Financial Reporting and the Accounting Expectations Gap

The overall goal of financial reporting is to provide high quality financial information regarding reporting entities that is useful for informed decision making. Considering most organizations have multiple groups of stakeholders which often have differing and competing informational needs, as well as expectations and desired outcomes, the accounting expectations gap has become a topic of current debate in many business circles. Historically, the accounting expectations gap has centered around the role of the auditor and audit responsibility. The financial accounting expectations gap encompasses what the preparers of the statements and auditors believe they should contain and includes what stakeholders believe the financial statements should contain. The purpose of this paper is to extend and apply existing literature to the financial reporting expectations gap and bridge the gap in between the two approaches. The conclusions, recommendations, and implications reached are generalizable and appropriate for use in developing best practice solutions

Exploring the Use of Expatriate Management to Improve the Quality of Earnings Being Reported by MNC\u27s

As organizations have strived to create global footprints and search for economies of scale, there has been a great deal of literature devoted to global expansion. This study is intended to fill a gap in the existing literature relating to the impact that financial expatriate management has had on multi-national expansion and how the quality of earnings being reported have been used as drivers for global expansion. By using the shared experiences of corporate financial executives, responsible for global financial reporting functions, the study of organizational reporting practices will serve to shed light on the procurement of quality information used in support of global strategic initiatives. The conclusions, recommendations, and implications reached are generalizable and appropriate for use in developing best practice staffing solutions

Evaluating Flat Tax Theory: A Conceptual Framework

Tax receipts form one of the key tools of current macroeconomic fiscal policy. As governments are forced to increase spending levels satisfy their respective social, political or economic goals, they are consequently are forced to review new or additional sources of tax review. Government officials and political candidates theorize that new expensive programs can be paid for by increased taxes. A flat tax system has also been theorized to be an equitable solution to satisfy the increased tax revenue requirements. This paper reviews in general terms the current progressive tax system as well as a regressive flat tax system. This study further illustrates various approaches to the flat tax system, its benefits, and demerits on individuals and the general economy. The conclusions, recommendations and implications reached are generalizable and appropriate for use in developing best practice solutions

Asymmetric Cost Behavior: Exploring Ethical Issues Facing Management

Asymmetric cost behavior or cost stickiness is a relatively new phenomenon in accounting. Cost accounting initially assumed that traditional cost behaviors follow a symmetrical pattern, whereas sales and costs rise and fall equivalently with each other. Extending the research of Anderson, Banker and Janakiraman (2003) which introduced a theory that contradicted the normal symmetrical cost behavior by suggesting that internal factors, such as management decisions impact spending resulting in asymmetric cost behavior or cost stickiness. The objective of this paper is to explore whether asymmetric cost behavior or cost stickiness impacts corporate earnings of enterprises and if so, does this inadvertently create ethical issues for decision-making by management, as they may benefit in compensation from these decisions. By examining the link between Sales General and Administrative expenses (SG&A) and earnings, this paper shows how asymmetrical behavior influences management decision making cost. The conclusions, recommendations and implications reached in this study are generalizable and appropriate for use in developing best practices

Evaluating the Effect of Corporate Tax Reductions on Value Chain Sourcing Decisions

The objective of this paper is to evaluate the changes in the elements of the value change sensitivity model and identify if there has been a significant shift in the profitability of one country to another. Validating the work on the adjusted present value (APV) formula provided by Rainish, Mensz, and Mohs (2015), this paper analyzes how the new U.S. corporate tax rates will impact a company’s sourcing decision. Also, the value-added tax (VAT) is used in all other OECD countries, except the U.S, and therefore this will be part of the evaluation. The third variable that has a crucial impact on sourcing is the average manufacturing wage of the different countries. By examining the taxation and labor system, this paper shows how these essential cost drivers influence the value-chain modeling for the global sourcing. The conclusions, recommendations and implications reached in this study are generalizable and appropriate for use in developing best practice solutions

Exploring the Impact of Tariffs on Foreign Direct Investment and Economic Prosperity

The global economic environment has become more interconnected, a significant portion of which can be attributed to countries welcoming foreign businesses through foreign direct investments (FDI). FDI is powerful in its ability to grow and develop home companies while shaping host economies, which lays out a critical role in the generating opportunities, strengthening economies, and the circulation or velocity of capital. This paper extends the initial work of Ranish, Mentz and Mohs (2015) relating to global value chain decision making. The purpose of this research is to review and outline the sensitivity to Tariff’s on FDI and economic growth. The conclusions, recommendations and implications reached in this study are generalizable and appropriate for developing best practice solutions

The Evolving Enforcement of E.U. Competition Laws

Entrepreneurship and new business development has been increasingly moving to the forefront of media, public and governmental attention. Many countries have enacted competition laws to curb abuses and specifically prevent unfair competition. Unlike the Unites States, enforcement of competition law in Europe has historically been the domain of the government, generally under the of the European Commissioners for Competition, and does not rely on private actions of entrepreneurs and new business developers. By combining existing worldwide case law, legislation and governmental policies as a lens, this paper is intended to fill a gap in the existing literature relating to the impact of European competition law and the growth of entrepreneurial enforcement of unfair competition practices. The conclusion and recommendations reached are generalizable and appropriate for use in developing best practice solutions

Exploring the Effect of Financial Literacy Programs on Low-Income Adults

Financial literacy is a necessity of modern adult life. Obtaining control of personal finances is challenging for everyone. The lack of financial literacy in the low income adult grouping has become more problematic as personal finances become more complex. Utilizing a series of interviews the shared experiences of the study participant’s reflected in-depth descriptions of the personal lived experiences relating to financial literacy concepts, educational programs, and future expectations from the participants. This study addresses the perceptions and expectations of low-income adults regarding financial literacy programs and attempts to isolate ways to increase attendance in educational financial literacy programs. Using a series of thematic questions, three significant areas emerged relating to participants’ characteristics, types of services required and access to programs are explored. The results reverse the top down approach of financial program development from what lowincome adults need to learn to participate in mainstream financial sector to what low-income adults want to learn to secure a stable financial future. The conclusions, recommendations and implications reached are generalizable and appropriate for developing best practices delivering financial literacy programs to the low income adult population

The Impact of Taxes on Foreign Direct Investments

The role of taxation in the area of foreign direct investment and economic growth has been the topic of many studies. With the effect of newly enacted corporate tax reform in the United States the impact will become the topic of many future studies. This paper will review the common factors used to correlate the impact of corporate taxation on Foreign Direct Investment decision making. The purpose of this research is to review and outline the sensitivity to taxation based on a multiplicity of economic factors that will include taxation on the return on investment and global profits. For the purposes of this research only indirect taxes haven been considered. The conclusions, recommendations and implications reached in this study are generalizable and appropriate for use in developing best practice solutions

Tax Planning Under the Inflation Reduction Act of 2022

The Inflation Reduction Act of2022 (the Act ), signed by President Biden on 8/16/2022, contained an array of tax provisions that should be considered in tax planning for clients. The Act is a budget reconciliation bill whose origins can be traced back to the American Rescue Plan Act of2021, as well as the American Jobs Plan (AJP) and the American Families Plan (AFP). Each plan contained aspects of tax incentives for green energy construction, conservation, and infrastructure improvements, as well as for healthcare benefits. What we see in the Act is the last iteration of these developing tax incentives. The Act is a scaled-down version, and immediate successor, to the Build Back Better Act which passed in the House of Representatives in 2021 but failed to pass in the Senate. It incorporates and enlarges on many of the tax provisions in the Build Back Better Act related to energy efficiency and healthcare