M48 - Accounting and Auditing: Government Policy and RegulationReturn

The predictive value of tax allocations (deferred taxes) and their incremental power in explaining future cash taxes paid and current tax expenses in the agricultural industry is a topic of significant relevance. This is particularly important for policymakers and managers due to the complexity of accounting standards in this area. The goal of the paper is to enhance the understanding of tax planning techniques used by agricultural companies. We consider four variables crucial in our analysis: dependent (cash taxes paid and current tax expenses) and independent variables (deferred tax assets and deferred tax liabilities). Our modelling of the relationship reveals that current tax expenses have a predictive power to explain variations in the cash outflow for income taxes, making it a relevant factor. Deferred tax assets explain the cash tax outflow, while regression demonstrates the power and relevance of deferred tax liabilities in predicting variations of current income tax expenses in agricultural companies.
Implications for Central European audience: In Central Europe, the business environment and influence of the agricultural sector are similar to those in Serbia. Companies apply the same accounting standard for the recognition and evaluation of deferred taxes according to the IAS 12 standard. The results of this paper could be used by managers in all companies in this industry to apply adequate tax planning techniques to satisfy their tax goals and to minimize tax litigation risk.

The objective is to assess the quality and quantity of non-financial disclosures required by Directive 2014/95/EU for companies operating in the energy sector in the Czech Republic before and after the introduction of the obligation of non-financial disclosure for large publicly traded companies. The information disclosed by companies is the subject of quantitative research. Non-financial information in the form of annual reports or sustainability reports before (2015, 2016) and after (2017–2021) the introduction of the duty of non-financial reporting was the subject of the analysis. The textual analysis of these reports was carried out using IRAMUTEQ software and used to assess the quality of non-financial reporting of Czech energy companies. The quality of disclosures was evaluated in two ways: the length of non-financial reports (number of words, sentences and pages) and the incidence and number of occurrences of identified words. A paired t-test was employed for the evaluation. It was confirmed that those companies that were required to report non-financial information related to their operations in 2017 increased their disclosures in areas with the strongest environmental impact. This method could allow stakeholders to assess the quality of disclosure and its evolution over time with relative ease.
Implications for Central European audience: Companies should offer transparent information about the environmental impact of their activities and how they engage with employees and other partners. Non-financial reporting plays a crucial role in achieving this transparency. Given the substantial environmental footprint of companies in the energy industry, the objective of this paper was to assess whether companies operating in Central Europe provide stakeholders with pertinent information and to examine the impact of the Non-Financial Reporting Directive on the disclosed information.

This study investigates the impact of audit committee members’ competence on the ethical aspects of external audits and its influence on the audit quality of public interest entities (PIEs). Using a mixed-method approach, including surveys with respondents at audit firms and PIEs in Europe and semi-structured interviews with participants at PIEs in Europe, the findings highlight the importance of pre-appointment training for audit committee members concerning external audit ethics. This pre-appointment training would enable audit committee members of PIEs to evaluate whether external auditors and audit firms should implement appropriate safeguards and mitigations to ensure the ethical audit practices of PIEs. The study recommends stringent global regulatory provisions mandating specific guidelines for PIE audit committees for assessing external auditor independence and minimizing potential conflicts of interest to preserve the PIE audit quality.
Implications for Central European audience: For the Central European audience, the study advocates for mandatory pre-appointment training of prospective audit committee members and restrictive regulatory mechanisms to enhance audit committee members’ competence concerning the evaluation of external auditors’ independence and minimizing potential conflicts of interest for ensuring ethical audit practices and preserving PIE audit quality.

This paper analyses, reviews and connects the existing literature about workplace health management systems. We investigate the empirical evidence if a mandatory implementation could lead to a Pareto improvement for all stakeholders. This evaluation is based on the inclusion of several studies, which are not yet connected to the health-related issue. The increasing incidence of employee health issues generates high costs for employers as well as for insurers. Workplace Health Management Systems act as preventive measures in reducing health-related costs. Many case studies are used to explain the concepts and the specific cost reduction for the companies analyzed. But there is still a lack of a broad empirical base to provide convincing evidence for the cost-effectiveness of these programs. To demonstrate the general efficiency of these systems, several studies of different concepts with similar characteristics are compared to ensure, that the mandatory implementation leads to positive effects on the economy. We find that by implementing just a few prevention measures, positive returns can be achieved for a majority of sectors. Given that the market seems incapable of creating this allocation improvement by itself, the integration of health management into the Working Conditions Act seems reasonable, since this could allow a Pareto-efficient outcome to be achieved. Consequently, implementation will not lead to a reduction in the competitiveness of European employers, but rather to increased staff retention and improved productivity due to fewer employee sick days and an improvement in public health and makes the mandatory implementation of workplace health management systems a considerable issue for policymakers.