What is the cost of the APB 23 assertion? indefinitely reinvested foreign earnings, investment profitability, and financial reporting incentives

2018 ◽  
Author(s):  
Jane (Zhiyan) Song
Keyword(s):  
Financial Reporting ◽  
Foreign Earnings ◽  
Reporting Incentives ◽  
The Cost

scholarly journals Is U.S. Multinational Dividend Repatriation Policy Influenced by Reporting Incentives?

2012 ◽  
Vol 87 (5) ◽  
pp. 1463-1491 ◽  
Author(s):  
Jennifer L. Blouin ◽  
Linda K. Krull ◽  
Leslie A. Robinson
Keyword(s):  
Multinational Corporations ◽  
Financial Reporting ◽  
Data Availability ◽  
Operating Characteristics ◽  
Foreign Earnings ◽  
Reporting Incentives ◽  
Cash Payment ◽  
Public Company ◽  
Foreign Affiliates ◽  
Repatriation Taxes

ABSTRACT This study finds evidence that public-company reporting by U.S. multinational corporations (MNCs) creates disincentives to repatriate foreign earnings to the U.S. and contributes to the accumulation of cash abroad. MNCs operate under U.S. international tax laws and financial reporting rules and face two potential consequences when they repatriate foreign earnings: a cash payment for repatriation taxes and a reduction in reported accounting earnings. Using a confidential dataset of financial and operating characteristics of foreign affiliates of MNCs combined with public-company data, we examine how repatriation amounts vary across firms that face relatively strong reporting incentives to defer an accounting expense. Our results suggest that reporting incentives reduce repatriations by about 17 to 21 percent annually. Data Availability: Bureau of Economic Analysis (BEA) data were made available to the authors under a legal confidentiality arrangement; all non-BEA data are available from public sources.

Financial Reporting versus Tax Incentives and Repatriation under the 2004 Tax Holiday

2013 ◽  
Vol 36 (1) ◽  
pp. 63-87 ◽  
Author(s):  
Michaele Morrow ◽  
Robert C. Ricketts
Keyword(s):  
Multinational Corporations ◽  
Financial Reporting ◽  
Financial Statements ◽  
Tax Incentives ◽  
Tax Rates ◽  
Foreign Earnings ◽  
Reporting Incentives ◽  
Tax Savings ◽  
Tax Costs ◽  
Tax Holiday

ABSTRACT We analyze the repatriation behavior of U.S. multinational corporations under the tax holiday implemented as part of the American Jobs Creation Act of 2004. Our results suggest that tax incentives, as reflected in differences between firms' effective foreign tax rates, do not appear to be significant predictors of either participation in the tax holiday or the amounts repatriated by firms that chose to participate. In contrast, differences in financial reporting incentives were significant predictors of both participation in the holiday and the amounts repatriated. Not surprisingly, we find that firms appear to have chosen between repatriation of permanently versus temporarily deferred foreign earnings based on how the source of repatriation impacted their GAAP financial statements. Moreover, our results suggest that many firms chose to participate in the holiday only to the extent necessary to achieve financial reporting goals. Overall, our results suggest that financial reporting incentives appear to have been much more important to firms than tax savings in choosing whether and to what extent to participate in the holiday. Indeed, many firms appear to have viewed the act principally as an opportunity to manage reported GAAP income, rather than as an opportunity to reduce their U.S. tax costs.

Does IFRS adoption decrease the cost of equity of the global tourism firms?

2017 ◽  
Vol 23 (8) ◽  
pp. 1615-1631
Author(s):  
Zhi-Yuan Feng ◽  
Ying-Chieh Wang ◽  
Hua-Wei Huang
Keyword(s):  
Financial Reporting ◽  
Equity Capital ◽  
Tourism Industry ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Legal Enforcement ◽  
Global Tourism ◽  
The Cost

This article answers the question of whether the adoption of International Financial Reporting Standards (IFRS) reduces the cost of equity capital, with a focus on the tourism industry. We employ a set of global tourism companies and find that mandatory IFRS adoption has a significantly negative relation with the cost of equity capital. However, we find that this relation is varied with different business cultures and geographic areas. Moreover, from interactive analyses of country institutions for the relation between mandatory IFRS adoption and tourism firm’s cost of equity, we show that adopting IFRS complements the deficiencies of various country institutions, such as investor protection, the strength of legal enforcement, and corporate governance.

scholarly journals Analisis Biaya Cadangan Risiko Pinjaman dan Cadangan Risiko Pinjaman Dalam Laporan Auditor Independen Unit Pengelola Keuangan (Studi Kasus: Badan Keswadayaan Masyarakat di Kabupaten Bantul Provinsi DIY)

2016 ◽  
Vol 4 (2) ◽  
Author(s):  
Kurniawan Kurniawan ◽  
Dody Hapsoro
Keyword(s):  
Financial Reporting ◽  
Public Accounting ◽  
Loan Risk ◽  
Audit Result ◽  
Results Reporting ◽  
Almost All ◽  
The Cost ◽  
Keywords Cost

This study examines whether there are differences in the cost of the loan risk reserves and the loan risk reserves between audit results data and financial reporting. The research sample consisted of the audit results report on 50 BKM (Badan Keswadayaan Masyarakat) in Kabupaten Bantul Provinsi Daerah IstimewaYogyakarta whichhave been audited by Budiman, Wawan, Pamudji and Partners Public Accounting Firmin 2014. This study found that the cost of the loan risk allowances and loan risk allowances between audit result and reporting differed significantly. The study concluded that almost all of BKM not charge cost and reserve risk of the loan according collectibility list that is used as the source of the audit resultscalculation. Keywords: Cost of the loan risk reserves, loan risk reserves, audit results, reporting.

scholarly journals Xbrl technologies for financial reporting in information systems

2018 ◽  
Vol 13 ◽  
pp. 3281-3287
Author(s):  
Ahmed Zamzam ◽  
Alaa A. Qaffas
Keyword(s):  
Financial Reporting ◽  
Data Exchange ◽  
Software Industry ◽  
Exchange Process ◽  
Free Text ◽  
Financial Systems ◽  
Pilot Projects ◽  
Reporting Requirements ◽  
The World ◽  
The Cost

Without a common format, the financial community has been constantly penalized by the data exchange process. Currently, when financial data are dematerialized, they are exchanged in a multitude of formats: Excel files, free text, PDF, etc. Often not much more suitable for processing than photocopying and limited to certain platforms, these formats prove unsuitable for the exchange of information between programs, for analysis, comparison and presentation of reports to users. So far, despite a strong tendency to use XML syntax, attempts at convergence have struggled to generalize and apply to many sectors and contexts.In recent years, reporting requirements have led to a significant increase in the cost of using financial systems. The use of XBRL technology, using XML syntax, supported by many players in the world of finance, the software industry and adapted to reporting, can constitute the solution. Many governments, regulators, financial institutions are already using XBRL or have pilot projects in place.This document specifically targets XBRL. This technology, which is now recognized by the entire software industry, provides tremendous benefits for data exchange, storage, research and processing.

scholarly journals Do Political Connections Affect the Conservative Financial Reporting of Family Firms?

2019 ◽  
Vol 11 (20) ◽  
pp. 5563
Author(s):  
Hsin-Yi Chi ◽  
Tzu-Ching Weng ◽  
Guang-Zheng Chen ◽  
Shu-Ping Chen
Keyword(s):  
Financial Reporting ◽  
Family Firms ◽  
Political Connections ◽  
Policy Makers ◽  
Listed Firms ◽  
Reporting Incentives ◽  
Final Sample ◽  
The Family ◽  
Governance Practice ◽  
Using Data

This paper investigates the effect of political connections on the association between family firms and conservative financial reporting. While family firms have incentives to reduce agency and litigation-related costs by means of conservative reporting, firms with political connections tend to have opaque financial reporting, which enable them to engage in rent-seeking activities. Using data for Taiwanese listed firms between 1996 and 2012, the final sample observations were 13,877 firm-year observations from a population of 21,393 firm-year observations. We found that political connections weaken the positive relationship between family ownership and conservative financial reporting. This suggests that politically connected family firms make fewer demands for conservative financial reporting. This study contributes to the literature on how political connections affect the family owners’ reporting incentives. Policy makers may consider political connections as an essential factor with respect to establishing governance practice in family firms.

Application of Fuzzy Logic to Fraud Detection

2005 ◽  
pp. 135-139
Author(s):  
Mary Jane Lenard ◽  
Pervaiz Alam
Keyword(s):  
Financial Reporting ◽  
Average Cost ◽  
Medical Insurance ◽  
Financial Statements ◽  
Third Party ◽  
Insurance Fraud ◽  
Fraudulent Financial Reporting ◽  
The Cost ◽  
The U.S ◽  
Financial Reporting Fraud

In light of recent reporting of the failures of some of the major publicly-held companies in the U.S. (e.g., Enron & WorldCom), it has become increasingly important that management, auditors, analysts, and regulators be able to assess and identify fraudulent financial reporting. The Enron and WorldCom failures illustrate that financial reporting fraud could have disastrous consequences both for stockholders and employees. These recent failures have not only adversely affected the U.S. accounting profession but have also raised serious questions about the credibility of financial statements. KPMG (2003) reports seven broad categories of fraud experienced by U.S. businesses and governments: employee fraud (60%), consumer fraud (32%), third-party fraud (25%), computer crime (18%), misconduct (15%), medical/insurance fraud (12%), and financial reporting fraud (7%). Even though it occurred with least frequency, the average cost of financial reporting fraud was the highest, at $257 million, followed by the cost of medical/insurance fraud (average cost of $33.7 million).

Why is Financial Reporting so Inefficient?

1990 ◽  
Vol 5 (1) ◽  
pp. 33-53 ◽  
Author(s):  
Nils H. Hakansson
Keyword(s):  
Financial Reporting ◽  
Productive Efficiency ◽  
Financial Disclosure ◽  
Public Disclosure ◽  
Management Information ◽  
Significant Events ◽  
Talented People ◽  
Short Run ◽  
Lao Tse ◽  
The Cost

Those who know do not tell; those who tell do not know. Lao Tse In earlier papers (Hakansson, 1977, 1981), the equilibrium properties of two financial disclosure scenarios, “laissez-faire” and “timely public disclosure” were compared. The analysis showed that, measured in welfare space, the incentives of only two groups, less well-to-do subscribing investors and nonsubscribing investors (who tend to be “small” in terms of their resources) prefer the second scenario even though it results in greater aggregate output across states. The incentives of management, information searchers, and more well-to-do investors favor a “wide window” between significant events affecting the firm and their public disclosure, at least in the short run. The “cost” of this scenario is that it draws a sizable group of talented people from the productive sector into “scooping” information before its eventual disclosure. It is noteworthy that a regulatory solution is likely to further reduce, not improve, the productive efficiency of the economy. This paper examines the financial disclosure question further and argues that its resolution is directly linked to the principal-agent “contract” between the shareholders and management. These contracts do exhibit some peculiar properties, especially in the area of management compensation and with respect to MBOs, in which management apparently manages to be both the buyer and the “agent” for the seller.

XBRL adoption and cost of debt

2015 ◽  
Vol 23 (2) ◽  
pp. 199-216 ◽  
Author(s):  
Syou-Ching Lai ◽  
Yuh-Shin Lin ◽  
Yi-Hung Lin ◽  
Hua-Wei Huang
Keyword(s):  
Financial Reporting ◽  
Securities And Exchange Commission ◽  
Cost Of Debt ◽  
Content Type ◽  
Public Firms ◽  
Top Managers ◽  
Weak Evidence ◽  
The Usa ◽  
Mandatory Adoption ◽  
The Cost

Purpose – This paper aims to examine the relation between the cost of debt and the adoption of eXtensible Business Reporting Language (XBRL). Design/methodology/approach – The financial data are obtained from the Compustat database. Regression analysis is used to examine the research hypotheses. Findings – The authors find that both voluntary and mandatory adoption of XBRL lead to a lower cost of debt for firms, with weak evidence that this reduction is greater for the former than the latter. Research limitations/implications – The findings support the policy of the USA Securities and Exchange Commission (SEC), and thus this paper recommends that adoption of XBRL should be mandatory for all public firms. Practical implications – The findings encourage top managers to develop their firms’ XBRL systems. Originality/value – The results support the SEC’s policy of mandatory XBRL adoption, as it can lead to greater financial reporting transparency and mitigate information asymmetry between management and bondholders.

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