational attainment. Accumulation of ICT assets have generally insignificant and in some cases small positive effects on labour demand and income shares, though patterns differ across types of labour. Intangible assets show a positive relation with respect to labour demand growth.
    Keywords: capital accumulation, ICT capital, intangibles, labour demand, income distribution
    JEL: J23 J31 O33 O52
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:wii:wpaper:218&r=
  10. By: Makofske, Matthew
    Abstract: Mandatory disclosure promotes self-regulation of product quality, but may also provide incentives for firms to manipulate disclosed information. Collection of quality information by inspectors protects against direct manipulation, but firms may attempt to unduly influence inspectors. In Las Vegas, Nevada, food-service health inspections are numerically scored, with health code violations from three categories carrying prescribed demerit amounts. For disclosure however, numeric scores are coarsened into letter grades, which may encourage lobbying of inspectors to under-report violations near threshold scores. Beginning in 2013, the demerit amount prescribed for each good-practices violation was reduced from 1 to 0; while the letter-grade scale and penalties prescribed for major and critical violations (3 and 5 demerits each) remained unchanged. Exploiting this removal of scoring implications from good-practices violations, coupled with the discontinuous punishment severity inherent in letter-grade disclosure, I find that inspectors significantly under-reported good-practices violations prior to 2013—by 31 to 90 percent in some cases—when those violations were likely to affect letter grades. Without careful design, disclosure policies supplementing inspection programs may inadvertently undermine the regulatory efforts they were meant to support.
    Keywords: regulatory inspection, mandatory disclosure, restaurant hygiene, manipulation
    JEL: D82 I18 K32 L15
    Date: 2022–06–30
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:113623&r=

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