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TRR 266:  Accounting for Transparency

Subject Area Social and Behavioural Sciences
Term since 2019
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Project identifier Deutsche Forschungsgemeinschaft (DFG) - Project number 403041268
 
The Collaborative Research Center (CRC) TRR 266 “Accounting for Transparency” explores how accounting and taxation influence transparency and how transparency in turn affects society. Accounting generates and distributes financial as well as nonfinancial information about firms and other organizations to receivers such as employees, investors, customers, suppliers, and tax authorities. Taxation uses accounting and additional information to levy governmental income. Given their societal importance, accounting and taxation are subject to regulation. They affect transparency to the extent that they produce clear and accurate information that receivers are able to process and regulators are able to act upon. The CRC’s core research agenda is to understand the functioning, determinants, and consequences of this process. During the first funding period, the CRC produced a substantial body of research resulting in a large number of publications, working papers as well as other publicly available material such as data and code. This research has strengthened the CRC team’s priors that the transparency effects of accounting and taxation are highly context-specific. For example, investors process accounting information very differently and for different objectives than other receivers, such as employees. This discrepancy can lead to undesired economic outcomes. Moreover, regulation often fails to reach its societal objective. For example, companies often struggle to predict tax effects and, thus, take inefficient business decisions. Regulatory complexity creates loopholes, increases inequality, and challenges organizations and their stakeholders, including policymakers. Overall, the CRC concludes that while transparency can provide important societal benefits, it is not a panacea as often portrayed in the public debate. These findings as well as recent societal developments provide the inspiration to continue this research agenda by focusing on settings where traditional accounting and taxation practices do not work well. For example: How should firms communicate with consumers, employees, and corporate activists? How should taxation and accounting regulation be designed to promote a shift to a sustainable economy? How does accounting and transparency influence the agility and resilience of firms and institutions? And finally: When is transparency socially desirable, and when is it not? Furthermore, the CRC establishes the German Business Panel as an institution in economics and business research, promotes the idea of open science by sharing data and methods, and communicates the findings to a diverse audience (both academic and non-academic). Thereby, it aims to contribute to the development of well-designed regulations, substantiates the public debate, and enhances societal trust in research and the economic system.
DFG Programme CRC/Transregios

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Applicant Institution Universität Paderborn
 
 

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