Abstract

http://ssrn.com/abstract=1950378
 
 

References (71)



 
 

Citations (1)



 


 



Sustainable Tax Strategies and Earnings Persistence


Sean T. McGuire


Texas A&M University - Department of Accounting

Stevanie S. Neuman


University of Missouri at Columbia - School of Accountancy

Thomas C. Omer


University of Nebraska at Lincoln - School of Accountancy

October 22, 2013


Abstract:     
This study examines whether the sustainability of a firm’s tax strategy provides information about the persistence of a firm’s pre-tax earnings and earnings components. We also investigate whether investors are able to determine the sustainability of a firm’s tax strategy and use it as a signal to correctly price the persistence of a firm’s pre-tax earnings and earnings components. Sustainability is an additional dimension of a firm’s tax strategy that focuses on maintaining consistent tax avoidance outcomes over time. Consistent with the sustainability of a firm’s tax strategy providing unique information about earnings persistence and reflecting managers’ expectations of future earnings, we find that firms with more sustainable tax strategies exhibit more persistent pre-tax earnings and earnings components. We also find that investors are able to infer the sustainability of a firm’s tax strategy and use it as a signal to assess the persistence of pre-tax earnings and earnings components.

Number of Pages in PDF File: 54

Keywords: sustainable tax strategies, earnings persistence, earnings expectations

JEL Classification: M40, M41, M49

working papers series


Download This Paper

Date posted: October 28, 2011 ; Last revised: November 1, 2013

Suggested Citation

McGuire, Sean T. and Neuman, Stevanie S. and Omer, Thomas C., Sustainable Tax Strategies and Earnings Persistence (October 22, 2013). Available at SSRN: http://ssrn.com/abstract=1950378 or http://dx.doi.org/10.2139/ssrn.1950378

Contact Information

Sean T. McGuire
Texas A&M University - Department of Accounting ( email )
430 Wehner
College Station, TX 77843-4353
United States
Stevanie S. Neuman (Contact Author)
University of Missouri at Columbia - School of Accountancy ( email )
College of Business
Columbia, MO 65211
United States
Thomas C. Omer
University of Nebraska at Lincoln - School of Accountancy ( email )
307 College of Business Administration
Lincoln, NE 68588-0488
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,061
Downloads: 338
Download Rank: 48,842
References:  71
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 1.188 seconds