Accounting for Income Taxes: Primer, Extant Research, and Future Directions

Graham, John R.; Raedy, Jana Smith; Shackelford, Douglas A.

doi:10.1561/0500000042

Cited by 6 publications

(3 citation statements)

References 123 publications

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“…Tax Base Avoidance Time Trend Results Related to Multinational and Domestic-Only Firms: First, a visual inspection of Figure 5 indicates that BTD ASTR values are more volatile than ASTR values. This volatility is consistent with the notion that book-tax differences change across time in a cyclical pattern (e.g., Plesko, 2002;Mills et al, 2002) and are affected by economy-wide changes (Gaertner et al, 2016;Graham, 2012). Second, almost all BTD ASTR values for multinational firms are below the BTD ASTR values for domestic-only firms, and the intercepts in Panel B of Table 5 differ significantly.…”

Section: Examination Of the Time Trends Of Astr And Btd Astrsupporting

confidence: 85%

Measuring corporate tax rate and tax base avoidance of U.S. Domestic and U.S. multinational firms

Lampenius

Shevlin

Stenzel

2021

Journal of Accounting and Economics

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We develop an approach based on publicly available data to decompose and quantify tax avoidance into two separate components: tax rate avoidance and tax base avoidance. Our measures are based on the average statutory tax rate, which accounts for the statutory tax rates across all transactions of a firm. We illustrate and validate our measures using simulation data, the Tax Reform Act of 1986, the Tax Cuts and Jobs Act of 2017, changes in tax rate avoidance and tax base avoidance across time, bonus depreciation time periods, several sample splits of U.S. multinational and domestic firms, differences across industries, and firms operating in tax haven locations. The measures allow regulators and researchers to gain insights into these two conceptually different tax avoidance strategies.

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Section: Examination Of the Time Trends Of Astr And Btd Astrsupporting

confidence: 85%

Measuring corporate tax rate and tax base avoidance of U.S. Domestic and U.S. multinational firms

Lampenius

Shevlin

Stenzel

2021

Journal of Accounting and Economics

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“…To test the second hypothesis we will extend the previous model through adding auditor opinion (A_Opinion it ) and it interaction with BTDs it : Some previous studies emphasise the importance of examining the BTDs types when exploring the implications of BTDs, they confirm that results may varied according to BTDs types (Hanlon and Heitzman 2010;Graham et al 2012). Accordingly, we will examine the effect of TBTDs and PBTDs on firm valuedepending on the following model:…”

Section: Empirical Modelsmentioning

confidence: 99%

Does Qualified Auditor Opinion Moderate the Relationship between Book-Tax Differences and Firm Value? Evidence from Egypt

عیسى¹,

Abdelrhman²

2021

مجلة المحاسبة والمراجعه لاتحاد الجامعات العربیه

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Purpose:This paper aims to examine the effect of qualified auditor opinion on the relationship between Book-Tax Differences (BTDs) and firm value in Egypt.Design/methodology/approach:We investigate a sample of the Egyptian firms listed on the EGX100 index; during the period of 2014-2018. The final sample was 335 firm-year observations. The data was analysed using OLS regression. Findings:The results show a significant negative relationship between BTDs and firm value. We also find a significant moderating role to the qualified auditor opinion on the said relationship, as we find that the negative relationship occurs only in firms with qualified audit opinion.Originality/value:To the best of authors' knowledge, this is the first study that examines the moderating role of qualified auditor opinion on the relationship between BTDs and firm value in Egypt. The results confirm the growing concern of investors about the BTDs for the firms with qualified auditor opinion. Therefore, our results may be interesting to managers, researchers, investors, auditors, and regulators, who care of the potential implications of BTDs when coincide with qualified auditor report .

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“…In other words, this study investigates whether a greater percent of investors are becoming informed. 2 In particular, it can be difficult for investors to piece together a firm's particular tax circumstances, strategies, and risks from only the financial statements and other commonly public information sources (Hanlon 2003;McGill and Outslay 2004;Graham, Raedy, and Shackelford 2012).…”

Section: Does Tax Return Disclosure Affect Information Asymmetry Among Investors? 1 Introductionmentioning

confidence: 99%

Does tax return disclosure affect information asymmetry among investors?

2021

SSRN Journal

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Tax return information is often complex and difficult to interpret. Whether its public availability benefits unsophisticated users remains an empirical question. This study examines whether public disclosure of tax return information affects information asymmetry among more-and less-sophisticated investors. I investigate the unique setting of mandatory disclosure of three bottom-line income tax items in Australia. Using a difference-in-difference design with an entropy-balanced control group, I find evidence that information asymmetry decreased after the mandatory disclosure. The effect is more pronounced for firms with a poorer information environment, with higher individual ownership, and with lower media attention. The magnitude of the postdisclosure decline in the bid-ask spread correlates with the degree of the absolute book-tax gap of tax expense. This result is concentrated among firms with only mandatory disclosure-without any voluntary commitment or voluntary disclosure. Overall, the results suggest that public disclosure of tax return information does have the potential to reduce information asymmetry among investors.

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Accounting for Income Taxes: Primer, Extant Research, and Future Directions

Cited by 6 publications

References 123 publications

Measuring corporate tax rate and tax base avoidance of U.S. Domestic and U.S. multinational firms

Measuring corporate tax rate and tax base avoidance of U.S. Domestic and U.S. multinational firms

Does Qualified Auditor Opinion Moderate the Relationship between Book-Tax Differences and Firm Value? Evidence from Egypt

Does tax return disclosure affect information asymmetry among investors?

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