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on Accounting and Auditing |
| By: | Gazilas, Emmanouil Taxiarchis; Belesis, Nicholas; Kampouris, Christos |
| Abstract: | With an emphasis on the influence of Big Four auditors in the US between 2000 and 2024, this paper explores the factors that influence audit fees and associated non-audit fees. We examine trends in audit, tax-related, and miscellaneous fees using a dataset that includes 1, 187 auditors and 13, 822 distinct entities across 1, 315 sectors. In order to determine if the Big Four auditors—Deloitte, PwC, EY, and KPMG—command a higher cost for their services, we examine how firm-specific factors like revenue, assets, book value, and earnings affect fee structures. This study looks at both linear and non-linear associations using advanced econometric methods, such as multiple regression analysis and non-parametric Wilcoxon rank-sum tests. It additionally incorporates interaction variables to account for differences between Big Four and non-Big Four auditors. The findings reveal that companies audited by Big Four auditors pay significantly more, which is symptomatic of their perceived market dominance and audit quality. While non-audit fees demonstrate clear trends impacted by auditor type, larger businesses with higher revenues and assets are also linked to higher rates. |
| Keywords: | Audit Fees, Big Four Auditors, Audit Quality, Corporate Governance, United States of America. |
| JEL: | M41 M42 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123383 |
| By: | Houda Alhoussari (Prince Sultan University [Riyad], IODE - Institut de l'Ouest : Droit et Europe - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This study explores the integration of Environmental, Social, and Governance (ESG) principles into corporate practices, focusing on the methodologies used for their evaluation and the factors influencing their adoption. Through a qualitative and comparative analysis of European and Saudi Arabian contexts, the research examines how companies align their strategies with ESG requirements in diverse regulatory and cultural environments. Data is drawn from established ESG rating agencies, corporate sustainability reports, and case studies, allowing for a thorough investigation of internal and external evaluation processes and their implications for ESG scores. The study identifies key challenges in ESG implementation, including ambiguities in definitions, resource disparities, sector-specific considerations, and resistance due to cost or unfavorable ratings. It also highlights the role of legal and regulatory frameworks, such as the ESG Disclosure Guidelines introduced by the Saudi Capital Market Authority and global standards like the Global Reporting Initiative (GRI), in shaping corporate ESG practices. Recommendations emphasize the need for standardized evaluation criteria, targeted support for smaller enterprises, and stronger legal frameworks to promote transparency and compliance. The findings contribute to a deeper understanding of ESG dynamics and provide actionable insights for advancing corporate sustainability on a global scale. |
| Keywords: | Environmental Social and Governance (ESG), Corporate Sustainability, Corporate Accountability and Transparency, Evaluation Methodologies, Companies |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04883833 |
| By: | Louis Fargier (COACTIS - COnception de l'ACTIon en Situation - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne, UJM - Université Jean Monnet - Saint-Étienne) |
| Abstract: | In this study, we examine the market's reaction to four events that we have identified as significantly increasing the likelihood of the adoption of a directive in the European Union strengthening requirements in terms of extra-financial information disclosure. We expect and observe an average negative overall market reaction. We show that investors perceive the costs (direct and indirect) induced by this directive as far outweighing the expected benefits. In addition, we show that, for companies that have already incurred part of the direct costs, the market reaction is less negative. Our research contributes to the literature on investors' perceptions of the regulatory changes surrounding non-financial information, and on investors' expectations of corporate non-financial communication. These results also have empirical utility, given the many current debates on the latest regulatory developments, particularly on the applicability of CSRD. Although we do not provide a direct answer to this question, we are able to highlight the concerns felt by investors regarding the adoption of this directive. |
| Abstract: | Dans cette étude, nous examinons la réaction du marché à quatre événements que nous avons identifiés comme accroissant significativement la probabilité d'adoption d'une directive dans l'Union Européenne renforçant les exigences en termes de divulgation d'informations extrafinancières. Nous prévoyons et constatons une réaction globale moyenne négative du marché. Nous montrons que les investisseurs perçoivent les coûts (directs et indirects) induits par cette directive comme largement supérieurs aux avantages attendus. De plus, nous démontrons que, pour les entreprises ayant déjà engagé une partie des coûts directs, la réaction du marché est moins négative. Notre recherche contribue à enrichir la littérature, d'une part sur la perception de l'évolution réglementaire entourant l'information extra-financière par les investisseurs, et d'autre part, sur les attentes des investisseurs vis-à-vis de la communication extra-financière des entreprises. Ces résultats revêtent également une utilité empirique, étant donné les nombreux débats actuels sur les dernières évolutions réglementaires, notamment sur l'applicabilité de la CSRD. Bien que nous ne fournissions pas une réponse directe à cette question, nous sommes en mesure de mettre en évidence les inquiétudes ressenties par les investisseurs quant à l'adoption de cette directive. |
| Keywords: | non-financial reporting, event study, market reaction, CSRD, reporting extra-financier, étude d'événements, réaction du marché CSRD |
| Date: | 2024–05–29 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04890383 |
| By: | Rosella Levaggi; Francesco Menoncin; Andrea Modena |
| Abstract: | Tolerating tax evasion may increase debt less than an equivalent tax cut. In our model, utility-maximizing entrepreneurs earn income from risky production technologies and risk-free bonds. The government uses income taxes and bonds to finance its expenses. Entrepreneurs can evade taxes at the risk of being audited and fined. Aggregate tax evasion and debt-to-GDP are positively related in equilibrium. Nevertheless, reducing effective tax rates by tolerating evasion may generate a lower debt-to-GDP ratio (but also lower growth) than equivalent debt-financed nominal tax cuts. Policies are equivalent with log utility. |
| Keywords: | Dynamic tax evasion; general equilibrium; public debt. |
| JEL: | D5 E6 H2 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_623 |
| By: | Tim Bayer; Lenard Simon; Jakob Wegmann |
| Abstract: | To collect income taxes, almost all countries require employers to withhold monthly tax prepayments which are then fully credited against the őnal income tax liabilities of their employees. Despite being a fundamental component of income taxation systems worldwide, the impact of these withholding taxes on labor supply is poorly understood. We investigate their importance in the context of married couples in Germany where the withholding tax liability can be redistributed between spouses. We exploit a reform that reduced the withholding tax for some marriedwomen more than for others, while inducing no differences in income taxes. Using administrative data for the full population of German taxpayers, we estimate an elasticity of labor income with respect to the withholding tax eight years after the reform of 0.14. Additional evidence from a self-conducted survey suggests imperfect understanding of the tax system and limited pooling of resources within the household as the main mechanisms. As the majority of couples shift parts of the withholding tax liability from the husband to the wife, our results suggest that the increased withholding tax liability of married women contributes to their low labor supply. This highlights the need for governments to be aware of the distortion of labor supply incentives when the design of withholding taxes does not match actual income tax incentives. |
| Keywords: | Withholding Taxes, Income Taxation, Gender, Labor Supply |
| JEL: | H21 H31 J16 J20 K34 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_631 |
| By: | Ozili, Peterson K |
| Abstract: | Loan loss provision is an important accounting number in the banking sector. This study investigates the determinants of loan loss provisions in non-crisis years in 28 countries from 2011 to 2018. The countries consist of African, European, and Asian countries. Using the generalized linear model regression and the quantile regression methodology, the results show that institutional quality is a significant determinant of bank loan loss provisions, indicating that the presence of strong institutions decrease the size of bank loan loss provisions. In the regional analyses, it was found that economic growth is a significant determinant of bank loan loss provisions in African and Asian countries. Loan loss provisions are higher in times of economic prosperity in African and Asian countries. This might be due to counter-cyclical provisioning which require African and Asian banks to keep higher loan loss provisions in good economic times so that the high provisions that was set aside in good times could be used as a safety buffer during times of economic downturns in African countries. Bank overhead cost is also a significant determinant of bank loan loss provisions only in Asian countries. |
| Keywords: | financial reporting, accruals, loan loss provisions, banks, income smoothing, earnings management, noninterest income, overhead costs, institutional quality |
| JEL: | G1 G18 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123289 |
| By: | Silvia Appelt; Matej Bajgar; Chiara Criscuolo; Fernando Galindo-Rueda |
| Abstract: | Recent firm-level studies find R&D tax incentives to be much more effective at stimulating firms' R&D investment than what aggregate analyses indicate. Based on a distributed analysis of official R&D survey and administrative tax relief micro-data for 19 OECD countries, we show that two factors can reconcile these contrasting results. Firstly, a limited uptake of R&D tax incentives in most countries makes aggregate studies underestimate the effectiveness of R&D tax incentives. Secondly, R&D tax incentives are (much) less effective for large and R&D-intensive firms, which account for a small share of R&D-performing firms but most aggregate R&D tax relief, making firm-level studies overstate the aggregate effectiveness of R&D tax incentives. |
| Keywords: | mental health, employment, earnings, policy evaluation, psychological therapies |
| Date: | 2025–01–29 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2071 |
| By: | Carina Neisser (University of Cologne & IZA); Nils Wehrhöfer (Deutsche Bundesbank) |
| Abstract: | Public disclosure laws on politicians’ outside income aim to enhance electoral accountability, but their effects remain unclear and may backfire. Using a German disclosure reform, administrative tax data, and a difference-in-difference design, we show that MPs increased their outside income after public disclosure. We find suggestive evidence that the effect is driven by right-leaning MPs. A survey among voters shows that perceptions of outside income differ by party alignment: right-leaning voters view it as a sign of competence, while left-leaning voters associate it with weaker voter representation. These findings highlight the complex interplay between transparency, voter perception, and political behavior. |
| Keywords: | Tax data, outside income, politicians, income disclosure |
| JEL: | D72 D83 J45 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:354 |
| By: | Antonina Levashenko (Russian Foreign Trade Academy Ministry of economic development of the Russian Federation); Kirill Chernovol (Russian Foreign Trade Academy Ministry of economic development of the Russian Federation) |
| Abstract: | The subject of the study is the system of measures of state support and monitoring of the non-profit sector in Russia, including measures to identify certain types of non-profit organizations (SONPO, FCC), compiling registers of such organizations, as well as mechanisms for collecting data on the non-profit sector. The relevance of the study is due to the need to improve the mechanisms of state support for the non-profit sector, taking into account its contribution to the economy and eliminating existing gaps in legal regulation. Currently, there is duplication of reporting requirements, the absence of a single register of socially oriented non-profit organizations and difficulties in identifying such organizations, which complicates their access to support measures. The problems of inconsistency between regional and federal lists of types of activities of SONPO, as well as the lack of effective accounting of NPOs - owners of endowment capital indicate the need to unify legal regulation and develop comprehensive monitoring tools. In addition, improving the methods for assessing the contribution of the non-profit sector to the economy will allow for the formation of more objective and balanced management decisions aimed at developing charity, volunteering and social entrepreneurship. The purpose of the study is to prepare proposals for improving state support measures for the non-profit sector based on its monitoring and forecasting. The methodology of the work is based on the use of methods of logical, systemic, comparative legal analysis, as well as economic modeling. In preparing the work, Russian and foreign regulatory legal acts, as well as analytical materials, were used. The result of the study were proposals for improving state support for the non-profit sector, including the creation of a single register of NPOs, unification of their types of activities, improvement of reporting and accounting of contribution to the economy. Measures have been developed to harmonize the legal regulation of NPOs, indicators for monitoring and rating regions have been improved, and recommendations have been given for the development of charity and volunteerism. |
| Keywords: | non-profit organizations, charitable activities, volunteer work, economic impact assessment, support for the non-profit sector, monitoring of the non-profit sector |
| JEL: | K33 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:alq:wpaper:2024_2 |