Journal of Accounting, Business and Finance Research

The role of legal system in SME bank credit in ASEAN

Ei Ei Thein — 2024-09-20

This study aims to investigate the role of legal system in the access to bank credit of small and medium enterprises (SMEs) and explores the measures to improve legal system among the Association of South-East Asian Nations (ASEAN). By applying the ordinary least squares (OLS) method, the study examines the bank credit accessibility of over 12,000 firms across eight ASEAN countries, using the data collected from the World Bank’s Business Environment and Enterprise Performance Survey (BEEPS), in relation to each country's contract enforcement indicators. The estimated results reveal a significant positive relationship between contract enforcement and SMEs’ access to bank credit. Furthermore, the results show that long time consumption and large costs for contract enforcement reduces financing opportunities of SMEs. Additionally, the study finds that a country’s legal tradition does not impact the effectiveness of its contract enforcement. Implementing electronic filing systems and limiting times and costs for legal processes can enhance contract enforcement. Consequently, strong contract enforcement appears to encourage banks to increase SME lending, leading to higher SME bank credit in countries with efficient contract enforcement mechanisms. Enhancing contract enforcement can increase SME financing and consequently, will improve a country’s financial intermediation. These findings underscore the importance of contract enforcement including its duration and cost, in the context of SME financing and suggest ways to improve a country’s legal system to foster SME access to bank credit.

Globalized accounting profession and the U.S. certified public accountancy

Recep Pekdemir — 2024-11-05

Globalization has affected the accounting profession most throughout the world. In today’s environment, many international accountants have recently become Chartered Accountants (CA) of the United Kingdom or Certified Public Accountants of the United States and Territories, even though they do not live in those countries. In addition, the number of international candidates has been increasing gradually, and they should know how to be licensed for one or both of those designations. In this context, the paper argues how anglophone accounting institutes and associations of English-speaking countries overwhelmingly have impacted the global accounting profession during the last two decades. In addition, it discusses the requirements for international candidates to become a Certified Public Accountant (CPA) in the United States. Consequently, the paper summarizes and documents the education requirements for international candidates who want to be licensed as a certified public accountant in the United States. National and global stakeholders, such as accounting students, accounting organizations, and regulators, may find this helpful information.

Recuperation mechanism of direct taxation to control post covid economic contraction: India’s new tax reform with crypto tax

Ruby Khan — 2024-11-05

This study explores the impact of the progressive tax structure on income equality, emphasizing the significance of direct taxes in promoting economic and social equality. It also examines the challenges faced by the Indian government in meeting its revenue targets due to the decline in corporation tax and personal income tax revenues. The present study assesses the role of the newly implemented tax by the Indian Finance Ministry on capital gains from the sale or purchase of cryptocurrencies and its impact on economic growth. A qualitative approach has been adopted, utilizing secondary information sources for characterization and analysis. The study relies on Time Series Data from the Income Tax Department for the financial years 2000-01 to 2018-19 and global estimates of total tax revenues published by the International Centre for Tax and Development (ICTD). The findings indicate that the substantial decline in direct tax revenues necessitated a search for alternative sources of income. The separate taxation system for cryptocurrencies has legitimized digital assets and enabled the government to monitor transactions and capital gains. The introduction of the "Digital Rupee" aims to enhance the digital economy through efficient currency management. This research highlights the need for policymakers to develop a well-defined regulatory framework for cryptocurrency taxation. Clear regulations on cryptocurrency taxation and the "Digital Rupee" could help India boost its digital economy while ensuring better monitoring of crypto transactions and revenues.