nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2024‒04‒01
four papers chosen by

  1. Carbon Emission Statements: Balance Sheets and Flow Statements By Reichelstein, Stefan
  2. Cashless payments and tax evasion: Evidence from VAT gaps in the EU By Bohne, Albrecht; Koumpias, Antonios M.; Tassi, Annalisa
  3. "Quantifying sovereign risk in the euro area" By Manish K. Singh; Marta Gómez-Puig; Simón Sosvilla-Rivero
  4. Artificial Intelligence and Intellectual Property : An Economic Perspective By Alexander Cuntz; Carsten Fink; Hansueli Stamm

  1. By: Reichelstein, Stefan (U of Mannheim and Stanford U)
    Abstract: Current corporate disclosures regarding carbon emissions lack commonly accepted accounting rules. The carbon accrual accounting system described here takes the rules of historical cost accounting for operating assets as a template for generating a Carbon Emissions (CE) balance sheet and flow statement. The asset side of the CE balance sheet reports the carbon emissions embodied in operating assets. The liability side conveys the firm's cumulative direct emissions into the atmosphere as well as the cumulative emissions embodied in goods acquired from suppliers less those sold to customers. Flow statements report the cradle-to-gate carbon footprint of goods sold during the current period. Taken together, balance sheets and flow statements generate key indicators of a company's past, current and future performance with regard to carbon emissions.
    JEL: M41 M48 Q53 Q54
    Date: 2023–10
  2. By: Bohne, Albrecht; Koumpias, Antonios M.; Tassi, Annalisa
    Abstract: This paper explores the connection between the proliferation of cashless, or e-money, payments and value-added tax (VAT) compliance. We present both visual and descriptive evidence that illustrates a negative correlation between e-money use and VAT evasion, proxied by the VAT compliance gap for countries in the European Union, from 2001 until 2021. We find that increased e-money usage by 100 percentage points (pp) is associated with a reduction in the VAT gap of 0.3pp or 1.92% of the aggregate VAT compliance gap over time. Moreover, we contribute a novel estimate of the causal impact of cashless payments on VAT evasion during the COVID-19 public health emergency. We identify a link between mobility restrictions in the European Union and reductions in VAT compliance gaps, facilitated by changes in payment norms. An estimated rise of 1pp or 5.51% in e-money use results in an 11.9% reduction in the VAT compliance gap. Our findings suggest that changes in transaction payment behavior such as the adoption of cashless payments may yield significantly more tax revenues by curbing non-compliance. Policies aimed at promoting e-money usage and limiting cash circulation are relevant steps forward in this direction.
    Keywords: Tax evasion, VAT gap, cashless payments, e-money, mobility restrictions, COVID-19 pandemic
    JEL: H26 K42
    Date: 2023
  3. By: Manish K. Singh (Department of Management Studies, Indian Institute of Technology Delhi.); Marta Gómez-Puig (Department of Economics & Riskcenter, Universitat de Barcelona, Spain.); Simón Sosvilla-Rivero (Complutense Institute for Economic Analysis, Universidad Complutense de Madrid, 28223 Madrid, Spain. T: +34-913 942 342.)
    Abstract: The choice of the optimal sovereign risk indicator is crucial in the context of the euro area (EA) countries, which faced a fierce sovereign debt crisis. Traditional indicators of sovereign risk (CDS, bond yields, and credit rating) do not take into consideration the priority structure of creditors and are highly influenced by market sentiment. We propose a new indicator (DtD) to quantify sovereign risk for eleven EA countries over the period 2004Q1-2019Q4. Using contingent claims’ methodology, DtD incorporates the seniority structure of creditors in an existing theoretical model. Our results suggest that (1) DtD is a leading indicator of sovereign risk and (2) adding information from the public sector’s balance sheet structure to market information, helps better incorporate macroeconomic fundamentals in the sovereign risk measure, overcoming some of the weaknesses documented in the traditional indicators.
    Keywords: Sovereign default risk, Euro area countries, Contingent claims, Distance-to- default. JEL classification: E62, H3, C11.
    Date: 2024–02
  4. By: Alexander Cuntz; Carsten Fink; Hansueli Stamm
    Abstract: The emergence of Artificial Intelligence (AI) has profound implications for intellectual property (IP) frameworks. While much of the discussion so far has focused on the legal implications, we focus on the economic dimension. We dissect AI's role as both a facilitator and disruptor of innovation and creativity. Recalling economic principles and reviewing relevant literature, we explore the evolving landscape of AI innovation incentives and the challenges it poses to existing IP frameworks. From patentability dilemmas to copyright conundrums, we find that there is a delicate balance between fostering innovation and safeguarding societal interests amidst rapid technological progress. We also point to areas where future economic research could offer valuable insights to policymakers.
    Keywords: Artificial Intelligence, Intellectual Property, Patents, Copyright
    Date: 2024–03

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