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on Accounting and Auditing |
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Issue of 2024‒06‒24
six papers chosen by |
| By: | Murzasheva, Zhanna; Syyabekov, Argen; Biymyrsaeva, Aidana; Arzybaev, Atabek; Zhanuzakov, Bolotbek; Biymyrsaeva, Erkegul |
| Abstract: | Abstract: The transition to International Financial Reporting Standards (IFRS) will enable Kyrgyz Republic to strengthen investor confidence by increasing transparency, comparability, understandability, and reliability of financial reporting and will maintain a steady trend of integration into the world economy. It is well known that accounting is a product of socio-economic conditions. Therefore, each country needs to have an accounting system compatible with the environment in which they are applied. For the information presented in an organisation's financial statements to be helpful to users of this reporting, it is clear that the reports must be comparable. Both shareholders and potential investors, along with other users of financial statements, study not just the financial condition, cash flows and financial results of the organisation in one specific period but also evaluate the general trends in changes in financial performance. For these trends to be assessed, an entity must consistently apply the same accounting principles and policies, and any deviation from them must be clearly described in the notes to the financial statements. |
| Keywords: | Key words: Financial reporting, financial analysis, accounting, IFRS, accounting methods, competitiveness, assets, liabilities forecasting. |
| JEL: | M48 |
| Date: | 2024–05–06 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121053&r= |
| By: | Lee, King Fuei |
| Abstract: | This paper introduces a catering hypothesis of ESG disclosure, where managers adjust their disclosure policies based on investor valuation of high-disclosure companies. The study examines 2, 207 US-listed firms from 2005-2022, and finds a significant positive relationship between the ESG disclosure premium and firm ESG reporting. Managers respond to prevailing investor demand for ESG data by disclosing more when investors place a stock price premium on companies with high disclosure levels and disclosing less when investors prefer companies with low disclosure levels. This research enriches sustainability accounting literature by exploring the impact of managerial decision-making and investor demand on ESG disclosure, providing insights for stakeholders and policy development. It also expands understanding of the connection between corporate policy, sustainability, and catering considerations, benefiting stakeholders, directors, and investors interested in improving ESG practices and capital allocation for sustainable development. |
| Keywords: | ESG disclosure, ESG reporting, sustainability reporting, catering incentives, catering effects, disclosure premium |
| JEL: | M41 Q5 Q56 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120930&r= |
| By: | Nadeem Ul Haque (Pakistan Institute of Development Economics); Khurram Ellahi Khan (Pakistan Institute of Development Economics); Nadeem Khan (Pakistan Institute of Development Economics); Hassan Rasool (Pakistan Institute of Development Economics) |
| Abstract: | The issues and challenges surrounding Principal Accounting Officers (PAOs) in Pakistan center on the authoritative financial autonomy, paradox of delegation, economic efficiency, and the absence of “skin in the game.†The centralized role of PAOs, typically held by senior-most secretaries, hampers decision-making efficiency. Despite attempts at delegation, clauses in the Financial Management and Powers of Principal Accounting Officers Regulations 2021 create a paradox by reverting crucial information back to the Secretary, questioning the effectiveness of the delegated authority. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pid:kbrief:2024:122&r= |
| By: | Bloomfield, Matthew J.; Heinle, Mirko; Timmermans, Oscar |
| Abstract: | Many firms use relative stock performance to evaluate and incentivize their CEOs. We document that such firms routinely disclose information that harms their peers' stock prices, and sometimes explicitly mention the harmed peers, by name, in these disclosures. Consistent with deliberate sabotage, peer-harming disclosures appear to be aimed at peers whose stock price depressions are most likely to benefit the disclosing firms' CEOs. The pricing effect of these disclosures does not reverse, suggesting that the disclosures contain legitimate information regarding peers' prospects. In sum, our results suggest that relative performance evaluation in CEO pay motivates CEOs to internalize the externalities of their disclosures, and strategically disclose information that harms peers' stock prices, in order to improve their firms' relative standing within their peer group. |
| Keywords: | relative performance evaluation; peer-harming actions; voluntary disclosure; sabotage; stock returns; capital markets |
| JEL: | G12 G14 J33 M41 |
| Date: | 2024–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122509&r= |
| By: | Ivan T. Ivanov; Luke Pettit; Toni Whited |
| Abstract: | We use variation in state corporate income tax rates to re-examine the relation between taxes and corporate leverage. Contrary to prior research, we find that corporate leverage rises after tax cuts for small private firms. An estimated dynamic equilibrium model shows that tax cuts make capital more productive and spur borrowing. Tax cuts also produce more distant default thresholds and lower credit spreads. These effects outweigh the lower interest tax deduction and lead to higher optimal leverage choices, especially for firms with flexible investment policies. The presence of the interest tax deduction raises consumer welfare in equilibrium. |
| JEL: | G31 G32 H25 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32398&r= |
| By: | Paula C. Pereda; Taina Portela; Patricia Ravaioli |
| Abstract: | The need for a tax reform in Brazil stems from the country's complex tax system, which has contributed to decreased productivity and hindered investments. The Brazilian Tax Reform, approved in December 2023, introduces a Value-Added Tax (VAT) system comprising a federal VAT (CBS), a local VAT (IBS), and a selective tax (IS) on products with negative health and environmental externalities. This study explores the potential impacts of various scenarios of the reform on consumption, using data from the latest Household Budget Survey (POF 2017-2018). Our findings indicate that a broader tax reform (in terms of food basket exemptions and selective taxes on ultraprocessed products) could result in a decrease in 6.92% of government tax collection on consumption. However, consumption patterns would shift significantly, with a sharp increase in healthy food consumption and decrease in ultra-processed food. The scenario considering the newest tax rate proposal (more conservative in terms of the exemptions and considering the selective tax only on one type of ultraprocessed product, sweetened drinks) suggests an increase in government revenue but highlights reductions in in natura and ultra-processed product consumption. These results underscore the reform's potential to influence consumption patterns and the balance between generating tax revenue and ensuring affordability of essential goods. |
| Keywords: | tax reform; ultraprocessed foods; impacts on consumption |
| JEL: | H51 I18 R28 |
| Date: | 2024–06–07 |
| URL: | https://d.repec.org/n?u=RePEc:spa:wpaper:2024wpecon17&r= |