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on Accounting and Auditing |
| By: | Asmae Ez-Zaidi (National School of Business and Management – ENCG Settat, Hassan The First University, Settat, Morocco.); Youssef Ghandari (National School of Business and Management – ENCG Settat, Hassan The First University, Settat, Morocco.) |
| Abstract: | Abstract: The financial scandals that erupted in the early 2000s prompted a profound re-evaluation of the quality of audits of listed companies' financial statements. The involvement of large audit firms in these cases demonstrated that an approach based on the sizeof the auditor is an insufficient measure of audit quality. This measurement approach considers that the competence and independence of the auditor are reliable substitutes for audit quality. However, it disregards the methods and tools used by the audit firm in its engagements. It is more appropriate to adopt an approach based on the audit process as an indicator of quality. This process has become increasingly complex as the volume of data processed has grown. It therefore requires the integration of high-performance technologies to carry out audit work in an effective and efficient manner. This article aims to analyze the impact of three major financial scandals (Enron, Vivendi and Parmalat) on audit quality. Through a thorough review of the literature, it highlights the foundations of the audit quality approach based on the audit process, comparing it with the traditional approach. It then presents the revolutionary technologies used in this process, namely CAAT, BDA and AI, while clarifying the theories that frame their implementation. It also outlines the advantages of these technologies, their risks and the challenges of their adoption. It examines the success of these tools in addressing the deterioration in audit quality following financial scandals, and proposes a research model linking their use to improvements in audit quality. These technologies, widely adopted by auditors in their work, have demonstrated high performance in terms of anomaly detection, accuracy and speed of execution of audit tasks. |
| Keywords: | financial scandals, audit quality, technologies, audit process, audit firm |
| Date: | 2025–11–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05366347 |
| By: | Sarah Clifford (University of Oxford); Jakob Miethe (University of Munich (LMU)); Camille Semelet (University of Munich (LMU), ifo institute, and World Bank) |
| Abstract: | This paper characterizes profit shifting behavior across the size distribution of multinational enterprises (MNEs) to evaluate the targeting of the recently introduced Global Minimum Tax (GMT). Using German microeconomic administrative data with no reporting gaps for tax havens, we first document reductions in tax payments after tax haven subsidiaries are added to a group and confirm their outsized productivity. As group size increases, so does the likelihood of including tax haven subsidiaries. Second, we introduce a new methodology to estimate shifted profits at the group level and find an exponential group size gradient in profits shifted to tax havens. A total of EUR 19 billion was shifted to tax havens by German MNEs in 2022. Large groups targeted by the GMT account for 95% of this amount. While this is mainly a function of their size, we also document a positive gradient in profit shifting aggressiveness relative to employment. Third, we relate revenue potential from taxing excess profits in low-tax jurisdictions to compliance costs of the GMT, using a 15% benchmark rate. For groups currently covered by the GMT, revenue gains significantly dominate costs, while extending coverage to additional groups yields only modest net gains. Our results support policy consistency of the GMT in the face of recent unilateral challenges. |
| Keywords: | Global Minimum Tax, Multinational Enterprises, Profit Shifting |
| JEL: | H26 G38 F34 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:dbp:wpaper:035 |
| By: | Carmen Elena Stoenoiu (Technical University of Cluj-Napoca, Memorandumului 28, 400114, Cluj-Napoca, Romania Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | " Objective - The current empirical research provides a bibliometric analysis over a five-year period in the field of changes generated by digital transformation in the accounting and auditing profession. It examines the evolution of the field, identifying key contributors through publications, while tracking changes and trends through the opportunities and threats related to the introduction of digital technologies. The study also highlights critical implications, especially in assessing the long-term effects on the need for curriculum changes for new competencies, the need for certifications and the creation of regulatory frameworks. Methodology/Technique – Bibliometric analysis was carried out using data from the Web of Science database, through performance analysis and specific scientific mapping techniques. VOSviewer software was used to analyze co-occurrence and obtain thematic clusters, providing an overview of the evolution of digital transformation in the accounting and auditing profession. Through the analysis of opportunities and threats, 4 groups resulted: I. Technological Field (Blockchain, Artificial Intelligence, Big Data), II. Accounting and Financial Reporting Field, III. Audit and Assurance Field and IV. The Governance and Regulation Domain resulted in a complex set of information related to adaptation (benefits/costs), new security requirements and the prospect of appropriate governance and regulatory frameworks. Findings – Current research has adapted in response to technical and economic priorities regarding the need for firms to perform and the challenges generated by digital technology at a global level. Initial studies focused on the effect among profile companies (large and small), highlighting the costs and impossibility of adaptation for small firms, but also on ethical and governance issues. Since then, attention has expanded because of advances in technology, reflecting growing concerns about professional replacement and the need for accountability, while emphasizing the need for stricter enforcement of repetitive activities to increase performance. Subsequently, the debates have stabilized with arguments for and against showing that the accounting and auditing profession will not disappear but will only undergo a transformation through additional requirements related to new skills. Although there are differences in size at the firm level, development at the national level, but also in regulation in the field, the study shows us that the opportunities are multiple and exploration continues. Novelty – This study presents empirical evidence on the evolution of research in digital technology applicable to the accounting and auditing profession over five years, being a robust reference framework for future research, providing valuable information to universities, which can update their study programs to align them with the current needs of the profession, and providing employers with a solid basis to assess future trends and the need to align both the material and human resources base through a gradual correlation with new competencies among professionals/employees. Type of Paper - Empirical" |
| Keywords: | Implications for Accounting and Auditing Services, Digital transformation in accounting and auditing, Blockchain, Artificial Intelligence, Big Data in Accounting and Auditing. |
| JEL: | G38 M21 M49 O33 J24 F36 |
| Date: | 2025–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:jfbr232 |
| By: | David Henning; Christos Kotsogiannis; Jukka Pirttilä; Luca Salvadori |
| Abstract: | Making use of a rich administrative dataset on Ugandan firms' tax filings covering the period 2013-21, this paper investigates the impact of tax audits on voluntary compliance, contrasting the effect of one vs multiple audits. Using a matched difference-in-differences approach with similar unaudited firms as controls, and a stacked design to address staggered treatment timing, the analysis shows that among firms that consistently file taxes over the study period, audits induce higher value added tax (VAT) liabilities. |
| Keywords: | Taxation, Audits, Tax evasion, Tax administration, Tax compliance |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-110 |
| By: | Alice Chiocchetti (Paris School of Economics); Manon François (Stanford University); Laure Heidmann (CREST and INSEE); Giulia Aliprandi (Paris School of Economics and EU Tax Observatory) |
| Abstract: | This paper quantifies how profit shifting erodes workers’ earnings by reducing profit-sharing payouts in French multinational firms. We leverage newly available administrative microdata on the global activity of multinational firms linked to employer-employee data to build a credible counterfactual of profits and profit-sharing absent profit shifting. We estimate that large French multinationals shift 19% of their foreign profits annually to low-tax jurisdictions, resulting in €10.3 billion shifted out of France and €3.7 billion in lost tax revenues. We show that profit shifting reduces annual employees’ earnings by 2.6%. Low-income workers are disproportionately affected. The bottom 10% of workers lose 3.2% of wages, compared to 2.3% for top 10% earners. Changing the profit-sharing formula to account for global profitability, rather than subsidiary-level profitability, would increase wages by 4.1% for workers in profit-shifting subsidiaries. |
| Keywords: | Multinational Firms, Profit shifting, Tax revenue, Incidence |
| JEL: | F23 H25 H26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:dbp:wpaper:039 |
| By: | Sebastian Dyrda; Guangbin Hong; Muhammad Ali Sajid; Joseph B. Steinberg |
| Abstract: | We study international spillovers of corporate tax reforms in a fragmented global tax regime. Using firm-level evidence on the 2017 U.S. Tax Cuts and Jobs Act (TCJA) and a quantitative general-equilibrium model, we illustrate how multinational enterprises (MNEs) propagate local policy shocks throughout the global economy. Our framework emphasizes two key intrinsic properties of intangible capital: non-rivalry and mobile ownership. We find the TCJA generated positive outward spillovers: First, it boosted U.S. MNEs’ intangible investment, raising their foreign subsidiaries’ output. Second, it increased tangible investment of foreign MNEs’ U.S. subsidiaries, incentivizing them to expand intangible investment at home. Conversely, a Global Minimum Tax (GMT) implemented by the rest of the world generates negative inward spillovers for the United States, even if U.S.-parented MNEs are exempt. These findings illustrate that there is no such thing as a purely domestic corporate tax policy. |
| JEL: | F23 H25 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34627 |
| By: | Brun Lidia (European Commission - JRC); Speitmann Raffael (European Commission - JRC); Stasio Andrzej Leszek (European Commission - JRC); Stoehlker Daniel (European Commission - JRC) |
| Abstract: | This paper examines the Corporate Income Tax (CIT) compliance gap, the difference between revenue due under full compliance and actual collections, across 23 EU Member States, Norway, and Iceland. Existing bottom-up and top-down estimation methods each face notable limitations: Bottom-up approaches are data-intensive and hard to harmonise, while top-down methods depend on uncertain adjustments for undeclared activity and cannot adequately capture multinational profit shifting. An implementation of the IMF RA-GAP top-down method in Spain illustrates these challenges, revealing substantial data needs, conceptual mismatches between national accounts and tax data, and reliance on unverifiable assumptions. To address these issues, the Joint Research Centre proposes a simplified top-down methodology based on Eurostat s exhaustiveness adjustments. This approach is transparent, reproducible, and feasible with data already reported by Member States. Applying it across countries reveals large variation in CIT gaps ranging from below 3% in high-compliance jurisdictions to above 20 35% in others with an unweighted average gap of 10.9% (around EUR 38 billion in 2017). Sectoral patterns consistently show higher gaps in informal, cash-intensive industries and lower gaps in regulated sectors. The paper concludes that while no single method captures all dimensions of non-compliance, the proposed approach offers a practical tool for regular EU-wide monitoring. Its effectiveness depends on the timely and harmonised publication of exhaustiveness adjustment data to support consistent CIT gap estimation and policy analysis. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:taxref:202507 |