Financial Accounting Effects of Tax Aggressiveness: Contracting and Measurement
46 Pages Posted: 25 Oct 2010 Last revised: 17 Apr 2013
Date Written: April 2, 2013
Abstract
This study examines a setting in which a tax reporting decision is delegated to a firm's tax manager. Using financial accounting measures of tax expense to evaluate the tax manager allows the fi rm to efficiently attain the level of tax avoidance it prefers, despite the fact that the consequences of the tax reporting decision will occur in the future. The study also examines how well two accounting measures of tax aggressiveness -- cash taxes paid and the unrecognized tax bene fit -- distinguish between conservative and aggressive fi rms.
Keywords: FIN 48, tax reporting, contracting, unrecognized tax benefits, book income tax expense
JEL Classification: H25, M41
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Earnings Management: New Evidence Based on Deferred Tax Expense
By John D. Phillips, Morton Pincus, ...
-
An Evaluation of Alternative Measures of Corporate Tax Rates
-
By Merle Erickson, Michelle Hanlon, ...
-
The Relation between Financial and Tax Reporting Measures of Income
By Gil B. Manzon, Jr. and George Plesko
-
What Can We Infer About a Firm's Taxable Income from its Financial Statements?