nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2023‒11‒13
four papers chosen by

  1. Forensic accounting research around the world By Ozili, Peterson K
  2. A Cost-Benefit Analysis Methodology for Administrative Prefilling of Value-Added Tax Returns: An Application for Chile By Glenn P. Jenkins; Siamand Hesami; Osaid Alshamleh; Anastasiya Yarygina; Carola Pessino
  3. Gender, Legal Origin, and Accounting Disclosure: Evidence from More Than 140, 000 Firms By Olayinka Oyekola; Olapeju C. Ogunmokun; Martha A. Omolo; Samuel Odewunmi
  4. Tax Avoidance or Compliance Costs Avoidance? Evidence from VAT Reforms in Japan By Takafumi Kawakubo; Takafumi Suzuki; Kohei Asao

  1. By: Ozili, Peterson K
    Abstract: This paper reviews the relevant forensic accounting research (FAR) around the world and suggests avenues for future research in forensic accounting. The study used the thematic and systematic literature review methodology to analyse the existing literature in forensic accounting research. It was found that the major thematic areas in the literature are fraud motivation, fraud consequences, fraud detection using forensic accounting techniques, forensic accounting theory, forensic accounting skills, forensic accounting education and forensic accounting jobs. The quantity of forensic accounting research is relatively small compared to the quantity of research in other accounting specializations. forensic accounting research is well developed in the U.S. and Canada, and is less developed in Europe, Oceania and Asia. There is high interest in forensic accounting research in African countries. There is a relatively low global interest in Internet information about ‘forensic accounting research’ compared to global interest in other forensic accounting topics. Areas for future research includes the role of the environment, digitalization, religiosity, and sustainable development in forensic accounting. The implication of the findings is that forensic accounting research around the world is lopsided as some regions have more advanced FAR compared to other regions. There is a need for even development of forensic accounting research across all regions and a need to publicize the outputs of forensic accounting research to a larger audience to increase people’s interest in forensic accounting.
    Keywords: forensic accounting, forensic accounting research, skills, fraud detection, forensic accounting theory, fraud motivation.
    JEL: M40 M41 M42 M48 M49
    Date: 2023
  2. By: Glenn P. Jenkins (Department of Economics, Queens University, Kingston, Ontario, Canada and Cyprus International University, North Cyprus); Siamand Hesami (Department of Finance Bournemouth University, UK, and Cambridge Resources International Inc.); Osaid Alshamleh (Vienna University of Economics and Business, Cyprus International University, North Cyprus, and Cambridge Resources International Inc.); Anastasiya Yarygina (Inter-American Development Bank (IDB)); Carola Pessino (Inter-American Development Bank (IDB))
    Abstract: Tax administrations (TAs) worldwide have increasingly been moving toward digitalization to increase process efficiency and service delivery. This technical note presents a methodology, and its application for the case of Chile, for evaluating the benefits and costs of a particular component of the TA’s digital transformation: prefilling of value-added tax (VAT) returns. The analysis identifies and allocates the net benefits from both the financial and the economic perspectives considering two major stakeholders: the government and taxpayers. The results show that prefilled VAT returns could benefit TAs and taxpayers, with a reduction in taxpayers’ compliance costs being a primary benefit. The application of the model to the Chilean case shows the economic net present value of the prefilling of VAT returns is US$5.66 billion, with a net benefit to the private sector of US$1.729 billion and a public sector or budgetary impact of US$3.391 billion. Sensitivity analyses show that the results are robust to changes in assumptions, except for the impact on government revenues from the change in taxpayer compliance. Overall, the results show that prefilling tax returns is an effective solution to high taxpayer compliance costs, the associated tax gap, and the risk of burdensome inspections, audit, and tax evasion.
    Keywords: cost-benefit analysis, tax compliance cost, tax administration, digitalization
    JEL: D61 H21 H26 H83
    Date: 2023–10–17
  3. By: Olayinka Oyekola (Department of Economics, University of Exeter); Olapeju C. Ogunmokun (Faculty of Business and Law, De Montfort University); Martha A. Omolo (Department of Economics, University of Exeter); Samuel Odewunmi (Department of Economics, University of Exeter)
    Abstract: We explore the hypothesis that the gender of a firm's manager and a country's legal origin are important factors influencing whether or not firms hire external auditors to prepare their financial statements. International evidence from 140, 860 unique firms surveyed in 139 countries over the period 2008-2022 offers significant support for our hypothesis. In particular, our results suggest that: (1) the probability of female-managed firms producing externally audited financial statements is 1.42 percentage points (or 0.03 standard deviation) lower than their male-managed counterparts; (2) the probability of producing externally audited financial statements by firms in common law origin countries is 7 percentage points (or 0.14 standard deviation) higher than for firms located in civil law origin countries; and (3) the lower frequency with which female-managed firms in our sample report audited financial statements is exacerbated when the firms are located in a common law country. We verify that these results are robust with respect to a number of other considerations, including endogeneity issues, alternative proxies for key variables, additional confounding factors, and potential outliers. Our results contribute to the literature on the relationships between manager characteristics, firm disclosure, and country legal environment.
    Keywords: gender, legal origin, accounting disclosure
    Date: 2023–10–14
  4. By: Takafumi Kawakubo (London School of Economics and Visiting Scholar, Policy Research Institute, Ministry of Finance, Japan); Takafumi Suzuki (Lecturer, Aichi Shukutoku University); Kohei Asao (Visiting Scholar, Policy Research Institute, Ministry of Finance, Japan)
    Abstract: This paper disentangles the motivations behind how enterprises respond to sizedependent tax regulations by exploiting the value-added tax (VAT) reforms in Japan. In Japan, both tax threshold and tax rate have been changed over the past three decades since the introduction of VAT. We build on the model of Harju et al. (2019) to incorporate various tax reforms and derive empirically testable implications. By using a novel panel of Japanese Census of Manufacture covering the period over VAT introduction and reforms, we conducted bunching estimation. The local estimates imply that the observed output response by enterprises is mainly caused by compliance costs rather than tax rates for small enterprises in Japan. The results suggest that easing compliance costs could be more effective support for small enterprises rather than reducing tax rate/burden.
    Keywords: compliance costs; value-added tax; sole proprietor; firm behavior
    JEL: D22 H25 H32 L11
    Date: 2022–06

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