nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2024‒01‒01
five papers chosen by

  1. Profit Shifting of Multinational Corporations Worldwide By Javier Garcia-Bernardo; Petr Jansky
  2. Organizing data analytics By Alonso, Ricardo; Câmara, Odilon
  3. Evaluation of tax expenditures: conceptual frameworks and international experiences By Redonda, Agustin; Von Haldenwang, Christian; Berg, Sofia
  4. Using Industry Certifications to Improve the Marketability and Skill Development of Accounting and Finance Students By Cole, Brittany; Hatch, Laura; Mehlhorn, Joey
  5. Green total factor productivity mismeasurement without considering intangibles: Evidence from China By Qing Li; Kexing Yu; Yanrui Wu

  1. By: Javier Garcia-Bernardo (1Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czechia; Department of Methodology & Statistics, Utrecht University, the Netherlands; Centre for Complex Systems Studies, Utrecht University, the Netherlands); Petr Jansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: We exploit the new country-by-country reporting data of multinational corporations, with unparalleled country coverage, to reveal the distributional consequences of profit shifting. We estimate that multinational corporations worldwide shifted over $850 billion in profits in 2017, primarily to countries with effective tax rates below 10%. Countries with lower incomes lose a larger share of their total tax revenue due to profit shifting. We further show that a logarithmic function is better suited for capturing the non-linear relationship between profits and tax rates than linear or quadratic functions. Our findings highlight effective tax rates’ importance for profit shifting and tax reforms.
    Keywords: multinational corporation, corporate taxation, profit shifting, effective tax rate, country-by-country reporting, global development
    JEL: F23 H25 H26 H32
    Date: 2023–12
  2. By: Alonso, Ricardo; Câmara, Odilon
    Abstract: We develop a theory of credible skepticism in organizations to explain the main tradeoffs in organizing data generation, analysis, and reporting. In our designer-agent-principal game, the designer selects the information privately observed by the agent who can misreport it at a cost, whereas the principal can audit the report. We study three organizational levers: tampering prevention, tampering detection, and the allocation of the experimental-design task. We show that motivating informative experimentation while discouraging misreporting are often conflicting organizational goals. To incentivize experimentation, the principal foregoes a flawless tampering detection/prevention system and separates the tasks of experimental design and analysis.
    Keywords: strategic experimentation; Bayesian persuasion; tampering; organizational design; information technology; audit
    JEL: D80 D83 M10
    Date: 2023–07–18
  3. By: Redonda, Agustin; Von Haldenwang, Christian; Berg, Sofia
    Abstract: Tax expenditures are deviations from the benchmark tax system which provides preferential tax treatment. Governments use them to pursue different policy goals, such as boosting innovation, creating employment or greening the economy. Their fiscal cost can be significant since the global average revenue forgone, estimated at around 4% of GDP and 25% of tax revenue, has remained stable over the last 30 years. Evaluating tax expenditures against their stated policy objectives and the potential side effects or externalities they might trigger is a crucial step for the rationalization of tax expenditures, with implications for domestic resource mobilization and the alignment of tax policies with growth and development strategies. This report analyses tax expenditure evaluation as a key element of the tax expenditure policy cycle and highlights the need for integrated frameworks that link ex-ante assessments with ex-post evaluations. It also provides an international overview of the state of tax expenditure evaluations, showing that it remains relatively underdeveloped, not only in Latin America and the Caribbean, but also across the world.
    Date: 2023–11–06
  4. By: Cole, Brittany; Hatch, Laura; Mehlhorn, Joey
    Abstract: This article focuses on optional business certifications that students can obtain while they are completing their undergraduate degree program. These certifications can benefit students in the job market and be helpful in supplementing real world business training in curriculum and address any skill gaps. Several business certifcaitons are represented with pertinent information on the process and benefits of certificate completion. The list of certificates is not meant to be exhaustive, but gives a starting point for business faculty looking to provide opportunities for student career development.
    Keywords: undergraduate education, industry certifications, industry preparation, business education, career readiness
    JEL: M1
    Date: 2023–09–30
  5. By: Qing Li (Department of Economics and Finance, SILC Business School, Shanghai University); Kexing Yu (Department of Economics and Finance, SILC Business School, Shanghai University); Yanrui Wu (Business School, The University of Western Australia)
    Abstract: This paper aims to re-estimate green total factor productivity (GTFP) with the consideration of intangible capital in Chinese provinces during 2003 and 2017. Intangible capital is broadly defined and categorised into computerised information, innovative property and economic competency property. The finding suggests that the conventional GTFP is underestimated especially during the post-financial crisis period in China. It is also found that technical efficiency, which shows the trend of deterioration without capitalising intangibles, improves steadily and jointly with technological progress contributes to the improvement of productivity. The mismeasurement of GTFP is more severe in developed regions in China where intangible investment is more emphasised. Furthermore, regional GTFP shows the trend of convergence after intangible capital is incorporated and the rate of convergence turns to be faster in coastal regions than that in the interior.
    Keywords: Green total factor productivity, intangible capital, data envelopment analysis, China
    JEL: O47 O34 R11
    Date: 2023

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