nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2024‒04‒08
eight papers chosen by

  1. The impact of changes to auditors' reporting and audit committee strength on bank directors' perceptions and decisions: An experimental investigation By Höfmann, Michelle; Pott, Christiane; Quick, Reiner
  2. Carbon emission statements: Balance sheets and flow statements By Reichelstein, Stefan
  3. Estimate of hidden activity for the 2020 benchmark revision of national accounts By C. Welter-Medee; S.Quantin
  4. Turnover-based corporate income taxation and corporate risk-taking By Siahaan, Fernando; Amberger, Harald; Sureth, Caren
  5. How to Tax Wealth By Mr. Shafik Hebous; Mr. Alexander D Klemm; Geerten Michielse; Ms. Carolina Osorio Buitron
  6. Are Trade Rules Undermining Taxation of the Digital Economy in Africa? By Banga, Karishma; Beyleveld, Alexander
  7. The design of presumptive tax regimes in selected countries By Mariona Mas-Montserrat; Céline Colin; Bert Brys
  8. The paradoxes of CSR instrumentation: making CSR a lever for organizational learning By Amaury Grimand

  1. By: Höfmann, Michelle; Pott, Christiane; Quick, Reiner
    Date: 2023–05–04
  2. By: Reichelstein, Stefan
    Abstract: Current corporate disclosures regarding carbon emissions lack generally 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 Carbon Emissions (CE) balance sheets and flow statements. 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 company's annual corporate carbon footprint calculated as the cradle-to-gate carbon footprint of goods sold during the current period. Taken together, balance sheets and flow statements generate key performance indicators of a company's past, current and future performance in the domain of carbon emissions.
    JEL: M41 M48 Q53 Q54
    Date: 2023
  3. By: C. Welter-Medee (Insee CREST); S.Quantin (Insee)
    Abstract: This study proposes an estimate of the unobserved activity of registered firms. The purpose of this estimate is to update the estimates currently used in national accounts for estimating gross domestic product, which covers all activities carried out on the territory, including those that are hidden. The study is based on tax audit management data from the DGFiP. By assimilating the sample of audited companies to survey respondents, the undeclared turnover and omissions or undue declarations of intermediate consumption observed during tax audits can be extrapolated to all non-financial companies and sole proprietorships in the field of national accounting. This extrapolation requires taking into account the process that led to the selection of firms subject to these audits, since it may generate a significant selection bias. For this purpose, we adopt the two-step methodology already implemented in Quantin et Welter-M d e (2022). The first step aims to estimate a weight for each controlled firm and is inspired by methods of nonresponse adjustment by reweighting. In a second step, based on these weights, we extrapolate the undeclared turnover and the omissions or undue declarations of intermediate consumption by ratio estimators applied to groups of firms with homogeneous declarative behavior. We estimate the total amount of undeclared turnover to be 33.1 billion euros and the underestimation of intermediate consumption expenditures to be 1.5 billion euros for 2014. This second amount corresponds to 8.0 billion euros of undeclared intermediate consumption expenses, less 6.5 billion euros of undue declarations of intermediate consumption. In total, this results in an unobserved amount of value added of 31.6 billion euros, slightly less than the undeclared turnover.
    Keywords: Machine Learning, Selection Bias, Fiscal Audits, National Accounts
    JEL: C55 C83 H26 E01
    Date: 2023
  4. By: Siahaan, Fernando; Amberger, Harald; Sureth, Caren
    Abstract: This study investigates the effect of a Turnover-based Corporate Income Tax (TbCIT) on corporate risk-taking. TbCIT is a simplified presumptive tax levied on a firm's turnover and commonly applied to SMEs and hard-to-tax income. Using a rich sample of Indonesian firms for the years 2009 to 2021, we provide evidence that corporate risk-taking is negatively associated with a firm's TbCIT exposure. The negative effect is stronger for firms in industries with high profit margins and firms with prior year losses. However, we find no association between risk-taking and the effective TbCIT rate. Overall, our findings extend prior research on the effects of limited risk sharing between taxpayers and the government by showing that turnover-based taxation can depress corporate risk-taking. Our study also informs policymakers about potential unintended consequences of adopting simplified, turnover-based tax regimes.
    Keywords: turnover-based tax, corporate income tax, risk-taking, SMEs taxation
    JEL: H25 H32 G32 O53
    Date: 2023
  5. By: Mr. Shafik Hebous; Mr. Alexander D Klemm; Geerten Michielse; Ms. Carolina Osorio Buitron
    Abstract: Tackling income and wealth inequality is at the top of the policy agenda in many countries. This note discusses three approaches of wealth taxation, based on (1) returns with a capital income tax, (2) stocks with a wealth tax, and (3) transfers of wealth through an inheritance (or estate) tax. Taxing actual returns is generally less distortive and more equitable than a wealth tax. Hence, rather than introducing wealth taxes, reform priorities should focus on strengthening the design of capital income taxes (notably capital gains) and closing existing loopholes, while harnessing technological advances in tax administration—including cross-border information sharing—to foster tax compliance. The inheritance tax is important to address the buildup of dynastic wealth.
    Keywords: income inequality; wealth inequality; wealth tax; capital income tax; estate tax; capital gains; tax loopholes; tax administration
    Date: 2024–03–08
  6. By: Banga, Karishma; Beyleveld, Alexander
    Abstract: In the face of emerging and new digital business models, countries are facing a political and technical choice of adapting the existing taxation instruments of corporate income tax (CIT) and value added tax (VAT) or creating new ones, such as digital services taxes (DSTs) and customs duties on electronic transmissions (CDETs). Countries have the potential to tax the digital economy through a combination of at least these four measures, which can be incorporated into their industrial policy and revenue collection strategies.
    Keywords: Governance,
    Date: 2024
  7. By: Mariona Mas-Montserrat; Céline Colin; Bert Brys
    Abstract: Presumptive tax regimes (also known as simplified tax regimes) intend to reduce tax compliance costs for micro and small businesses (and enforcement costs for the tax administration) while levying a lower tax burden as compared to the standard tax system. This working paper compiles detailed information on the presumptive tax regimes existing in a selection of OECD and non-OECD countries, identifies common practices adopted across the countries examined and provides multiple examples of best practices observed in these regimes. These examples can serve as guidance to policy makers and tax administrations to strengthen particular features of the presumptive tax regimes implemented in their jurisdictions. Lastly, the paper highlights the main challenges generally observed in the presumptive tax regimes under study, which might undermine the role of these regimes in incentivising business formalisation and strengthening tax compliance over time.
    Keywords: micro and small business taxation, presumptive tax regimes, simplified tax regimes, tax policy design
    JEL: H25
    Date: 2024–03–19
  8. By: Amaury Grimand (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université)
    Abstract: CSR instrumentation, in particular extra-financial reporting, has experienced considerable growth in recent years. While it reflects the growing institutionalization of CSR, the proliferation of CSR tools raises questions, even controversies, about their design and logic of use. However, academic research on CSR has so far paid little attention to thinking in terms of managerial instruments. This chapter aims to analyze the conditions for an efficient use and appropriation of CSR instruments. After recalling the role of managerial tools in organizational dynamics, the chapter highlights some paradoxes that CSR instrumentation cristallyses: its interpretative flexibility, its claim to univeralism and to embrace the expectations of all stakeholders, the instrumental promise it conveys which is based on quantification of quality, the implicit view of an alignement of stakeholders' interests, which obscures politics. The discussion suggests some avenues that might help address theses paradoxes. It calls for a more open conception, or even a co-construction of CSR instrumentation that makes it not only a vector for constraigning behaviors but also a lever for organizational learning.
    Keywords: Paradoxes - CSR instrumentation - Organizational learning
    Date: 2022–08–08

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