The Empirical Evidence of Corporate Tax Effect on Private Investment in Ghana

2018 ◽  
Author(s):  
Emmanuel Tweneboah Senzu
Keyword(s):  
Empirical Evidence ◽  
Private Investment ◽  
Corporate Tax ◽  
Tax Effect

A historical review of the rise of tax effect accounting as a financial reporting norm

2018 ◽  
Vol 24 (4) ◽  
pp. 562-590
Author(s):  
Elizabeth Frances Morton
Keyword(s):  
Life Cycle ◽  
Financial Reporting ◽  
Income Tax ◽  
Balance Sheet ◽  
Historical Review ◽  
Normative Theory ◽  
Corporate Tax ◽  
Financial Reports ◽  
Accounting Practice ◽  
Tax Effect

This paper deals with one of the most long standing and contentious aspects of company financial reporting: tax effect accounting (TEA). The TEA “life cycle,” its transition from a novelty—emerging as what “ought” to happen due to the “issue” of a newly introduced and problematic corporate tax—to a taken for granted norm in contemporary accounting practice, is explored through a constructivist lens. This investigation reveals that a bundle of factors contributed to the norm’s legitimization, not simply the normative theory that TEA’s “normalising effect” improves the usefulness of financial reports by “correcting” misleading and “unreal” fluctuations in income tax. Once established, the profession can become “captive” by such history. This paper further illuminates TEA’s more recent re-orientation to the balance sheet approach as being consistent with a new emergent norm. This signals incongruence with being purported as a “more complete” reflection, given such a shift can be characterized as a secondary norm with a differentiated purpose.

Default Risk and the Effects of Fiscal Policy on Interest Rates: 1929–1945

1988 ◽  
Vol 16 (3) ◽  
pp. 357-373
Author(s):  
David Bowles ◽  
Holley Ulbrich ◽  
Myles Wallace
Keyword(s):  
Fiscal Policy ◽  
Interest Rates ◽  
Empirical Evidence ◽  
Risk Premium ◽  
Default Risk ◽  
Corporate Bonds ◽  
Private Investment ◽  
Crowding Out ◽  
Government Bonds ◽  
Macroeconomic Models

Conventional macroeconomic models suggest that expansionary fiscal policy causes higher interest rates, resulting in crowding out of private investment. In this article, we argue that such models ignore the default risk differential between the interest rates on government bonds and corporate bonds. If expansionary fiscal policy causes an expansion in real GNP, default risk falls on corporate bonds. Our model suggests that if the default risk premium falls, (1) corporate interest rates may fall relative to rates on government bonds and (2) private investment is crowded in. We find some supporting empirical evidence of this effect for the period 1929–1945.

Sign in / Sign up

Export Citation Format

Share Document