OUR ONGOING RESEARCH PROJECTS

An Assessment of External Audit Performed by Courts of Accounts in Brazil :: FGV-PPA, CAPES-Print e FAPERJ-CNE

This applied research project has the broad scope of assessing the quality of the audit services provided by Brazilian Governmental Courts of Accounts (known in Brazil as Tribunais de Contas). In 2016, the Brazilian whole of government spent approximately USD 1.6 billion (0.1% of Brazilian GDP) on the external control budgetary function. However, frequent corruption scandals involving public agents and/or under-optimal decisions on the allocation of public resources have raised doubts about the independence and quality of the control exercised by courts of accounts. Although, governmental auditing is not a widely studied topic. Existing literature analyzes auditing under different perspectives, investigates incomparable samples of states or municipalities and does not provide continuous assessment. Aiming to contribute to academic literature and spur puanblic debate about governmental audit, we intent to continuous and comparatively assess the quality of financial reports prepared by Brazilian states and municipalities vis-à-vis the quality of auditing services provided by courts of accounts.

Análise da conformidade do panorama regulatório brasileiro do mercado de ativos :: PFGN

O Projeto tem como objetivo fazer uma avaliação do nível de conformidade do Brasil às recomendações 24 e 25 formuladas pelo Grupo de Ação Financeira contra a Lavagem de Dinheiro e o Financiamento do Terrorismo (Gafi/FATF) do Ministério da Economia como procedimentos a serem adotados pelos países no combate à lavagem de dinheiro e ao financiamento do terrorismo, inspiradas em padrões internacionais.

Análise da recuperabilidade da dívida ativa inscrita com base no risco :: PFGN

O objetivo da pesquisa é realizar uma comparação da recuperabilidade dos créditos inscritos em dívida ativa com base no risco - estabelecida pela Portaria 32/2019, o qual considera aspectos econômicos e características do crédito - em comparação à recuperabilidade dos demais créditos.

Análise do value for money da cobrança da dívida ativa por atividade de cobrança :: PFGN

O objetivo do trabalho é avaliar o custo médio da cobrança da dívida ativa pela PGFN (por tipo de atividade de cobrança, conforme a representatividade de informação sobre os recursos consumidos e
seus valores quanto pela granularidade da informação por diferentes objetos de custeio.

Análise dos custos de cobrança da dívida ativa :: PFGN

O Projeto tem como objetivo definir critérios e valores sobre os custos envolvidos na cobrança da dívida ativa, principalmente em função do foro onde o processo judicial tramita, seja federal e estadual.

Auditing Practice and Cognitive Aging

We show that auditing practice is more likely to prevent cognitive reflection abilities (CR-abilities) decline than financial reports elaboration practice. We rely on the institutionally unique setting of the Brazilian accounting profession together with previous research and interviews to reason that, while auditors and preparers follow indistinguishable educational paths, auditors usually engage in more cognitively taxing tasks than preparers. We collect data from a large number of Brazilian CPAs and use a quasi-experimental approach to estimate the moderation effect of career on the relationship between aging and CR-abilities. We find that CR-abilities do not differ at early career stages, but preparers’ CR-abilities decline across aging, whereas auditors’ CR-abilities are preserved. We cluster CPAs by age subgroups and compare auditors and preparers who are very similar across several personal and professional individual characteristics but career. This approach overcomes some of the pitfalls of previous studies, strengthening causal inferences.

Avaliação da efetividade do Instituto da Recuperação Judicial na recuperação das empresas :: PFGN

O objetivo do projeto questão é investigar se o instituto da recuperação judicial, estabelecido pela Lei nº 11.101/2005, vem sendo utilizado por contribuintes inadimplentes com o propósito de postergar a inevitável falência, o que não gera os benefícios sociais almejados pelo art. 47 mas impõe ônus à PGFN e ao erário.

Do Professional Judgments Impact Financial Reports Comparability under IFRS? The Effects of Cognitive Ability and Work Experience

This study examines the influence of cognitive reflection abilities (CR-abilities) and professional experience in pressured firms on CPAs’ classifications of audiovisual content (AV-content) assets and cash flows and, ultimately, on the comparability of the resulting financial reports. We explore the overlapping IFRS guidance on AV-content classifications and find that low CR-ability CPAs are likely to jump to the first intuitive answers that come to mind when classifying AV-content assets and cash flows, whereas high CR-ability CPAs tend to go beyond these intuitive judgments. We also find that CPAs with experience in listed, large, and/or audited firms are less likely to rely on CR-ability to avoid misleading classifications of assets driven by Type 1 processing. It suggests that professional experience in pressured firms fosters a red-flag system in CPA’s minds to activate Type 2 processing when deciding on financial reporting subjects.

Dual-system accounting: a battle between dominant and competing logics

This study exploits, through the lens of preparers, the context of the dual-system accounting, and investigates: (1) which is the dominant logic on the perspective of preparers of accounting information; (2) whether the dominant logic has biased public sector accountants’ sensemaking when they need to apply the competing logic; and (3) whether accountants’ personal traits influence their ability to detach from the dominant logic and properly prepare either budgetary reports or financial reports. Evidences from two experiments with Brazilian governmental accountants: (task 1) accounting for the purchase of equipment; (task 2) accounting for tax revenue.

Impacto da tecnologia na atividade de auditoria pública :: CGU-MAP

It aims to investigate how data analytics and machine learning can assist the auditing of internal controls of Transferências Voluntárias da União (non-mandatory transfers from the Federal government to states and municipalities) managed at the Sistema de Convênios do Governo Federal – SICONV. It is a case study of the “Malha Fina de Convênios”, maintained by the Controladoria-Geral da União (CGU) and the Ministério da Economia.

Impactos da inadimplência tributária na estrutura de concorrência :: PFGN

O objetivo do projeto é investigar se a inadimplência tributária afeta a concorrência, ou seja, investigar se a sonegação proporciona vantagem competitiva ao devedor. Caso os contribuintes inadimplentes (irregulares) cobrem preços significativamente mais baixos pelos mesmos produtos que contribuintes adimplentes (regulares), poderemos inferir que a inadimplência tributária faz parte da política de preços

Impactos da opção pela desjudicialização :: PFGN

O Projeto tem como objetivo analisar os impactos da decisão adotada pela PGFN de priorizar a cobrança administrativa em detrimento da cobrança judicial (desjudicialização), avaliando a potencial redução na taxa de congestionamento da Justiça Federal e os resultados em termos da recuperabilidade dos créditos inscritos em dívida ativa.

Measuring with Exogenous Data (MED), and Government Economic Monitoring (GEM) :: Rutgers-CARLab

The emergence of enormous disparate data sources, available in a multitude of alternate formats, and on very different devices is leading to a business process revolution. We argue for a new approach in which these technologies are used to replace outdated blanket government intervention programs. Highly targeted interventions for social programs identified and addressed by big data based methodologies would replace outdated government programs. This approach advocates for original detective methodologies, direct government action, and outcome monitoring all of which utilize big data based frequent examination. The government would be in a privileged situation where it could acquire data not be made available to most other parties due to privacy laws. The data structures of the government would be protected by encryption and block chain privacy protection methodologies that would only reveal targeted outcomes to the direct-action agent.

Probable at first glance, but unlikely after closer look: The role of cognitive reflection ability on the assessment of probability expressions

Making numerical probabilistic assessments of probability expressions is a central and vital task for accountants who prepare or audit financial reports. This study investigates whether accountants’ cognitive reflection ability affects the assessment they make about the probability associated with the terms ‘probable’, ‘remote’, ‘virtually certain’ and ‘reasonable certainty’ in the context of international accounting standards. Results from a survey with 569 accountants confirm that reflective accountants, compared to their impulsive peers, are much more reluctant to accrue or disclose net assets increasing events (average increase of 4.47% in the threshold) than decreasing events (average decrease of 1.99% in the threshold). Hence, we identified that impulsiveness impacts the timing of recognition of changes in net assets, what we have called ‘cognitive-conditional conservatism.’ Additionally, results reinforce that the interpretation of such probability expressions is context-dependent and that the terms remote and virtually certain have higher communication efficiency than probable and reasonable certainty.

The effect of cognitive reflection on the efficacy of combined techniques of graph impression management

We investigate whether analysts’ personal cognitive traits mitigate the efficacy of graphical impression management. Based on experimental evidence from professional accountants who working as financial analysts, where they rated a hypothetical company’s performance graph depicting its net income trend. The manipulation is the presence (absence) of impression management techniques. Hypotheses test whether combinations of different techniques are effective and whether analysts’ cognitive reflection ability mitigates manipulation efficacy. Financial analysts, auditors and regulators could develop mechanisms to avoid pervasive usage of (or enhance skepticism regarding) techniques not mitigated by users’ reflectiveness.

Tunneling in the public sector :: CAPES-Doutorado

Parties are related whether one controls the other, they are subject to common control, or one of them exercises significant influence over the other party. Although related party transactions are not a problem if they are managed at arm’s length, related party transactions may be used for tunneling purposes, diverting resources from one party to another, despite the existing accounting standards. Seemingly, accounting standards and legislation do not comprehend every possible related party. Hence, the objective of this research is to propose a more comprehensive definition of related party by investigating transactions in the public sector, through an analysis divided into four papers. The first paper will analyze norms and regulations concerning related parties in the aim of identifying gaps and proposing improvements. The second will analyze transactions between a municipality and its related parties during the past 15 years. The third paper will analyze the influence of related parties in one of the state-owned enterprises of that municipality during that period. Lastly, the fourth will analyze current monitoring, performed by government control bodies and audit institutions, of transactions in government entities, electoral donations, and political parties’ influence, to propose more comprehensive monitoring based on the research findings.