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From Disconnected to Integrated tax and financial systems A post-IFRS evaluation of evolution of Tax and Financial Reporting relationships based on the French case

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  • Barbe, Odile
  • Didelot, Laurent
  • Ashta, Arvind

Abstract

The globalization of financial markets has required the use of common reporting standards, notably the IFRS. These are impacting the accounting systems of many countries. However, accounting systems are also often used for national tax reporting. This creates a divergence in the reporting needs which existing accounting systems are unable to meet and some amount of duplication is therefore required for tax reporting and financial reporting. Previous studies have talked about linkages between accounting and taxation and have found aspects of their systems identical, disconnected, accounting dominated or tax dominated, and that this mix changes over time, with a definite evolutionary model. This conceptual paper, grounded in French empirics, examines whether since the new IFRS, the existing theoretical evolutionary model is adequate, and finds that it is not. It then proposes an alternative integrated accounting system to satisfy simultaneously the financial and tax reporting requirements. The integrated accounting system should result in economies.

Suggested Citation

  • Barbe, Odile & Didelot, Laurent & Ashta, Arvind, 2014. "From Disconnected to Integrated tax and financial systems A post-IFRS evaluation of evolution of Tax and Financial Reporting relationships based on the French case," Research in Accounting Regulation, Elsevier, vol. 26(2), pages 242-256.
    • Handle: RePEc:eee:reacre:v:26:y:2014:i:2:p:242-256
    DOI: 10.1016/j.racreg.2014.09.002
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    More about this item

    Keywords

    Accounting; IFRS; Tax; Taxation; Financial reporting; France;
    All these keywords.

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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