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on Accounting and Auditing |
| By: | Mdhlalose, Dickson |
| Abstract: | South African small and medium-sized enterprises (SMEs) account for around 34% of national GDP and generate around 60% of employment; however, they continue to be disproportionately impacted by financial management inadequacies. This paper investigates whether the expansion of accessible digital accounting technologies such as cloud-based accounting software, mobile financial applications, and artificial intelligence-assisted analytics is significantly altering the adoption and utility of management accounting information among South African SME owners and managers, or if it simply automates non-value-added compliance tasks. This study synthesises evidence from an integrative review of 60 peer-reviewed sources published between 2020 and 2026, focusing on four thematic domains: digital transformation in the accounting profession; cloud software adoption by SMEs; the evolving advisory role of external accountants; and the triangular relationship among technology use, financial literacy, and decision-making quality. The study contends that digital technologies establish a legitimate yet contingent avenue for improved management accounting participation; their transformative potential is realised solely when supported by sufficient financial literacy, the development of digital skills, and contextually suitable software design. Essential recommendations are aimed at small and medium-sized enterprise owners, accounting practitioners, software developers, and policymakers in South Africa. |
| Keywords: | Cloud-based accounting software, Financial literacy, Decision-making quality, Compliance versus advisory, South African SMEs |
| JEL: | M41 M15 O33 L26 O55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341046 |
| By: | Bertomeu, Jeremy; Cheynel, Edwige; Lunawat, Radhika; Milone, Mario |
| Abstract: | This study examines the resolution of ethical dilemmas in financial reporting by human participants and large language models. Participants act in the role of a CFO deciding whether to discontinue a prior policy with biased reporting; however, the bias is known and corrected by investors whereas a change may temporarily mislead investors. We find that models are less amenable to competing ethical considerations than humans, and exhibit greater preference for truthful reporting. Moreover, they respond with greater consistency to institutional ethical guidance, while humans become more indecisive under pressure from management. The models exhibit more internal coherence between their moral judgment and their policy prescriptions and are judged more persuasive by humans. Finally, humans follow model advice when accompanied by an explanation, but they seem to discount (and sometimes react against) advice offered without it. Our findings offer evidence on the misalignment between artificial intelligence and humans in tackling subjective reporting dilemmas while guiding the incorporation of such tools into corporate governance. |
| Keywords: | Artificial Intelligence, Ethics, Decision Making, Truth, Lies, Deception, Large Language Models, Financial Reporting, Experimental Accounting |
| JEL: | C91 D83 M41 M48 O33 |
| Date: | 2026–04–18 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128775 |
| By: | Massab, Khizra; Siddiqui, Danish Ahmed |
| Abstract: | The purpose of the study is to better understand the relationship between accounting systems and innovation in the banking industry by investigating how MAIS affects the impact of different innovation methods on financial results. The research explores looks at how the Management Accounting Information System (MAIS) affects the link between financial performance (FP) and innovation strategy (IS) in Pakistani banks. Six innovation strategies were included namely 1. Aggressiveness, 2. Analysis, 3. Defensiveness, 4. Futurity, 5. Pro-activeness, and 6. Riskiness and their effect on banks' financial performance are accessed. Performance dimensions included 1. Financial Performance, 2. Customer Performance, 3. Internal Business Processes Performance, and 4. Learning and Growth Performance. We also contend that a better Management Accounting Information System (MAIS) would make the impact of innovation strategies on performance more pronounced. The quality of MAIS is measured by 1. Integration management, 2. Sales Management System, 3. Management Reporting System, 4. Budget Management System, and 5. Timeliness. Purposive sampling was used to choose key personnel from the top ten banks in Pakistan, with an emphasis on those in charge of strategic and financial decision-making. A structured questionnaire was used to gather data, and Smart PLS software was used to evaluate the survey using descriptive statistics and structural equation modeling (SEM). Cross-loadings, reliability, and discriminant validity tests were used to thoroughly verify the IS, MAIS, and FP constructs. The results suggested that the association between innovation strategies and financial performance is considerably moderated by MAIS. In particular, MAIS has a negative moderating effect in riskiness and futurity situations, but it increases the influence of aggressive and proactive innovation tactics on financial results. These findings imply that while MAIS may be helpful in some situations, excessive dependence on analytical or forward-looking approaches may impede flexible decision-making in quickly changing financial environments. Hence, the findings suggested that to promote sustainable development and a competitive edge in the market, banks must strike a balance between strategic innovation and strong accounting processes, as shown by the complex function of MAIS. |
| Keywords: | Management Accounting Information System (MAIS), Innovation Strategy (IS), Financial Performance (FP), Banking Sector, Pakistani Banks, Strategic Moderation |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341014 |
| By: | Zhen Zhang; Moxuan Zheng; Tongchen Zhang; Luyun Lin; Yiqing Wang; Lixing Lin |
| Abstract: | Bankruptcy is a low-frequency but high-impact corporate event, making early risk identification important for creditors, investors, regulators, and risk managers. Traditional bankruptcy-prediction models rely primarily on accounting ratios, but these measures may reflect financial deterioration only after it appears in reported financial statements. Narrative disclosures in annual 10-K filings may therefore provide incremental warning signals about emerging distress. This study examines whether 10-K narratives improve bankruptcy prediction beyond conventional accounting variables. Using firm-year observations matched to 10-K text, SEC financial statement data, and bankruptcy events from the Florida-UCLA-LoPucki Bankruptcy Research Database, the analysis evaluates bankruptcy risk over the year following the 10-K filing date. The paper develops a transparent Pre-Bankruptcy Stress (PB Stress) Score, a dictionary-based measure designed to capture distress-specific language related to liquidity and funding stress, debt covenant and refinancing stress, operating deterioration, restructuring and legal distress, and business fragility. The score is evaluated against a five-variable accounting baseline and a Loughran-McDonald dictionary benchmark. In the primary one-year holdout test, adding the PB Stress Score increases AUC from 0.8323 to 0.9019 and raises top-decile bankruptcy capture from 44.12% to 64.71%. The positive incremental pattern remains visible across bootstrap inference, alternative accounting benchmarks, alternative outcome definitions, and out-of-time validation. The findings indicate that distress-specific 10-K narratives provide interpretable incremental information for bankruptcy-risk monitoring beyond conventional accounting ratios. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.05623 |
| By: | NAKATANI, Ryota; MIYAMOTO, Hiroaki |
| Abstract: | This paper studies the optimal tax-and-transfer policy when automation raises productivity but displaces unskilled workers. Using a general equilibrium model calibrated to the U.S. economy, we compute the steady-state social welfare-maximizing rate of each of four tax instruments: capital income taxation, unskilled wage taxation, taxation on automation capital (i.e., a robot tax), and consumption taxation. Following an increase in the productivity of automation-related capital, the welfare-maximizing capital income tax rate and robot tax rate are zero, as their long-run investment distortions outweigh their redistributive social benefits. In the baseline simulation, aggregate welfare is maximized by cutting the unskilled wage tax rate and, especially, the consumption tax rate. However, when unskilled labor and automation-related capital are highly substitutable, the optimal consumption tax rate increases, and the additional government revenue is redistributed to displaced unskilled workers. |
| Keywords: | Automation, Optimal Taxation, Capital Income Tax, Labor Income Tax, Consumption Tax, Robot Tax |
| JEL: | H21 H24 H25 C68 E25 O31 O40 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:hit:cisdps:710 |
| By: | Christl Michael; Navarro Berdeal Silvia (European Commission - JRC) |
| Abstract: | This paper assesses the fiscal and distributional effects of personal income tax expenditures in Portugal using EUROMOD microsimulation and 2022 EU-SILC microdata. We compare the 2023 tax-benefit system with a counterfactual scenario in which each tax expenditure category is removed individually to estimate first-round fiscal, distributional and cost-efficiency impacts. We find that tax expenditures account for almost 40% of personal income tax revenues and predominantly benefit middle-income households, with substantial variation in redistributive effectiveness across instruments. Work-related and pension-related tax expenditures are regressive, increasing inequality relative to the baseline, while family, health, housing and education-related provisions are broadly neutral. The Net income guarantee (‘Mínimo de Existência’) tax allowance, stands out as the only progressive instrument and is the most cost-efficient tax expenditure on both inequality and poverty dimensions. These findings suggest that reallocating fiscal resources from broad-based, regressive provisions towards targeted instruments such as the ‘Mínimo de Existência’ could yield greater redistributive returns. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:taxref:202605 |
| By: | Mahyar Kargar; Benjamin Lester; Semih Üslü; Pierre-Olivier Weill |
| Abstract: | We develop a model of a dealer-intermediated over-the-counter market designed to study three major changes in the structure of the U.S. corporate bond market: the increase in dealers’ balance sheet costs, the emergence of electronic trading platforms, and the growing presence of bond mutual funds and ETFs. Our model provides a unified analysis of these changes, clarifies the economic channels at play, and allows us to quantify their effects on a variety of market outcomes. Our quantitative analysis suggests that, while electronic trading significantly reduced the cost of raising capital in the corporate bond market, these gains were almost completely offset by the combined effects of balance sheet costs and changes in the demand for liquidity. We find that electronic trading also caused a meaningful decline in the bid-ask spread, whereas other changes in the market structure had little effect on transaction costs. |
| Keywords: | Over-the-counter markets; corporate bond market liquidity; dealer intermediation; balance sheet costs; electronic trading platforms |
| JEL: | G11 G12 G14 G24 D83 |
| Date: | 2026–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:103286 |