|
Based on your IP address, your paper is being delivered by:
|
 |
 |
 |
 |
 |
New York, USA
Processing request.
|
Illinois, USA
Processing request.
|
Brussels, Belgium
Processing request.
|
Seoul, Korea
Processing request.
|
California, USA
Processing request.
|
If you have any problems downloading this paper,
please click on another Download Location above, or
File name: SSRN-id1833564. ; Size: 619K
|
|
Can Book-Tax Differences Capture Earnings Management and Tax Management? Empirical Evidence from China
Tanya Y. H. Tang
The University of British Columbia - Faculty of Management
Michael Firth
Lingnan University - Department of Accounting and Finance
September 18, 2010
The International Journal of Accounting, Forthcoming
Abstract:
This study investigates whether and how book-tax differences (BTDs) are related to earnings management, tax management, and their interactions in Chinese listed companies. Using unique tax-effect BTDs obtained from Chinese B-share listed firms, we find that firms with strong incentives for earnings and tax management exhibit high levels of abnormal BTDs. This suggests that BTDs can be used to capture both accounting and tax manipulations induced by managerial motivations. Our results indicate that earnings management explains 7.4% of abnormal BTDs, tax management accounts for 27.8% of abnormal BTDs, and their interaction explains 3.2% of abnormal BTDs. Tax-effect BTDs are more powerful than income-effect BTDs in capturing opportunistic reporting at both conceptual and empirical levels.
Number of Pages in PDF File: 49
Keywords: Book-Tax Differences, Earnings Management, Tax Management, China
JEL Classification: M41, H29
Accepted Paper Series
Download This Paper
Date posted: September 19, 2010
; Last revised: May 30, 2011
Suggested CitationTang, Tanya Y. H. and Firth, Michael, Can Book-Tax Differences Capture Earnings Management and Tax Management? Empirical Evidence from China (September 18, 2010). The International Journal of Accounting, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1679190
|
| Feedback to SSRN (Beta) |
|
|
People who downloaded this paper also downloaded:
1.
Tax Avoidance, Large Positive Book-Tax Differences and Earnings Persistence
By
Bradley Blaylock,
Terry Shevlin, ...
2.
Interpreting the Book-Tax Income Gap as Earnings Management or Tax Sheltering
By
Jeri Seidman
3.
Earnings Persistence and Stock Market Reactions to the Different Information in Book-Tax Differences: Evidence from China
By
Tanya Tang
and
Michael Firth
4.
Book-Tax Differences and Earnings Growth
By
Mark Jackson
5.
Does Tax Aggressiveness Reduce Corporate Transparency?
By
Karthik Balakrishnan,
Jennifer Blouin, ...
6.
The Persistence and Pricing of Earnings, Accruals, and Cash Flows When Firms Have Large Book-Tax Differences
By
Michelle Hanlon
7.
Book-Tax Differences, Uncertainty about Fundamentals and Information Quality, and Cost of Capital
By
Dan S. Dhaliwal,
Robert Huber, ...
8.
Did FIN 48 Limit the Use of Tax Reserves as a Tool for Earnings Management?
By
Richard Cazier,
Sonja Rego, ...
9.
The Effect of Tax Authority Monitoring and Enforcement on Financial Reporting Quality
By
Michelle Hanlon,
Jeffrey Hoopes, ...
10.
The Effects of Executives on Corporate Tax Avoidance
By
Scott Dyreng,
Michelle Hanlon, ...
|
|
|
|
