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Author : Lisa Frey
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (115 download)
Download or read book Essays on Earnings Management and Tax Avoidance in Corporate Financial Reporting written by Lisa Frey and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : David Onditi
Publisher : GRIN Verlag
ISBN 13 : 3346020452
Total Pages : 9 pages
Book Rating : 4.3/5 (46 download)
Download or read book Financial Reporting on Earnings Management written by David Onditi and published by GRIN Verlag. This book was released on 2019-09-23 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essay from the year 2017 in the subject Business economics - Accounting and Taxes, grade: A, University of Nairobi, language: English, abstract: This paper discusses the motives behind earnings management and explains some of the methods used by firms to manage their earnings. Earnings management has been defined differently by a number of scholars. It is important to note that there is a thin line between fraud and earnings management. Hamid, Hashim and Salleh citing the works of Brown, Perols and Lounge and Erickson, Hanlon and Maydew noted the difference in the definitions that are offered by the scholars. According to Perols and Lounge organizations will engage in fraud due to the constraints on earnings management. The research found out that the firms that had engaged in earnings management will be more likely to be involved in cases of fraud. Brown and Erickson et al noted that the difference between earnings management and fraud is that earnings management is usually within the scope of the generally accepted accounting principles (GAAP) while fraud is outside of the boundaries of GAAP. Earnings management has been defined as the manipulation of the financial statements and reports by the managers so that the firms can earn extra profit. It has also been defined as the action where the management of the organizations apply their own self-assessment in the communication of the financial information and transactions to modify the financial data for two main reasons: 1) influencing contractual businesses that solely rely on the financial information or 2) providing the stakeholders with a wrong impression about the financial position of the firm.
Author : Dhammika Dharmapala
Publisher :
ISBN 13 :
Total Pages : 24 pages
Book Rating : 4.:/5 (129 download)
Download or read book Earnings Management, Corporate Tax Shelters, and Book-Tax Alignment written by Dhammika Dharmapala and published by . This book was released on 2009 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews recent evidence analyzing the link between earnings management and corporate tax avoidance and considers the implications for how policymakers should evaluate the financial reporting environment facing firms. A real-world tax shelter is dissected to illustrate how tax shelter products enable managers to manipulate reported earnings. A stylized example is developed that generalizes this view of corporate tax avoidance and empirical evidence consistent with this view is discussed. This view of corporate tax avoidance implies that shareholders and policymakers should question the rationale for distinct financial reports and that greater book-tax alignment may have mutually beneficial effects for investors and tax authorities.
Author : Lillian F. Mills
Publisher :
ISBN 13 :
Total Pages : 208 pages
Book Rating : 4.3/5 (91 download)
Download or read book Essays in Corporate Tax Compliance and Financial Reporting written by Lillian F. Mills and published by . This book was released on 1996 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Cesilia Mgimwa
Publisher : GRIN Verlag
ISBN 13 : 3346133834
Total Pages : 61 pages
Book Rating : 4.3/5 (461 download)
Download or read book The effect of Earnings Quality and Internal Resource on the relationship between Tax Avoidance and Firm level Investment written by Cesilia Mgimwa and published by GRIN Verlag. This book was released on 2020-03-18 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2019 in the subject Business economics - Investment and Finance, , language: English, abstract: The perception that corporate tax avoidance represents a shift of value from the government tax authority to shareholders has been questioned by recent studies that finds this perception to not be legitimate in the data. In this study, I point out the evidence of the positive relationship between tax avoidance and firm level investment so that to provide an evidence of the managers’ behavior of using savings from tax avoidance to fund firms’ investment activities. Furthermore, this study, examine the effect of earnings quality and internal resource on the relationship between tax avoidance and firm level investment. I collected data of 3085 firms from the KisValue database with accounting data for companies listed on the Korea Stock Exchange (KOSPI) from 2012 to 2017, to test the effect of earnings quality and internal resource on the relationship between tax avoidance and firm level investment. I start with year 2012 because in 2012, International Financial Reporting Standards (IFRS) adoption becomes compulsory to all listed companies in Korea. In contrast from previous research, this study looks at the relationship of tax avoidance and firm level investment from a different perspective by focusing on the effect of earnings quality and internal resource on this relationship. The evidence of this study suggests that tax avoidance is positively associated with firm level investment. In other words, when firms increase tax avoidance, the firm level investment also increases. Adding to Dobbins and Jacob (2016) and Axel and Joachim (2017) research that found lowered tax rates, induce higher investments. This study also finds the evidence that the relationship between tax avoidance and firm level investment depends on the availability of internal resource and the level of earnings quality. The relationship between tax avoidance and firm level investment is negative when the firm has greater internal resource and better earnings quality. These results suggesting that; firms with the presence of greater internal resource (i.e. internally generated cash flow) tend to rely less on tax avoidance to fund their investment than those firms with low internal resource. Similarly, firms with better earnings quality tend to rely less on tax avoidance to finance their investment than firms with poor earnings quality.
Author :
Publisher : GRIN Verlag
ISBN 13 : 3964875953
Total Pages : 81 pages
Book Rating : 4.9/5 (648 download)
Download or read book Earnings Management. The Influence of Real and Accrual-Based Earnings Management on Earnings Quality written by and published by GRIN Verlag. This book was released on 2024-01-31 with total page 81 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2019 in the subject Business economics - Accounting and Taxes, University of Duisburg-Essen, course: Master Thesis, language: English, abstract: This paper delves into various theories and approaches, aiming to define and differentiate earnings management from related concepts such as fraud, expectation management, and impression management. It explores the goals and incentives driving earnings management, including maximizing or minimizing earnings, beating targets, and smoothing. At the onset of the new millennium, corporate scandals rocked the business world, eroding trust in management, boards of directors, and the accounting profession. In response, regulations and policies aimed at enhancing corporate governance and financial reporting were swiftly implemented. The credibility, clarity, and consistency of financial reporting practices play a pivotal role in enabling investors to make informed decisions. Accurate and fair financial performance representations, as opposed to inflated and misleading figures, are essential for market players, including shareholders and creditors. Investors rely on audited financial reports to guide their investment decisions, underscoring the critical importance of accuracy and reliability in publicly available financial disclosures. Auditors, by reducing the risk of material misstatement, ensure the integrity of the information disclosed in a company's financial statements. Management, with the goal of achieving promised targets and ensuring the company's existence, may engage in earnings management as a strategic contribution to corporate policy. Financial reporting serves as a means to distinguish well-performing companies from their counterparts, facilitating efficient resource allocation and empowering stakeholders to make effective decisions. The disclosed earnings results significantly impact a firm's overall business activities and management decisions, particularly in satisfying analysts' expectations, which can influence equity value. While accounting standards play a role, the quality of financial statements is more influenced by company-specific and institutional factors shaping managers' incentives. These factors lead to financial reporting practices being viewed as the outcome of a cost-benefit assessment.
Author : Kathleen Yates
Publisher : Nova Science Publishers
ISBN 13 : 9781634855112
Total Pages : 0 pages
Book Rating : 4.8/5 (551 download)
Download or read book Earnings Management written by Kathleen Yates and published by Nova Science Publishers. This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Earnings management is an issue that directly affects the overall integrity and quality of financial reporting and to date, many studies have been conducted in an attempt to gain an understanding of whether firms are engaging in earnings management, why they do so, what are the motives that drive managers' discretionary behaviour, what are the economic consequences and whether investors can see through this behaviour? In this book, Chapter One reviews the developments and the trends in the contemporary earnings management research and discuss several possible avenues for future research. Chapter Two provides an overview of the most recent studies on earnings management in relation to the financial crisis and the institutional environment and firm characteristics. Chapter Three provides a description of the nowadays most commonly used methods for measuring earnings management in accounting and finance literature. Chapter Four examines earnings management and corporate social responsibility as an entrenchment strategy.
Author : Malek El Diri
Publisher : Springer
ISBN 13 : 9783319873718
Total Pages : 0 pages
Book Rating : 4.8/5 (737 download)
Download or read book Introduction to Earnings Management written by Malek El Diri and published by Springer. This book was released on 2018-08-18 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides researchers and scholars with a comprehensive and up-to-date analysis of earnings management theory and literature. While it raises new questions for future research, the book can be also helpful to other parties who rely on financial reporting in making decisions like regulators, policy makers, shareholders, investors, and gatekeepers e.g., auditors and analysts. The book summarizes the existing literature and provides insight into new areas of research such as the differences between earnings management, fraud, earnings quality, impression management, and expectation management; the trade-off between earnings management activities; the special measures of earnings management; and the classification of earnings management motives based on a comprehensive theoretical framework.
Author : Hong Fan
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (993 download)
Download or read book Essays in Tax and Financial Reporting written by Hong Fan and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays. The first two essays study the association between tax aggressiveness and financial reporting aggressiveness. There is an emerging debate about whether firms tradeoff between tax savings and reported earnings. Essay 1 examines this relationship in the Canadian context and finds that tax aggressiveness is negatively associated with financial reporting aggressiveness, suggesting the existence of a tradeoff. However, closely-held firms seem to be making no tradeoffs between tax savings and book income. This essay also finds that closely-held firms are more aggressive in pursuing tax savings compared to other firms. Essay 2 examines the tradeoff question in the North American context. I find that tax reporting aggressiveness is positively associated with financial reporting aggressiveness for U.S. firms (id est, U.S. firms in general do not seem to tradeoff between the tax savings and book income), while negatively associated for Canadian firms (id est, Canadian firms do seem to tradeoff between pursuit of tax savings and book income). Within the U.S. sub-sample, there is no difference in tradeoff behavior between closely-held and widely-held firms. Closely-held firms in Canada do not seem to tradeoff between book income and tax savings, thereby pursuing both tax aggressiveness and financial reporting aggressiveness simultaneously. Essay 3 focuses on financial reporting and examines the association between IFRS adoption and executive compensation. More specifically, I examine whether IFRS better reflects firms' and managers' performance. I find that accounting-based pay for performance sensitivity is stronger in the year of IFRS adoption. My results show that CFOs earned approximately more in the year of IFRS adoption. In contrast, the chief executive officer's (CEO) compensation did not change significantly in the year of IFRS adoption. I also find CF Os' bonus relative to CEO bonus increased by more than 20% in the year of IFRS adoption.
Author : Joshua Ronen
Publisher : Springer Science & Business Media
ISBN 13 : 0387257713
Total Pages : 587 pages
Book Rating : 4.3/5 (872 download)
Download or read book Earnings Management written by Joshua Ronen and published by Springer Science & Business Media. This book was released on 2008-08-06 with total page 587 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a study of earnings management, aimed at scholars and professionals in accounting, finance, economics, and law. The authors address research questions including: Why are earnings so important that firms feel compelled to manipulate them? What set of circumstances will induce earnings management? How will the interaction among management, boards of directors, investors, employees, suppliers, customers and regulators affect earnings management? How to design empirical research addressing earnings management? What are the limitations and strengths of current empirical models?
Author : Stavroula Kourdoumpalou
Publisher :
ISBN 13 :
Total Pages : 17 pages
Book Rating : 4.:/5 (13 download)
Download or read book Detecting Earnings Management written by Stavroula Kourdoumpalou and published by . This book was released on 2019 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: Earnings management research is of interest not only to academics, but also to practitioners and regulators. A major strand of the relevant literature examines the divergent reporting incentives that managers face when reporting for tax and for financial accounting purposes. In case of conforming earnings management, firms that prefer tax aggressiveness also lower their financial accounting income, whereas firms that are aggressive in financial reporting also inflate taxable income. However, there is significant evidence that firms also take advantage of the opportunity provided by the dual reporting system (i.e., preparation of distinct reports) and simultaneously manipulate both accounting and taxable earnings (i.e., non-conforming earnings management). As the extent of earnings manipulation cannot be measured directly, a number of proxies have been developed in the literature relying on publicly available data. For the purposes of the present review, the most commonly used ones are classified into three groups: accrual models, effective tax rates and book-tax differences.
Author : Ole-Kristian Hope
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (13 download)
Download or read book Tax Avoidance and Geographic Earnings Disclosure written by Ole-Kristian Hope and published by . This book was released on 2013 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study tests the relation between corporate tax avoidance and disclosure of geographic earnings for U.S. multinational companies. We find that after the adoption of Statement of Financial Accounting Standards No. 131 in 1998, firms opting to discontinue disclosure of geographic earnings in their financial reports have lower worldwide effective tax rates. These results are consistent with managers perceiving that non-disclosure of geographic earnings helps mask tax avoidance behavior. However, the relation between tax avoidance and non-disclosure reduces after implementation of Schedule M-3 in the annual corporate tax filing beginning in 2004. Schedule M-3 requires a detailed reconciliation of book income to tax income and aims to make firms' tax avoidance activities associated with shifting profits to lower-tax foreign jurisdictions more apparent to the IRS. This study contributes to our understanding of the relation between financial reporting behavior and tax reporting behavior.
Author : Tanya Y. H. Tang
Publisher :
ISBN 13 :
Total Pages : 49 pages
Book Rating : 4.:/5 (13 download)
Download or read book Does Book-Tax Conformity Deter Opportunistic Book and Tax Reporting? An International Analysis written by Tanya Y. H. Tang and published by . This book was released on 2017 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines whether book-tax conformity (i.e., reducing the gap between financial and taxable incomes) can restrain managers from opportunistically reporting financial profits and taxable income. Empirical work on this relation so far is limited and provides contradictory results. Using publicly available financial statements from 1994 to 2007 for 16,739 firms across 32 countries, I construct a new proxy for mandatory conformity and document that high book-tax conformity is associated with lower levels of earnings management and tax avoidance. These results persist even after controlling for firm characteristics and institutional factors, such as legal enforcement, investor protection, legal systems, capital market development, and the adoption of International Financial Reporting Standards (IFRS). Additional tests reveal that the deterrent effect of conformity on earnings management is more pronounced in code-law countries but does not differ between IFRS and non-IFRS adopters, and between developed and developing capital markets.
Author : Peter Ising
Publisher : Springer Gabler
ISBN 13 : 9783658040963
Total Pages : 240 pages
Book Rating : 4.0/5 (49 download)
Download or read book Earnings Accruals and Real Activities Management around Initial Public Offerings written by Peter Ising and published by Springer Gabler. This book was released on 2014-04-30 with total page 240 pages. Available in PDF, EPUB and Kindle. Book excerpt: The beginning of the new millennium was characterized by company scandals in accounting around the world. A transparent and fair presentation of financial statements is beneficial for capital market participants. Especially around initial public offerings different incentives of these players exist to influence financial statements in diverse aspects. Therefore, studies of earnings management try to identify abnormal behavior. This thesis covers additional aspects to shed light on substantial drivers of discretionary reporting behavior around going public. Factors like influence on real activities, industry affiliation, and specific years in the IPO process add further insight to this theoretical and practical topic. The dependence on these factors is high and confirm that company specifics are important for interpretation of results.
Author : Bradley S. Blaylock
Publisher :
ISBN 13 :
Total Pages : 49 pages
Book Rating : 4.:/5 (13 download)
Download or read book The Association Between Book-Tax Conformity and Earnings Management written by Bradley S. Blaylock and published by . This book was released on 2014 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is an on-going debate in the literature about the costs and benefits of conforming book and taxable income. Proponents argue that increased book-tax conformity will reduce aggressive financial reporting because managing earnings up increases taxes and will curtail abusive tax shelters because managing taxes down decreases earnings reported to shareholders. We use a panel of 139,536 firm-year observations across 34 countries over the period 1996-2007 to test whether high levels of book-tax conformity are associated with less earnings management and find that higher book-tax conformity is associated with significantly more, not less earnings management. We conclude that one of the primary claimed benefits of increasing book-tax conformity, more truthful financial reporting with less earnings management, is unlikely to be as large as previously thought.
Author : Lulus Kurniasih
Publisher :
ISBN 13 :
Total Pages : 8 pages
Book Rating : 4.:/5 (13 download)
Download or read book Earnings Management, Corporate Governance and Tax Avoidance written by Lulus Kurniasih and published by . This book was released on 2018 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: Objective - This study aims to determine the effect of earning management and corporate governance mechanisms on corporate tax avoidance.Methodology/Technique - Corporate governance mechanisms use institutional ownership, the size of the board of commissioners, the percentage of independent commissioners, auditing committees, and audit quality as proxies. Meanwhile, earnings management uses the modified Jones model. The sample of this study include non-financial companies that are listed on the Indonesian Stock Exchange (IDX) between 2014 and 2016.Findings - Corporate tax avoidance can be detected by using the effective tax rate (ETR), which is the ratio of income to tax expenses. This sample was chosen using a purposive sampling method, resulting in 871 firms. The results suggest that earnings management has a significant impact on ETR.Novelty - This study identifies that only independent commissioners and audit quality have a significant influence on ETR.
Author : Michael Firth
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)
Download or read book Earnings Management Choices in Response to Tax Rate Increases written by Michael Firth and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the underexplored issue of whether and how firms manage their earnings when tax rates increase. We hypothesize and find that firms generally choose to manage their taxable income upward in a book-tax non-conforming manner rather than in a book-tax conforming manner before a tax rate increment, which in turn reduces the book-tax difference as well as the detection risk of earnings management. These results suggest that firms give more weight to tax incentives and tax audit or regulatory inspection risks than to boosting financial reporting income in tax management. However, when firms have higher earnings management incentives or lower tunneling incentives (i.e., non-state-owned enterprises), we find that they manage their taxable income and book income upward together (i.e., in a book-tax conforming manner), whereas their counterparts (i.e., state-owned enterprises) do not. Overall, our paper contributes to the literature by demonstrating the interplay of tax, tunneling and earnings management incentives in influencing tax management strategies.
