The Financial and Tax Reporting of Firms in Financial Transitory Loss Years

50 Pages Posted: 18 Jul 2012  

Richard Wayne Ray

Oklahoma State University - Stillwater - School of Accounting

Date Written: July 2012

Abstract

I find evidence to indicate firms in a financial transitory loss year not only engage in financial reporting aggression by taking a financial bath but also simultaneously engage in tax reporting aggression by taking a tax dive. Further, I find a significantly positive association between taking a “financial bath” and a “tax dive” for firms in a financial transitory loss year. Conversely, I find evidence to suggest firms in a financial persistent loss year will neither take a bath nor a tax dive suggesting that financial reporting aggression and tax reporting aggression varies among loss firms conditioning on the probability of loss reversal.

Suggested Citation

Ray, Richard Wayne, The Financial and Tax Reporting of Firms in Financial Transitory Loss Years (July 2012). Available at SSRN: https://ssrn.com/abstract=2103160 or http://dx.doi.org/10.2139/ssrn.2103160

Richard Wayne Ray (Contact Author)

Oklahoma State University - Stillwater - School of Accounting ( email )

College of Business Administration
345 Business Building
Stillwater, OK 74078
United States

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