Thomas M. Porcano

Correlates of tax evasion

Abstract Tax evasion has increased in the United States. Estimates of evasion indicate that the amount of federal income taxes evaded equals the federal deficit. Thus, controlling tax evasion should be a major concern of future tax policy decisions. This study analyzes the effects of 18 variables that might affect tax evasion. Specifically, the variables were used as independent variables in discriminant analyses to determine their relationship to tax evasion. The results indicated that the variables affect different types of tax evasion differently, and that all variables do not significantly influence tax evasion. Policy implications are presented based on these results.

An empirical analysis of some factors affecting student performance

Abstract Many colleges and universities use instructor and course evaluation forms. Overall, however, contradictory evidence exists concerning the usefulness of these forms as measures of teacher performance. Among the business school disciplines, few studies on the effects or usefulness of the forms have been undertaken. Responses to a 34-item questionnaire (instructor evaluation form) were factor analyzed to identify salient dimensions of the classroom/ learning environment and then the factors were correlated with student performance. The results indicate that responses related to teacher factors in the principles area may not be related to student performance. However, in the taxation and cost accounting areas the responses might be somewhat useful in gaging instructor performance.

Acquiring international tax knowledge

Accounting programs and tax course offerings have been evolving in recent years, and one concern is the coverage of international tax topics. Although international tax is of prime importance to multinational corporations and Congress, little research has addressed the extent to which accounting programs cover international tax topics and whether demand for such coverage exists. This chapter presents the results of surveys about how students desiring a career in international tax services (ITS) can obtain international tax knowledge and what topical areas are most important. Many graduate accounting and taxation programs offer stand-alone international tax courses. Recruiters and professors characterize foreign tax credits, transfer pricing and treaties as the most important areas to emphasize in these courses. Though not essential to a career in ITS, taking an international tax course while in school exposes the student to this career opportunity, and a significant percentage of new hires come from programs offering such a course. Our results provide accounting educators with information to evaluate their coverage of international tax topics, and to make changes if needed.

AUDITOR LIABILITY: A REVIEW OF RECENT CASES INVOLVING GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND GENERALLY ACCEPTED AUDITING STANDARDS

Abstract The Securities and Exchange Commission (SEC), the primary regulatory body that oversees the operations of the financial markets, requires that publicly-traded companies be subject to an annual audit – a set of procedures designed to determine whether a firm’s financial statements fairly comply with generally accepted accounting principles (GAAP). When performing audits, auditors use generally accepted auditing standards (GAAS) as guidelines in determining the amount of evidence to gather and to what degree the client’s accounting system may be relied upon. Since investors and their advisors rely on audited financial statements to make investment decisions, auditors have a significant impact on the financial community and capital markets. Accordingly, auditors must be diligent in the execution of their duties. However, notwithstanding the high level of care exercised by most auditors, sometimes misleading or erroneous information is released to the investing public, and this article focuses on recent case law dealing with the auditor liability that attaches in such situations.

TAX ADMINISTRATION PROBLEMS: GAO-IDENTIFIED SHORTCOMINGS AND IMPLICATIONS

An assimilation and a synthesis of the major General Accounting Office (GAO) reports released on the Internal Revenue Service (IRS) for calendar year 2002 reveal a variety of tax administration problems. An analysis of the GAO reports also suggests that the IRS might be a contributor to the non-compliance problem. Additionally, Congresses and Administrations have not facilitated meaningful improvements. While the GAO reports generally attempt to portray the ongoing modernization efforts within the IRS favorably, the weaknesses identified suggest that significant tax administration problems exist. This article presents a detailed analysis of the GAO overall report on the 2002-filing season and assesses GAO reports and testimonies that contain IRS in their titles.

Chapter 15 – An Analysis of Value and Risk: The Procter & Gamble-Bankers Trust Case

Publisher Summary The 5/30 swap of November 2, 1993 between Procter & Gamble Company (P&G) and Bankers Trust New York Company (BT) stands out as one of the most egregious transactions during the decade in which Nick Leeson allegedly bankrupted Barings Bank with huge, ill-advised, and unauthorized positions in Nikkei index futures contracts and Robert Citron allegedly bankrupted Orange County by approving inverse floaters and other leveraged transactions. P&Gs non-fatal experience was more like Orange County rather than Barings because the 5/30 swap was duly authorized. The chapter presents terms, conditions, and components of the 5/30 swap as defined in the confirmation. On November 2, 1993, P&Gs treasury wanted to reduce its payments on a 5-year

An Analysis of Value and Risk: The Procter & Gamble-Bankers Trust Case

200-million swap with BT by

An Analysis of Value and Risk

800,000 per annum, and held a market view that U.S. Treasury yields would not increase much over the next six months. Consequently, for a saving of

The relation between national cultural dimensions and tax evasion

1.5 million per annum on its payments, P&G sold BT an option with a payoff that depended on conditions in the U.S. Treasury market on May 4, 1994. The aftermath of this trade was not pleasant. By March 29, 1994, to buy back an amended version of this option, P&G had agreed instead to pay BT

An analysis of capital gains tax-induced earnings management

28.2 million per annum for the remaining four and a half years of the swap rather than take a chance that P&G might have to pay an even larger additional amount.Publisher Summary The 5/30 swap of November 2, 1993 between Procter & Gamble Company (P&G) and Bankers Trust New York Company (BT) stands out as one of the most egregious transactions during the decade in which Nick Leeson allegedly bankrupted Barings Bank with huge, ill-advised, and unauthorized positions in Nikkei index futures contracts and Robert Citron allegedly bankrupted Orange County by approving inverse floaters and other leveraged transactions. P&Gs non-fatal experience was more like Orange County rather than Barings because the 5/30 swap was duly authorized. The chapter presents terms, conditions, and components of the 5/30 swap as defined in the confirmation. On November 2, 1993, P&Gs treasury wanted to reduce its payments on a 5-year