Audit Firms, Deferred Taxation and Financial Reporting : The Case of The Athens Stock Exchange

The purpose of this paper is the sectoral analysis and evaluation of the external audit reports in relation to the amounts of deferred taxes on the balance sheets of listed companies in the Athens Stock Exchange (ASE). External auditors participate significantly in the preparation of financial reporting, reducing agency problems and aiding acceptance of such information by the users as reliable. The “unqualified” audit reports correspond to more than two thirds of the total, while in the banking sector there is no “unqualified” (ie without even issue of „emphasis‟) Audit Report after 2011. More than two thirds of Deferred Tax Assets - including those from Loss Carryforwards - (DTA), Deferred Tax Liabilities (DTL), and Deferred Tax in the Income Statement appear on the Balance Sheets of the companies audited by the Big 5. Audit firms and supervisory authorities do not seem to have made satisfactory evaluation and exploitation of this information

Prediction ability of Altman model for bankruptcy in Greek enterprises

This study initially decodes and analyzes the financial robustness of companies that bankrupt in 2012, aiming to determine with the use of historical data the factors that could forecast the bankruptcy of these enterprises. The year 2012 was selected because Greece was the unique country from the GIIPS states (Greece, Ireland, Italy, Portugal and Spain) in which paradoxically 2012 is the year with inversion of the tendency and reduction (6.74%) in the number of recorded corporate bankruptcies. For the research purpose the second- revised Altman Z-score model is used, which was applied in a ten sample of bankrupted enterprises from various branches. The rate of success of the model in the final sample of enterprises one year before the bankruptcy is 100%, which means higher predictability than the percentage of 94% exported by Altman in 1968. As long as it concerns the rate of success 2 years before bankruptcy it was presented smaller compared to the -1 year (80%), however comparing the result with the application of Altman (72%), the model in the present research presented also higher prediction ability. The reversal of the trend of the legally recorded bankruptcies in Greece seems to be due to statistical rather than economic reasons. Many small and medium size firms as well as sole traders led to closure, but their bankruptcy was not recorded as judicial bankrup

Παράγοντες που επηρεάζουν τη φορολογική επιβάρυνση των Ελληνικών Εισηγμένων Επιχειρήσεων : Ευρήματα πριν και κατά την διάρκεια της κρίσης

This paper investigates for the first time in our country the factors that influence the formation of the real tax burden on the largest listed Greek Companies (FTSE / ASE 20-40-80 indices), as reflected in the Effective Tax Rate (ETR). The research is distinct for the years proceeding and those following the outbreak of financial crisis, covering the eight years from 2005 -2012. The results show that during the pre-crisis period, the ratios for leverage, profitability (ROE) and Market to Book Value (MtV), have negative correlation with the ETR, but firm’s loss history has positive correlation. During the financial crisis, additional to above variable correlations, the firm size and profitability (ROA) seems to be positively correlated to the ETR, while the short-term lending rate has negative correlation. Our findings concerning the relation of ETR to divided earnings per share might be useful for financial analysts, investors and regulators, while the evaluation of the gap between Book and Tax ETR might be of extremely significance for the tax authorities. Future research could include a larger sample with financial years before the application of International Accounting Standards (IAS), in order to assess the impact of the IAS in the formulation of ETR

A Greek Evaluation Of The Course Experience Questionnaire: Students’ Conceptions Of The Teaching Quality Of Higher Education Accounting Studies

Purpose: This study reveals the results of the validation of the Course Experience Questionnaire (CEQ) within the Greek accounting context. The specific instrument has been used extensively in other contexts to investigate the teaching-learning environment in Higher Education Institutions (HEIs). Design/methodology/approach: A convenience sample of 268 students from 3 Higher Technological Educational Institutions (ATEIs) participated in this study during the 2016-2017 academic year. The validity and reliability of the CEQ were investigated through exploratory factor analysis and the Cronbach alpha coefficient. The overall course satisfaction was used as an external criterion in order to strengthen the instrument’s validity. Additionally, students’ experience from their accounting studies was explored in relation to a number of demographic characteristics; gender, age, intention to attend postgraduate and professional studies, internship scheme and intention to follow the accounting profession. Findings: The exploratory factor analysis identified four constructs reflecting good teaching, generic skills, appropriate assessment and clear goals and standards. Age, internship scheme and intention to attend postgraduate studies were revealed as predictors of CEQ subscales. Research limitations/implications: The research population is limited and data was collected only from ATEIs students, so the generalization of findings needs attention. Originality/value: To the best of our knowledge the present study is the first attempt to adapt the CEQ in accounting studies in Greece

International Financial Reporting Standards (IFRS) for Small and Medium sized Enterprises (SMEs) in the EU: Evidence from a Field Research

In 2009 the International Accounting Standards Board (IASB) issued a new standard which is called 'IFRS for SMEs' regarding the use of International Financial reporting standards for small and medium sized entities. The IASB estimate that companies who fall under the scope of SME account for 95% of all companies. The aim of this research was to examine if and how small and medium sized entities in Greece, UK, Turkey, and Lithuania use or intend to adopt the International Financial Reporting standards. Primary data were collected through questionnaires that were given to an adequate number of SMEs. Findings from the viewpoint of preparers of the financial statements show that the introduction of these "tailor made" international standards for SMEs will bring certain costs which are not surely overcomed by foreseen benefits

Blockchain Technology as an Ecosystem: Trends and Perspectives in Accounting and Management

A plethora of studies have examined the emerging technology of blockchain and its applications in accounting, management, and enterprise resource planning systems (ERPs). Blockchain technology (BT) can change the architecture of today’s ERPs and overcome the limitations of these centralized systems. The aim of this study is twofold. First, this paper defines and analyzes the deployment of an innovative architecture of a Blockchain as an Ecosystem (BaaE) platform proposing a conceptual model of the Triple Entry Accounting (TEA) transforming the current accounting practices. Second, the paper explores the integration of cost management, supply chain, and inventory management on BT providing the significant challenges and benefits and suggesting an agenda for future research. The authors conduct an exploratory qualitative analysis of an extensive body of literature, from 81 journals. The paper’s innovative contribution and primary objective is to explore, address, and employ this emerging BaaE platform technology that could potentially be integrated with TEA. Further, the study examines the theoretical, technical, and business aspects regarding TEA, since there is limited research evidence in this field. Additionally, the study tries to identify the implications of BaaE in the area of cost management, supply chain, and inventory management from an ecosystem perspective. This effort can assist organizations and practitioners in understanding and further examining this emerging technology

Προσομοίωση για τον υπολογισμό των πιθανοτήτων επιβίωσης επιχειρήσεων και τραπεζών σε παρατεταμένη διάρκεια της δανειακής κρίσης

In the current paper, we study the stability and the survival probabilities of enterprises and banks within a prolonged duration of the debt-crisis, with Monte Carlo simulation. We utilize historical data from banks and enterprises within the debt-crisis to define crisis-variability and crisis-average values of input parameters of the simulation. We introduce the concept of equities maximum draw-down as dynamic survival indicator. Finally we estimate the survival probabilities of enterprises and banks within a prolonged duration of the debt crisi

Deferred Tax Positions under the prism of financial crisis and the effects of a corporate tax reform

The effects of corporate tax reforms in reported profits and firms’ financial position have been extensively studied in the literature. However, only few studies disaggregate deferred tax items to jointly explore political implications and aspects of corporate behavior around such reforms. Greece’s recent financial crisis and economic recession provides an intriguing setting for examining possible incentives and consequences of substantial tax rate changes, such as the 6% increase imposed by the Greek Government in year 2013. Results reveal a totally different picture between financial and non-financial firms, with the former being clearly favored, at least from this short-run effect. These findings seem to coincide with the view that tax policy design is usually shaped by taking into consideration powerful groups’interests. Regarding probable Determinants of Deferred Tax Assets for Tax Loss Carry forwards, the authors find that firms the audit firm may significantly affect recognized amounts due to firm specific internal guidelines and due to the overall quality of the audit

Deferred taxation and the impact on financial reporting

The present thesis examines the relevance of comprehensive interperiod income tax allocation and highlights the role and importance of Deferred Tax Positions in Consolidated Financial Statements, focusing not only on the size or changes but also identifying and categorizing their causes, by constructing through hand-collected data a prototype Data Base. The sample consists of the largest financial and non-financial firms listed in the Athens Stock Exchange and covers the period from 2005 to 2012, after the mandatory adoption of IFRS. The size, composition and trend of deferred tax positions vary significantly from year to year and between Financial and Non-Financial firms, but also between industries. Employee Benefits are diachronically the most important sources of Deferred Tax Assets (DTAs), while Deferred Tax Liabilities (DTLs) arise mainly from Book-Tax differences related to depreciation from (PPE).Greece’s recent fiscal instability provides an intriguing setting for examining the consequences of tax reforms on the business environment. The findings suggest that a tax rate increase by 6%, applicable at the end of 2012, would significantly favor firms with DTAs (minority), by strengthening their Assets and Net Income (the banking industry claims the lion's share), while in contrast it would negatively affect the Net Income, and would inflate the liabilities of firms with DTLs (majority).A reduction in rates brings about exactly the opposite results. The variation in the “short-run” revaluation effect, arising from the heterogeneous deferred tax positions across the sectors, could lead to reactions and incentives for or against a tax reform that focuses on the increase or decrease of corporate tax rates.Additionally, I extend prior research (based on US GAAP data), and examine if the recognition of deferred tax assets coming from the carry forward of unused tax losses (DTA_TLC), especially under the prism of financial crisis, complies with the IAS 12 requirements, and whether internal and external corporate governance attributes, like ownership structure, auditor’s firm size and audit’s quality, possibly affect the recognition of DTA_TLC. Using a logistic multivariate regression model, my findings suggest that DTA_TLC are not recognized in accordance with the guidelines provided by IAS 12. The quality of disclosures, firm size and the selection of non-Big4 auditors, increase the probability of recognition of DTA_TLC (experimental variable). In contrast, a greater auditor’s independence and an unqualified audit opinion seem to impair the creation of DTA from TLC. Based on the above, the quantitative and qualitative characteristics of the Deferred Taxes should be taken seriously into account and evaluated accordingly by all users of the Financial Statements. It would also be useful to further explore the possibility of tax and supervisory authorities to utilize the tax disclosures in order to track tax evasion or income shifting, to create models able to predict the firms’ ability to pay taxes and, finally, to simplify the process and reduce the cost of revenue collection.Η παρούσα διατριβή εξετάζει την καταλληλότητα μιας πλήρους διαπεριοδικής κατανομής των φόρων εισοδήματος και αναδεικνύει τον ρόλο και τη σημαντικότητα των Αναβαλλόμενων Φορολογικών Θέσεων στις Ενοποιημένες Χρηματοοικονομικές καταστάσεις, εστιάζοντας όχι μόνο στο μέγεθος και τις μεταβολές τους αλλά ταυτοποιώντας και κατηγοριοποιώντας τις αιτίες δημιουργίας τους, κατασκευάζοντας μια μοναδική βάση δεδομένων (prototype Data Base) με πρωτογενώς αντληθέντα (hand-collected) στοιχεία. Το δείγμα αποτελείται από τις μεγαλύτερες, Χρηματοοικονομικές και Μη Χρηματοοικονομικές, εισηγμένες στο Χρηματιστήριο Αθηνών εταιρείες, και καλύπτει την περίοδο 2005-2012, μετά την υποχρεωτική εφαρμογή των IFRS. Το ύψος, η σύνθεση και η τάση των Αναβαλλόμενων Φορολογικών Θέσεων διαφοροποιείται σημαντικά μεταξύ Χρηματοοικονομικών και Μη Χρηματοοικονομικών εταιρειών, αλλά και μεταξύ των κλάδων. Η πιο σημαντική πηγή διαχρονικά των Αναβαλλόμενων Φόρων Ενεργητικού (DTAs) είναι οι “Παροχές και τα Ωφελήματα Προσωπικού”, ενώ του Παθητικού (DTLs) οι “Αποσβέσεις” από Ενσώματα & Ασώματα Πάγια. Η πρόσφατη στην Ελλάδα δημοσιονομική αστάθεια προσφέρεται επίσης για την εξέταση των επιπτώσεων φορολογικών μεταρρυθμίσεων στο επιχειρηματικό περιβάλλον. Τα ευρήματα της έρευνας υποδηλώνουν ότι μια αύξηση των συντελεστών φορολογίας κατά 6%, με εφαρμογή στο 2012, ευνοεί σημαντικά εταιρείες που διαθέτουν DTAs (μειοψηφία), διότι ενισχύει το Ενεργητικό και την κερδοφορία τους (με τη μερίδα του λέοντος να πηγαίνει στις Τράπεζες), ενώ αντίθετα επιβαρύνει τα αποτελέσματα και αυξάνει τις υποχρεώσεις εταιρειών με DTLs (πλειοψηφία). Μια μείωση των συντελεστών επιφέρει ακριβώς τα αντίθετα αποτελέσματα. Η απόκλιση της “εφάπαξ” αυτής επίδρασης- επανεκτίμησης οφείλεται στις ετερογενείς θέσεις DTAs/DTLS από κλάδο σε κλάδο, και θα μπορούσε να οδηγήσει σε αντιδράσεις και κίνητρα για πρωτοβουλίες υπέρ ή κατά μιας φορολογικής μεταρρύθμισης, η οποία επικεντρώνεται στην αύξηση ή μείωση των εταιρικών φορολογικών συντελεστών.Επιπλέον, επεκτείνω την υφιστάμενη έρευνα (βασιζόμενη σε US GAAP δεδομένα), διερευνώντας εάν η αναγνώριση Αναβαλλόμενων Φορολογικών Στοιχείων Ενεργητικού, από αχρησιμοποίητες Φορολογικές Ζημίες εις Νέον (DTA_TLC), ειδικότερα σε περιόδους οικονομικής κρίσης, καλύπτει τα προαπαιτούμενα του IAS 12, και εάν εσωτερικά και εξωτερικά χαρακτηριστικά εταιρικής διακυβέρνησης, όπως η μετοχική δομή, το μέγεθος ελεγκτικής εταιρείας και η ποιότητα των ελέγχων, επηρεάζουν ενδεχομένως την αναγνώριση (DTA_TLC). Χρησιμοποιώντας ένα μοντέλο πολυπαραγοντικής Λογιστικής Παλινδρόμησης, τα ευρήματα υποδεικνύουν ότι οι DTA_TLC δεν αναγνωρίζονται σύμφωνα με τις οδηγίες που παρέχονται από το IAS 12. Η ποιότητα των γνωστοποιήσεων, το μέγεθος της εταιρείας, και η επιλογή ενός ελεγκτικού οίκου εκτός των Big4, αυξάνουν την πιθανότητα αναγνώρισης DTA_TLC (εξεταζόμενη μεταβλητή). Αντίθετα ένας πιο ανεξάρτητος εξωτερικός έλεγχος καθώς και η έκφραση γνώμης χωρίς επιφύλαξη φαίνεται να μειώνουν την εν λόγω πιθανότητα. Με βάση τα ανωτέρω, τα ποσοτικά και ποιοτικά χαρακτηριστικά των Αναβαλλόμενων Φόρων θα πρέπει να λαμβάνονται σοβαρά υπόψη και να αξιολογούνται αναλόγως από όλους τους χρήστες των Χρηματοοικονομικών Καταστάσεων. Θα ήταν επίσης χρήσιμο να διερευνηθεί περαιτέρω η δυνατότητα αξιοποίησης από τις Φορολογικές και Εποπτικές Αρχές των φορολογικών αποκαλύψεων για τον εντοπισμό φοροδιαφυγής ή μεταφοράς φορολογητέας ύλης, για τη δημιουργία μοντέλων πρόβλεψης της φοροδοτικής ικανότητας των επιχειρήσεων και τέλος για την απλούστευση της διαδικασίας και μείωση του κόστους συλλογής των φόρων