Asymmetric Response:Explaining Corporate Social Disclosure by Multi-National Firms in Environmentally Sensitive Industries

The paper examines the determinants of corporate social disclosure (CSD) using a sample drawn from environmentally sensitive industries. It extends the traditional literature in two respects. First, it is international in scope, examining the accounting disclosure responses of multi-national companies to the pressures implied by the nature and scope of their operations. Second, variables measuring political risk and social development are developed so that these pressures can be measured, thereby introducing new dimensions to the literature. In common with previous studies, financial risk, size and other control variables are included. The relationships are tested econometrically utilising regression techniques not previously applied in the CSD literature but nonetheless more generally appropriate when using count dependent variables. Our results suggest that managers feel an unequal sense of responsibility to different constituencies and their disclosure priorities are determined by stock market accountability, lobbying power of their domestic audience and the political risk of their activities rather than the impact of their activities in countries of operation

Escalating Commitment: Business Investments and CSR

There are many instances, in all areas of business, in which individuals can become committed to a course of action that begins costing more than it is producing. Because it is often possible for persons who have suffered a setback to recoup their losses through an even greater commitment of resources to the same course of action, a cycle of escalating commitment can be produced (Staw, 1981). This thesis serves to address prior literature and prior studies based on the theory of escalation behavior . We furthered our research by conducting an experiment using university students to test certain said theory with the incorporation of specific variables (i.e. tax-avoidance strategies vs. sustainable investing). As such, this thesis was designed with the purpose of trying to understand why such behavior exists and what factors may have significant influence on the cycle known as escalating commitment

Political, social and economic determinants of corporate social disclosure by multi-national firms in environmentally sensitive industries

Using examples from environmentally sensitive industries, the paper examines the determinants of corporate social disclosure (CSD). The paper moves beyond the traditional literature in two respects. First it is international in scope, examining the accounting disclosure responses of multi-national companies to the pressures implied by the nature and scope of their operations. Second, variables measuring political risk and social development are developed so that these pressures can be measured, thereby introducing new dimensions to the literature. In common with previous studies, financial risk, size and other control variables are included. The relationships are tested econometrically utilising regression techniques not previously applied in the CSD literature but nonetheless more generally appropriate when using count dependent variables. Results suggest that managers feel an unequal sense of responsibility to different constituencies and their disclosure priorities are determined by stock market accountability, lobbying power of their domestic audience and the political risk of their activities rather than the impact of their activities in countries of operation

Political, social and economic determinants of corporate social disclosure by multi-national firms in environmentally sensitive industries.

Using examples from environmentally sensitive industries, the paper examines the determinants of corporate social disclosure (CSD). The paper moves beyond the traditional literature in two respects. First it is international in scope, examining the accounting disclosure responses of multi-national companies to the pressures implied by the nature and scope of their operations. Second, variables measuring political risk and social development are developed so that these pressures can be measured, thereby introducing new dimensions to the literature. In common with previous studies, financial risk, size and other control variables are included. The relationships are tested econometrically utilising regression techniques not previously applied in the CSD literature but nonetheless more generally appropriate when using count dependent variables. Results suggest that managers feel an unequal sense of responsibility to different constituencies and their disclosure priorities are determined by stock market accountability, lobbying power of their domestic audience and the political risk of their activities rather than the impact of their activities in countries of operation.

Taxpayers' Behavioural Responses and Measures of Tax Compliance 'Gaps': A Critique

The work of Feldstein (1995, 1999) has stimulated substantial conceptual and empirical advances in economists’ approaches to analysing taxpayers’ behavioural responses to changes in tax rates. Meanwhile, a largely independent literature proposing and applying alternative measures of tax compliance has also developed in recent years, which has sought to provide tax agencies with tools to identify the extent of tax non-compliance as a first step to designing policies to improve compliance. In this context, measures of ‘tax gaps’ – the difference between actual tax collected and the potential tax collection under full compliance with the tax code – have become the primary measures of tax non-compliance via (legal) avoidance and/or (illegal) evasion. In this paper we argue that the tax gap as conventionally defined is conceptually flawed because it fails to capture behavioural responses by taxpayers. We show that, in the presence of such behavioural responses, tax gap measures both for indirect taxes (such as the ‘VAT-gap’) and direct (income) taxes exaggerate the degree of noncompliance. Further, where these conventional tax gap measures motivate reforms designed to increase the tax compliance rate, they will likely have a tax base reducing effect and hence generate a smaller increase in realised tax revenues than would be anticipated from the tax gap estimate

Tax compliance costs for small and medium sized enterprises: the case of the UK

© School of Taxation and Business Law (Atax), Australian School of Business The University of New South WalesThis paper presents a section of the findings from the UK arm of an international research project that is evaluating and comparing tax compliance costs affecting small and medium sized enterprises (SMEs) across four countries. It has been argued that the regulatory requirements on businesses, particularly those on SMEs, are burdensome and can be a constraint on their growth and so success. There have been considerable developments in tax policy, which have impacted on compliance costs within the UK over the last 20 years, and these are reviewed in order to set the current findings into context. The literature review considers developments in the split between core compliance costs, total costs and the costs of activities that are required for ongoing business decisions unconnected with tax. In accordance with researchers working in other countries taking part in the international study, a questionnaire was developed to investigate the amount of money and time spent on accounting and tax related activities, eg external services, payroll services, together with details of record keeping and accounting including an assessment of the benefits of keeping tax records. The Association of Chartered Certified Accountants (ACCA) agreed to be involved by circulating their members working within SMEs with an e-mail from their Head of Taxation, Chas Roy-Chowdhury, inviting them to complete the questionnaire and submit their responses online. These were then processed by an online survey website and this data formed the basis of the input for analysis using SPSS. Initial findings suggest that 85% of SMEs paid for external services for tax related work with the amounts ranging from < £1,000 to over £40,000, excluding VAT. Rather less, 66% of SMEs, paid for non tax related services with the amounts paid ranging from £500 to £128,000. Only 32% of the firms our respondents worked in paid for payroll services, and this may be due to the fact that our sample were qualified members of ACCA and so able to manage an in-house payroll service. The main time consuming activities are completing returns, calculating and paying tax with VAT consistently more time consuming than the other taxes in the survey, income tax / corporation tax, PAYE and capital gains tax. This is closely followed by keeping up to date on tax matters, such as learning about tax law, reading newsletters and bulletins and visiting the HMRC website. In assessing the benefits of keeping records almost 50% agreed that having to comply with tax obligations helps improve the record keeping of the business. This compares to 27% who agreed that having to comply with tax obligations improves the knowledge of the profitability of the business and a similar percentage who agreed that complying with VAT obligations provides the business with up to date useful information. In conclusion we reflect on these results in the context of ongoing changes in tax policy in the UK

The Tax Gap: A Methodological Review

The global economic crisis has highlighted the continuing problem of tax evasion. For tax agencies to respond, an important antecedent necessitates knowing the extent of the problem. This study is the first to comprehensively review recent research on the tax gap. Our primary contributions are two-fold. First we argue that the tax gap, as conventionally defined, is conceptually flawed because it fails to capture behavioral responses by taxpayers adequately. Our second contribution is to review methods for measuring the tax gap and compare empirical estimates. We suggest that many of the most trenchant criticisms of conventional tax gap measurement (and the ‘hidden economy’ measures that underlie them) leave only microdatabased measures of tax non-compliance as likely to deliver more reliable tax gap estimates. Even here, however, further work is required, on both conceptual and empirical aspects, before tax gaps suitable for policy analysis (e.g. implications for enforcement policy) are likely to be delivered

Sharing corporate tax knowledge with external advisers

Tax knowledge is critical for companies to comply with tax laws and engage in tax planning and avoidance. Firms rely on external advisers in handling tax issues, however, sharing corporate tax knowledge with external advisers entails both opportunities and risks. We identify four relational factors that are associated with the decision of corporate taxpayers to share knowledge with external tax advisers. Survey data from 221 corporate taxpayers reveals a novel distinction between operational and strategic knowledge sharing. The operational dimension has a functional nature, whereas the strategic dimension has a more intentional character. Accessibility to, and a positive experience with, external advisers enables operational knowledge sharing. When firms perceive specific tax benefits in relation to sharing knowledge, they are more inclined to engage in operational knowledge sharing with external advisers but less prone to strategic knowledge sharing. Instead, strategic knowledge sharing is enhanced when firms have access to, and value the knowledge of their advisers, although this latter factor plays no significant role in explaining operational knowledge sharing. A positive experience with advisers also associates with strategic knowledge sharing. We link our results to other research and discuss implications for regulators considering, or requiring, firm disclosures of corporate tax strategy

Current developments in UK tax compliance research.

Conference paperOverview of Talk • Context of Tax Research in UK – Culture of government • Role of Inland Revenue – Policy, structure, external links • Current Tax Compliance Research – Individual developments explored • Future Challenge

Political, social and economic determinants of corporate social disclosure by multi-national firms in environmentally sensitive industries. Working Paper 28.

Abstract Using examples from environmentally sensitive industries, the paper examines the determinants of corporate social disclosure (CSD). The paper moves beyond the traditional literature in two respects. First it is international in scope, examining the accounting disclosure responses of multi-national companies to the pressures implied by the nature and scope of their operations. Second, variables measuring political risk and social development are developed so that these pressures can be measured, thereby introducing new dimensions to the literature. In common with previous studies, financial risk, size and other control variables are included. The relationships are tested econometrically utilising regression techniques not previously applied in the CSD literature but nonetheless more generally appropriate when using count dependent variables. Results suggest that managers feel an unequal sense of responsibility to different constituencies and their disclosure priorities are determined by stock market accountability, lobbying power of their domestic audience and the political risk of their activities rather than the impact of their activities in countries of operation