|
|
|
|
||||
|
||||
Tax Reporting Aggressiveness and its Relation to Aggressive Financial ReportingMary Margaret FrankUniversity of Virginia - Darden School of Business Luann J. LynchUniversity of Virginia - Darden School of Business Sonja O. RegoIndiana University - Kelley School of Business July 22, 2008 Accounting Review, Vol. 84, No. 2, 2009 Abstract: We investigate the association between aggressive tax and financial reporting and find a strong, positive relation. Our results suggest that insufficient costs exist to offset financial and tax reporting incentives, such that nonconformity between financial accounting standards and tax law allows firms to manage book income upward and taxable income downward in the same reporting period. To examine the relation between these aggressive reporting behaviors, we develop a measure of tax reporting aggressiveness that statistically detects tax shelter activity as least as well as, and often better than, other measures. In supplemental stock returns analyses, we confirm that the market overprices financial reporting aggressiveness. We also find that the market overprices tax reporting aggressiveness, but only for firms with the most aggressive financial reporting.
Number of Pages in PDF File: 49 Keywords: Tax reporting aggressiveness, tax shelters, book-tax differences, financial reporting aggressiveness, earnings management, discretionary accruals JEL Classification: M41, M49, H25 Accepted Paper SeriesDate posted: February 2, 2005 ; Last revised: March 25, 2010Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo3 in 0.953 seconds
