TRR 266 Accounting for Transparency


We explore how accounting and taxation affect firm and regulatory transparency
and how regulation and transparency affect our economy and society.


Calls for increased transparency are pervasive, particularly after the recent series of financial crises, prominent accounting fraud scandals and public outrage about excessive shifting of taxable profits by global corporations. These calls for more transparency continue to exist despite concerted regulatory actions with the aim of increasing firm transparency that have substantially tightened reporting requirements for companies and introduced a whole portfolio of anti-avoidance measures. Consequently, both the amount of available information as well as the regulatory burden of firms have increased substantially world-wide. Complexity has increased and creates opportunities for regulatory arbitrage. However, whether this increased level of information has generated more transparency and its expected positive societal outcomes is unclear.

The historical role of accounting is to aggregate firm-level information into quantitative data. These data are communicated to insiders and outsiders of the firm, who use it to levy taxes and to support investment as well as other economic decisions. The digital revolution has drastically changed the information environment: Information has become ubiquitous, is being generated by diverse senders and distributed via a variety of channels to heterogeneous receivers who process and analyze the data and base various decisions on it. It is unclear how the traditional methods of accounting that focus on numbers, facts, and verified judgments can continue to create transparency in this transformed landscape.



We collect field data to analyze the perception, processing and handling of accounting information. We study how regulations, behavior, and preferences of economic agents shape accounting information and its effects on the transparency of firms. One focus lies on the transparency of the accounting and business taxation system. Furthermore, we assess the consequences of transparency for firms, their stakeholders and the general public. The insights from these activities will allow a well-founded assessment of regulatory reforms in the area of business taxation and financial reporting. To this end, the TRR 266 contributes to evidence-based policy making and to establishing a transparent tax system.

Our research program has the following three goals:

  1. develop tools to assess the transparency of firms,
  2. understand how transparency is established by regulation and the behavior of information senders and receivers, and
  3. understand how transparency affects society.


Read more about the location and members of TRR 266

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