nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2023‒08‒21
ten papers chosen by

  1. Effective tax rates for R&D intangibles By Ana Cinta González Cabral; Tibor Hanappi; Silvia Appelt; Fernando Galindo-Rueda; Pierce O’Reilly
  2. Evidence on IFRS 9 implementation from a sample of Italian banks and other financial intermediaries By Francesco Giovannini; Antonio Schifino
  3. Corporate Tax Disclosure By Jeffrey L. Hoopes; Leslie Robinson; Joel Slemrod
  4. Tax and Investment by Multinational Enterprises By Tibor Hanappi; David Whyman
  5. Will ChatGPT revolutionize accounting? The benefits of Artificial Intelligence (AI) in accounting By Hacker, Bernd
  6. The Role of Digital Accounting And Quality of Accounting Information on Trust in E-Commerce Companies By Mandag, Herny Ria
  7. South Africa: Technical Assistance Report—Monetary and Financial Statistics (Duty Station-based) Mission (August 10–23, 2022); IMF Country Report No. 23/263 By International Monetary Fund
  8. Determining farm value: A survey of French practices By Geoffroy Enjolras; Yann Desjeux; Philippe Jeanneaux; Laure Latruffe
  9. BEPS, Pillar 2, and the Replacement of Tax-Based Incentives With Nontax Incentives By Durst, Michael C.
  10. Aggregate Lending and Modern Financial Intermediation: Why Bank Balance Sheet Models are Miscalibrated By Greg Buchak; Gregor Matvos; Tomasz Piskorski; Amit Seru

  1. By: Ana Cinta González Cabral; Tibor Hanappi; Silvia Appelt; Fernando Galindo-Rueda; Pierce O’Reilly
    Abstract: Tax incentives such as intellectual property regimes provide for reduced taxation of the income derived from research, development, and innovation related activities. By doing so, they lower the overall tax burden from investing in certain qualified intangible assets. This paper proposes a methodology to build indicators comparing the effect of income-based tax incentives for R&D and innovation on firms’ incentives to make R&D intangible investments. It provides insights into how such incentives affect firms’ decisions on whether, where and how much to invest in R&D intangibles. These indicators are used to illustrate the extent to which these tax incentives may create potential distortions to firms’ investment, protection and commercialisation decisions. The model is further developed to account for the design changes to such tax incentives introduced by the OECD/G20 Base Erosion and Profit Shifting minimum standard.
    JEL: H25 O34 O38 E22
    Date: 2023–07–27
  2. By: Francesco Giovannini (Bank of Italy); Antonio Schifino (Bank of Italy)
    Abstract: Since its entry into force, IFRS 9 has posed significant challenges to financial institutions, partly due to its principle-based nature, which leaves room for the adoption of a wide range of practices, as confirmed by the COVID-19 experience. Given the importance of a sound IFRS 9 implementation, also for supervisory purposes, Banca d'Italia conducted a survey on a sample of banks and non-bank financial institutions to monitor the approaches adopted during the pandemic. The evidence confirms the use of diverse practices, some of which could hamper a sound implementation of IFRS 9 by leading to underestimated ECLs or delayed stage transfers. These effects would in turn have a negative impact on institutions' own funds and on the indicators used for supervisory purposes. Moreover, a sound implementation of the IFRS 9 impairment model is also key from a financial stability perspective, as the adoption of appropriate provisioning practices helps to mitigate the risk of pro-cyclical effects arising from a possible sudden increase in credit losses during an economic downturn.
    Keywords: IFRS 9, Covid-19, banks, non-bank financial institutions, accounting, overlays
    JEL: G21 G23 M41
    Date: 2023–07
  3. By: Jeffrey L. Hoopes; Leslie Robinson; Joel Slemrod
    Abstract: Policies that require, or recommend, disclosure of corporate tax information are becoming more common throughout the world, as are examples of tax-related information increasingly influencing public policy and perceptions. In addition, companies are increasing the voluntary provision of tax-related information. We describe those trends and place them within a taxonomy of public and private tax disclosure. We then review the academic literature on corporate tax disclosures and discuss what is known about their effects. One key takeaway is the paucity of evidence that many tax disclosures mandated with the aim of increasing tax revenue have produced additional revenue. We highlight many crucial unanswered questions, answers to which would inform future tax legislation and financial accounting rule making.
    JEL: H25
    Date: 2023–07
  4. By: Tibor Hanappi; David Whyman
    Abstract: This paper investigates two closely related questions concerning the responses of Multi-National Enterprise (MNE) investment to corporate income taxation using a panel of unconsolidated subsidiary-level and consolidated group-level data from the ORBIS database. First, the paper provides new evidence on the heterogeneity of investment responses to taxation across multinational firms. This paper finds that profit shifting opportunities, access to credit, and market power at the group level are associated with decreased investment sensitivity to taxation among MNE subsidiaries. Second, a new empirical approach is used to investigate how tax changes at the host jurisdiction level affect investment at the MNE group level and whether there are propagation effects to foreign subsidiaries within the same MNE group. This paper finds that taxation in one jurisdiction in which an MNE is active is positively associated with investment in its subsidiaries in other jurisdictions. This finding suggests that the well-document negative relationship between taxation and MNE investment within a host jurisdiction masks the MNE rebalancing the location of its investment to other host jurisdictions in response to changes in cross-jurisdictional tax rate differentials rather than purely decreasing its investment globally.
    Keywords: investment, Multinational Enterprises, Taxation
    JEL: F21 H32 H25
    Date: 2023–07–27
  5. By: Hacker, Bernd
    Abstract: It's an experiment! This paper explores how ChatGPT can be used in accounting and reporting to automate routine tasks, increase efficiency, and better understand financial data. The creation of the paper itself was done with the help of ChatGPT, i.e., significant parts of this text were created by the AI and then edited and completed by the author in terms of content and language. On the one hand, this is intended to show the potential of the application in practice and to make it clear that dealing with the tools of AI will be indispensable in the future, but on the other hand, the risks and concerns are also addressed.
    Keywords: ChatGPT, Artificial intelligence, Chatbot, Accounting, Appendix, Auditing
    Date: 2023
  6. By: Mandag, Herny Ria
    Abstract: The purpose of this study is to find out the comparison of Digital accounting and Quality of accounting Information in E-Commerce companies to trust. the research methodology used by researchers is a qualitative method of description. the data from this study were taken from journaling literacy, other article references, US well US the direct web from the e-commerce company. Of the many e-commerce that exists, the researchers took one of the e-commerce companies from 2 countries, namely Amazone in the US, united States and Tokopedia in Indonesia. each process carried out is related to the quality of the information, which can identify the advantages and drawbacks of each information provided to the two e-commerce companies. From the findings of the researchers revealed that a comparison of e-commerce companies with Tokopedia states that is superior to Tokopedia in terms of business scales, technology and products.
    Date: 2023–07–01
  7. By: International Monetary Fund
    Abstract: The mission collaborated with SARB to ensure South Africa's monetary data adhered to international standards outlined in the 2016 Monetary and Financial Statistics Manual and Compilation Guide, including comprehensive coverage of other depository corporations (ODCs) sector.
    Keywords: Monetary and Financial Statistics; Broad Money; Other Depository Corporations; Standardized Report Forms
    Date: 2023–07–18
  8. By: Geoffroy Enjolras (CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes); Yann Desjeux (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Philippe Jeanneaux (VAS - VetAgro Sup - Institut national d'enseignement supérieur et de recherche en alimentation, santé animale, sciences agronomiques et de l'environnement); Laure Latruffe (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Farm valuation is an important step in the transfer process. The authors surveyed 67 land experts and accountants in France on this process. Their study shows the predominance of the patrimonial method associated with methods that take into account the financial flows of the farm. The survey highlights several major issues in the valuation process, in particular the conciliation of perspectives between sellers and buyers, the consideration of intangible factors and the interest in developing valuation standards and scales.
    Abstract: L'évaluation d'une exploitation agricole est une étape importante lors d'un processus de transmission. Les auteurs ont interrogé 67 experts fonciers et experts comptables en France sur ce processus. L'étude atteste de la prédominance de la méthode patrimoniale associée à des méthodes prenant en compte les flux financiers de l'exploitation. L'enquête souligne plusieurs enjeux forts de l'évaluation, notamment la conciliation des perspectives entre vendeurs et acheteurs, la prise en compte des facteurs intangibles et l'intérêt de développer des normes et des barèmes d'évaluation.
    Keywords: Economic and financial valuation, Farms, Evaluation économique et financière, Exploitations agricoles, France
    Date: 2023–05–15
  9. By: Durst, Michael C.
    Abstract: The 15 percent minimum tax will reduce the appeal of both the implicit investment incentives made available by BEPS planning and the explicit tax-based incentives that countries provide through measures like tax holidays.4 Pressure of Tax Competition The pillar 2 proposal can best be understood as an attempt to limit the pressures of tax competition on governments by reducing the extent to which all countries can lower their ETRs, even if they wish to do so.5 The reduction of tax competition is intended to enable countries to reach a more desirable policy balance, regarding ETRs, than the balance that countries can achieve when faced by the pressures of today’s level of tax competition.
    Keywords: Finance,
    Date: 2023
  10. By: Greg Buchak; Gregor Matvos; Tomasz Piskorski; Amit Seru
    Abstract: Existing macroeconomic models focused on bank balance sheet lending are deficient because they do not account for the modern industrial organization of financial intermediation. Utilizing publicly available micro-level lending data, we investigate two increasingly significant margins of adjustment in credit markets: banks’ ability to sell loans and shadow bank activity. These adjustment margins are substantial and vary across time and regions with different incomes. We examine these margins in a parsimonious dynamic quantitative model featuring banks with balance sheet adjustment through loan sales and shadow banks. Using the calibrated model, we illustrate that these margins significantly dampen the immediate contraction following bank capital shock. Recovery is also faster, because profitable loan sales (e.g., securitization) allow banks to build capital faster and because shadow banks pick up lending slack. Failure to account for adjustment margins leads to significant errors when studying policies which rely on financial intermediation pass-through in the level of aggregate lending, its direction, and composition. Our model highlights the tension between bank balance sheet models and data. The model, which forces total lending to depend strongly on bank balance sheet health, must reconcile the weak correlation between bank capital and aggregate lending. These issues can be reconciled with now available data from bank balance sheets, overall bank lending, and aggregate lending, in conjunction with a model of modern financial intermediation.
    JEL: G01 G2 G50
    Date: 2023–07

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