NEP: New Economics Papers Accounting and Auditing

NEP: New Economics Papers

Accounting and Auditing

Edited by:	Alexander Harin
	Modern University for the Humanities
Issue date:	2010-05-08
Papers:	5

Note: Access to full contents may be restricted.
NEP is sponsored by SUNY Oswego.

In this issue we have:

1. KEEPING ACCOUNTS BY THE BOOK: THE REVELATION(S) OF ACCOUNTING
   Vassili Joannides; Nicolas Berland
2. Optimal Taxes on Wealth and Consumption in the Presence of Tax Evasion
   Johann K. Brunner; Paul Eckerstorfer; Susanne Pech
3. Firm Valuations, the Cost of Capital and the Tax Treatment of Capital Gains
   Chris Jones
4. Property Value Assessment Growth Limits, Tax Base Erosion and Regional In-Migration
   Skidmore, Mark; Tosun, Mehmet S.
5. Ownership concentration and audit fees: do auditors matter most when investors are protected least?
   Ben Ali Chiraz; Cédric Lesage

Contents.

1. KEEPING ACCOUNTS BY THE BOOK: THE REVELATION(S) OF ACCOUNTING

   Date:	2010
   By:	Vassili Joannides (GGSB - Grenoble Graduate School of Business - Grenoble Ecole de Management) Nicolas Berland (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris Dauphine - Paris IX)
   URL:	http://d.repec.org/n?u=RePEc:hal:gemptp:hal-00477759_v1&r=acc
   Our paper addresses what the moral foundations of accounting are, regardless of capitalistic operations, as we are seeking to trace a genealogy of accounting thinking disconnected from coincidence with Capitalism. We demonstrate that the three monotheisms have bared the core of accounting. We purport to explicate how the three monotheisms (Judaism, Christianity divided into Roman Catholicism and Protestantisms, and Islam) have successively revealed the nature of accounting to moralise people's day-to-day conduct. Our approach to the revelation of accounting is informed with practice theory to study how accounting was used in believers' day-today activities and faith management. To this end, we read theological debates on accounting from Rabbinic, Islamic, Catholic and Protestant literatures raised at the time of the Reformation. Our study reveals that, in the four religions, bookkeeping serves as routine and rules to account for daily conduct, its content being contingent upon common understandings (viz. God's identity, capabilities and expectations) and teleoaffective structures (viz. definition of and ways to salvation). Through this paper, we demonstrate that accounting issues have always served as a sub-practice in moral practices and is therefore not necessarily coincidental with economic operations. Ultimately, we contribute to literature on the genesis of accounting, accounting as situated practice and accounting as moral practice.day-today activities and faith management. To this end, we read theological debates on accounting from Rabbinic, Islamic, Catholic and Protestant literatures raised at the time of the Reformation. Our study reveals that, in the four religions, bookkeeping serves as routine and rules to account for daily conduct, its content being contingent upon common understandings (viz. God's identity, capabilities and expectations) and teleoaffective structures (viz. definition of and ways to salvation). Through this paper, we demonstrate that accounting issues have always served as a sub-practice in moral practices and is therefore not necessarily coincidental with economic operations. Ultimately, we contribute to literature on the genesis of accounting, accounting as situated practice and accounting as moral practice.
   Keywords:	religion, accounting, Catholicism, Protestantism, Judaism, Islam, Control as practice

2. Optimal Taxes on Wealth and Consumption in the Presence of Tax Evasion

   Date:	2010-03
   By:	Johann K. Brunner Paul Eckerstorfer Susanne Pech
   URL:	http://d.repec.org/n?u=RePEc:jku:econwp:2010_04&r=acc
   This article incorporates tax evasion into an optimum taxation framework with individuals differing in earning abilities and initial wealth. We find that despite the possibility of its evasion a tax on initial wealth should supplement the optimal nonlinear income tax, given a positive correlation between initial wealth and earning abilities. Further, even if income and initial wealth are taxed optimally, it is still desirable to levy a tax on commodities, though it can be evaded as well. Thus, our result provides a rationale for a comprehensive tax system. Optimal tax rates on commodities differ in general, however for the special case of a uniform evasion technology it turns out that equal rates are optimal if preferences are homothetic and weakly separable.
   Keywords:	Optimal Taxation, Tax Evasion
   JEL:	D82

3. Firm Valuations, the Cost of Capital and the Tax Treatment of Capital Gains

   Date:	2010-04
   By:	Chris Jones
   URL:	http://d.repec.org/n?u=RePEc:acb:cbeeco:2010-518&r=acc
   By recognising the cash flow characteristics of personal taxes on dividends Auerbach, Bradford and King find they reduce the current value of a firm's equity without affecting the marginal cost of capital funded from retained earnings. This paper draws on work by Boadway and Bruce to show why personal taxes levied on realized capital gains have the same effects, where the common practice of approximating them with accrual based taxes set at lower rates is misleading. We use these findings to recommend reforms to dividend imputation schemes that would convert progessive personal taxes on (taxed) equity income into accrual based taxes.
   JEL:	H20

4. Property Value Assessment Growth Limits, Tax Base Erosion and Regional In-Migration

   Date:	2010-04
   By:	Skidmore, Mark (Michigan State University) Tosun, Mehmet S. (University of Nevada, Reno)
   URL:	http://d.repec.org/n?u=RePEc:iza:izadps:dp4906&r=acc
   In 1994 a limit on the growth of property values for tax purposes was imposed in Michigan. One consequence of the newly imposed assessment growth cap was an emerging differential in tax prices between potential new property owners and long-time property owners. The purpose of this paper is to examine the impact of this growing tax price differential on migration patterns. Using county level data on migration activity over the 1994-2006 period, we present evidence that differential tax prices resulting from the assessment growth cap have reduced in-migration.
   Keywords:	property tax, tax base erosion, regional migration, Michigan
   JEL:	H71

5. Ownership concentration and audit fees: do auditors matter most when investors are protected least?

   Date:	2010
   By:	Ben Ali Chiraz (ESC Amiens - ESC Amiens) Cédric Lesage (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - GROUPE HEC - CNRS : UMR2959)
   URL:	http://d.repec.org/n?u=RePEc:hal:journl:hal-00476923_v1&r=acc
   Minority expropriation could result when controlling shareholders can expropriate minority shareholders and profit from private benefits of control. This agency conflict (named Type II) has been rarely studied, as the most commonly assumed agency conflict resides between managers and shareholders (Type I). We want to study the role of the auditors in reducing the type II agency conflict. Using an audit fees model derived from Simunic (1980), we study the impact of type I and type II agency conflicts on audit fees in code law vs common law countries. We then focus two civil law countries (Germany and France) providing a lower investor protection level, and two common law countries (the USA and UK) providing a higher investor protection level (La Porta et al. 1998, 2000). Our results show 1) a negative relation between audit fees and managerial shareholding, which is stronger for common law than for civil law countries; 2) a curvilinear (concave) relation between audit fees and controlling shareholding for civil law countries; 3) no Type II conflict in the common law countries. These results illustrate the mixed effects of the legal environment and of each agency conflict on audit fees.

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This nep–acc issue is ©2010 by Alexander Harin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, it must include this copyright notice. It may not be sold, or placed in something else for sale.

General information on the NEP project can be found at http://nep.repec.org/. For comments please write to the director of NEP, Marco Novarese at < director @ nep point repec point org >.

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