nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2022‒09‒19
seven papers chosen by

  1. Digitalization Of The Corporate Reporting In Europe - Evidence From Bulgarian Wood Based Industry By Atanasov, Atanas
  2. How they hide money? An investigation on tax evasion of large corporations and wealthy taxpayers By Lompo, Miaba Louise; Ouoba, Marie Madeleine
  3. GreenDeal: What is the reporting on local content in the extractive sector? By Florian Favreau
  4. National Accounts of Portugal in 2018. Integrated economic accounts, matrix representations and extensions. By Santos, Susana
  5. How do accounts pass? A discussion of Vollmer’s “Accounting for Tacit Coordination” By Palermo, Tommaso
  6. How to Manage Fiscal Risks from Subnational Governments By Mr. Sandeep Saxena
  7. Patent collateral and access to debt By Felix Bracht; Dirk Czarnitzki

  1. By: Atanasov, Atanas
    Abstract: In the conditions of digital transformation, change of business models and more requirements to the transparency and accuracy of disclosed information, the corporate reporting - financial and nonfinancial - still adheres to the paper format. The introduced requirement for European public companies to use the European Single Electronic Financial Reporting Format (ESEF) aims to increase the analytical qualities of the disclosed information. The main thesis we share is that the introduction of ESEF will allow a wide range of users to use the reports, extracting from them the information they need, and the digitalization of reporting can enable managers to focus on specific risks that determine the value of the business. Arguments regarding the digitalization of non-financial reporting in the context of the lack of a uniform framework and standards for disclosure are also considered. Bulgarian public enterprises from wood based industry - public and non-public, were studied, and the results of the study significantly support our thesis.
    Keywords: digital reporting; ESEF; Bulgarian wood based companies
    JEL: M21 M41
    Date: 2022–06
  2. By: Lompo, Miaba Louise; Ouoba, Marie Madeleine
    Abstract: Understanding tax evasion and tax avoidance mecanism is of critical importance in both developed and developing countries. This paper shed light on five main strategies used by corporation and wealthy taxpayers to avoid taxes including tax heavens, underground economy, aggressive tax optimization, parallel financial markets and cryptocurrencies. We also propose several actions to deal with tax non-compliance across the globe including prevention, peer reporting, active monitoring of compliance indicators and international cooperation. Theses actions might be combined to achieve optimal results in reducing the iompact of tax evasion and tax avoidance.
    Keywords: tax evasion, tax avoidance, tax compliance
    JEL: M48
    Date: 2022
  3. By: Florian Favreau (IODE - Institut de l'Ouest : Droit et Europe - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, Métis Lab EM Normandie - EM Normandie - École de Management de Normandie)
    Abstract: Companies in the extractive sector implement local content measures in the areas in which they operate. These measures - training, education, employment, infrastructure, health - must benefit local populations. Companies report on these activities by publishing the information required by the Non-Financial Reporting Directive (NFRD). The literature and the exploratory analysis of local content clauses appearing in extractive contracts published over the last three years (2018-2020) by the Extractive industry transparency initiative, show that the reform of the NFRD should provide for a precise definition of the notion of local population and a precise measurement of its satisfaction, for example through the use of the notion of consent (FPIC).
    Abstract: Les entreprises du secteur extractif mettent en œuvre des mesures de local content, sur les territoires sur lesquelles elles opèrent. Ces mesures – formation, enseignement, emploi, infrastructures, santé – doivent bénéficier aux populations locales. Les entreprises rendent compte de ces activités en publiant les informations prévues dans la Non financial reporting directive (NFRD). La littérature et l'analyse exploratoire des clauses de local content qui apparaissent dans les contrats extractifs publiés ces trois dernières années (2018-2020) par l'Extractive industry transparency initiative, montrent que la réforme de la NFRD devrait prévoir une définition précise de la notion de population locale et une mesure de sa satisfaction, par exemple au travers de l'utilisation de la notion de consentement (CLPE).
    Keywords: Reporting,Non-Financial reporting directive (NFRD) GreenDeal,Extractive sector,Energy transition,Employability,Local populations,Non-Financial Reporting Directive (NFRD),GreenDeal,Secteur extractif,Transition énergétique,Employabilité,Populations locales
    Date: 2021–12–17
  4. By: Santos, Susana
    Abstract: Starting with the current and accumulation flow accounts, the balance sheets complete the compilation of a sequence of financial and non-financial national accounts in its various forms. Within the scope of the central framework of the current version (2008) of the SNA - System of National Accounts, the integrated economic (T-)accounts/tables are thus compiled, as well as possible matrix representations. A high level of aggregation is adopted, and further possibilities of disaggregation are shown or mentioned. Finally, out of the scope of the central framework, possible extensions are approach. The concluding remarks, in addition to some methodological aspects, underline the importance of the availability of from-whom-to-whom data to complete matrix representations, namely national/social accounting matrices, of recognised potential for the study of income and wealth distribution, among other topics.
    Keywords: National Accounts; Social Accounting Matrix
    JEL: E01 E16
    Date: 2022–08
  5. By: Palermo, Tommaso
    Abstract: Purpose: Building on the notes prepared for a roundtable organized by QRAM about the paper titled “Accounting for tacit coordination: The passing of accounts and the broader case for accounting theory” (Vollmer, 2019), this paper seeks to extend our understanding of “tacit coordination towards the passing of accounts” and its implications for research on accounting as a social practice. Design/methodology/approach: Building on a selective review of previous studies of accounting “in action” and one illustrative vignette, this paper teases out specific aspects of Vollmer’s argument, which is much broader and ambitious in nature. The aim is to go deeper on one issue—“tacit coordination towards the passing of accounts” and the role of (accounting) practitioners as “stewards of silence”—to encourage further work that unpacks the dynamics and tensions that occur when practitioners seek to tacitly coordinate towards the passing of accounts. Findings: The paper shows how our understanding of the relationship between “tacit coordination” and the “passing of accounts” can be enriched by examining how (accounting) practitioners deal with pressures towards explication. To this end, the paper develops three propositions, which focus on how organizational status, organizational complexity, and temporal dynamics may affect the extent to which (accounting) practitioners are able to tacitly coordinate towards the passing of accounts. Practical implications: The three propositions presented in the paper can be used in future studies to further explore the dynamics of tacit coordination towards the passing of accounts and therefore contribute to a more fine-grained illustration of some of the ideas presented in the paper by Vollmer (2019). Originality: The paper sketches the contours of an approach that has the potential to make some of the ambitious ideas presented in Vollmer’s paper more actionable in future studies.
    JEL: M40
    Date: 2022–08–12
  6. By: Mr. Sandeep Saxena
    Abstract: Subnational governments can create sizable fiscal risks for central governments. In addition to impacting service delivery at the grassroots level, unsustainable subnational finances can be a continuous drain on central resources. The need for stronger public financial management systems and capacities to analyze and manage risks at the subnational government level cannot be overemphasized. Central governments need to develop sound institutional mechanisms to systematically monitor the health of subnational finances to be able to proactively manage associated risks. This How to Note provides a framework for central governments that seek to assess and manage fiscal risks stemming from weak subnational finances. It analyzes the sources of subnational finance vulnerabilities and argues that central governments would benefit from putting in place the following: (1) a stronger regulatory framework, (2) improved fiscal reporting, and (3) enhanced central oversight. The lessons distilled from the international experience are particularly useful for developing economies where the management of risks can be improved.
    Keywords: fiscal risks; contingent liabilities; subnational debt; public financial management (PFM); fiscal institutions; public debt; fiscal policy; budget planning; subnational finances
    Date: 2022–09–01
  7. By: Felix Bracht; Dirk Czarnitzki
    Abstract: We investigate how intangible capital in form of intellectual property, such as patents, might mitigate financing constraints. While scholars have already argued that patents might have a signalling value reducing information asymmetries between borrowers and lenders, we quantify the value of using patents as collateral with regard to capital access. Although this mechanism of patents in financing further R&D is not new, we are the first to provide a treatment effects study of patent collateral and access to capital. We make use of mandatory collateral registry data in Sweden and the Netherlands to construct panels combining firm-level financial data and patent measures. Estimating conditional difference-in-difference regressions on firms’ debt allows deducting treatment effects of using patents as collateral. We find that patent pledging enables Swedish (Dutch) firms to borrow about 21% (26%) more than in the counterfactual situation in which no patents would have been used as collateral. We also find that the collateral value of patents is higher than their signalling value, and a back-of-the-envelope scenario calculation shows that Dutch (Swedish) firms could raise more than € 7 (€ 10) billion additional debt capital if the complete patent portfolios would be pledged, all else constant.
    Keywords: Financing Constraints, Collateral, Intangible Assets, Patents, Treatment Effects Estimation
    Date: 2022–08–19

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