The Value Relevance of Book-Tax Differences - An Empirical Study in China's Capital Market

Tang, Tanya Y. H.

doi:10.2139/ssrn.897120

Cited by 16 publications

(46 citation statements)

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“…Within the quality indicators of company results, value relevance, persistence of results, conditional conservatism and income smoothing are proxies that are able to show the reasons for the emergence of BTDs (Nakao, 2012). When companies report higher levels of BTDs, they have less persistent financial results (Hanlon, 2005;Tang, 2006), which justifies the fact that BTDs contribute to investor uncertainty regarding company accounting numbers.…”

Section: Book-tax Differencesmentioning

confidence: 99%

“…Thus, information contained in the differences between accounting income and taxable income is considered relevant if it assists investors in forecasting future results. This is possible since such differences not only provide information on transitory components of profit, but also on the predictability of future results and on company cash flow, that is, regarding the quality of profits (Hanlon, 2005;Tang, 2006). As these are some of the features of companies affected by BTDs, observing them may assist economic agents with regards to company evaluations (Hanlon, 2005).…”

Section: Relevance Of Informational Content Of Accounting Numbersmentioning

confidence: 99%

“…Furthermore, it aims to build upon previous studies (Hanlon, 2005;Tang, 2006, The information gathered in the differences between accounting income and taxable income -known as book-tax differences (BTDs) -can be useful for investors, analysts and creditors to forecast companies' future results (Lev & Nissim 2004;Hanlon, 2005;Tang, 2006). This usefulness can be explained by the fact that BTDs are able to provide additional information about the transitory components of companies' current profits and of future cash flow.…”

Section: Introduction Types Of Btds Can Have Different Usefulness Formentioning

confidence: 99%

“…Generally, the greater the differences between accounting income and taxable income, the lower the estimates for future results (Tang, 2006). This negative relationship is justified by the fact that higher levels of BTDs mean that current profits are more transitory and less persistent, signaling poorer performance in following years (Tang, 2006).…”

Section: Introduction Types Of Btds Can Have Different Usefulness Formentioning

confidence: 99%

“…In many jurisdictions, the information captured in BTDs is more relevant than the value of reported profit itself (Tang, 2006). The importance attributed to the differences between accounting income and taxable income can be explained by the fact that they offer information about the quality of profits reported, such as persistence, management aggressiveness, value relevance, and accounting conservatism (Hanlon, 2005;Heltzer, 2009;Blaylock, Shevlin, & Wilson, 2012).…”

Section: Introduction Types Of Btds Can Have Different Usefulness Formentioning

confidence: 99%

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The Relevance of the Informational Content of Book-Tax Differences for Predicting Future Income: Evidence from Latin American Countries

Marques

Costa

Rogers

2016

Rev. contab. finanç.

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This study aims to investigate whether the different types of book-tax differences are useful for predicting the future income of publicly traded companies in five Latin American countries. This is possible since these differences convey information about transitory components of income, which can be used by investors for predicting future income. However, little is known about the relationship between tax variables and companies' future results. The sample analyzed here is composed of 580 publicly traded companies from five Latin American countries (Argentina, Brazil, Chile, Mexico, and Peru) with information available in the Economatica® database covering 2002 to 2013. In terms of methodology, regressions are employed in order to find a connection between the different types (total, permanent, temporary, and the negative and positive variations) of book-tax differences and companies' current and future earnings per share, as well as some control variables suggested by previous literature. The model's coefficients were estimated through panel data techniques: fixed effects. The results obtained suggest that the information gathered in the different types of book-tax differences (total, permanent, temporary, positive and negative variations) is relevant in predicting future income. Total, permanent and temporary differences contribute to the uncertainty in future income prediction, given that results are more transitory and less persistent in years with higher book-tax differences. Positive and negative variations, on the other hand, attribute higher income in coming years to greater variations in book-tax differences, representing increased timeliness of results and a reduction in off balance sheet funding for the publicly traded companies from these countries.

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Section: Book-tax Differencesmentioning

confidence: 99%

Section: Relevance Of Informational Content Of Accounting Numbersmentioning

confidence: 99%

Section: Introduction Types Of Btds Can Have Different Usefulness Formentioning

confidence: 99%

Section: Introduction Types Of Btds Can Have Different Usefulness Formentioning

confidence: 99%

Section: Introduction Types Of Btds Can Have Different Usefulness Formentioning

confidence: 99%

See 3 more Smart Citations

The Relevance of the Informational Content of Book-Tax Differences for Predicting Future Income: Evidence from Latin American Countries

Marques

Costa

Rogers

2016

Rev. contab. finanç.

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Corrupção dos países e book-tax differences anormal: uma análise multinível

2022

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Esta pesquisa se propôs a investigar se a corrupção percebida, característica do ambiente institucional dos países, apresenta relação com a book-tax differences anomal (BTDA) das companhias abertas. A amostra contempla 170.543 observações, pertencentes a 99 países no período de 2012 a 2018, que foram analisadas por meio de modelagem multinível. A hipótese de pesquisa, que aborda a associação positiva entre a BTDA e a corrupção percebida dos países, não foi rejeitada para a amostra total e para o grupo de países adotantes das International Financial Reporting Standards (IFRS). Isso sugere que para o grupo de adotantes das IFRS, a maior flexibilidade resultante da internacionalização das normas é utilizada oportunisticamente pelos gestores, que possivelmente são influenciados pela baixa qualidade do ambiente institucional em termos de corrupção. Os achados corroboram a premissa de que a baixa qualidade dos lucros das companhias está associada a maior corrupção percebida dos países. A pesquisa contribui com a literatura por trazer novas perspectivas sobre como o ambiente de negócios é afetado pelas características dos países, considerando a utilização da modelagem multinível, técnica mais acurada para amostras com estruturas agrupadas.

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Honorários de auditoria e Book-Tax Differences

Silva

Costa

Fávero

2018

Rev. contab. organ.

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Differences between book and taxable income, internationally denominated BookTax Differences (BTD), can affect auditor's risks and efforts, raising audit fees. Thus, this article aims research is to verify if there is a relationship between the BTD types and the audit fees that were paid by the Brazilian public companies in the periodA diferença entre o lucro contábil e o lucro tributável aumenta o risco de perdas financeiras e de reputação da auditoria, e seus honorários. A diferença entre estes dois lucros, conhecida como Book-Tax Differences (BTD), é uma 'bandeira vermelha' para analistas, gestores e governo, de possível gerenciamento de resultados e evasão fiscal. J. R. M. S. Ávila; L. P. L. Fávero / Rev. Cont Org 31 (2017) 32-46 32 O subjetivismo responsável e as escolhas contábeis inerentes à adoção das International Financial Reporting Standards (IFRS) podem estar relacionados com o gerenciamento de resultado contábil e o fiscal, o que pode afetar os valores da BTD (Barth, Landsman & Lang, 2008. O comportamento oportunístico degrada a qualidade da informação contábil (Iudícibus, Martins & Carvalho, 2005) e aumenta o risco e a complexidade percebidos pelo auditor, que tenderá a refletir esses aspectos na precificação da prestação de seus serviços (Heltzer & Shelton, 2011). Nesse contexto, verificaram que valores extremos de BTD podem indicar discricionariedade do gestor para maximização do lucro, o que influencia o risco percebido pelo auditor acerca da qualidade do lucro e da determinação dos honorários. Implicações práticasA possibilidade de a BTD ser oriunda de escolhas contábeis discricionárias dos gestores e, de algum modo, afetar a qualidade da informação, pode fazer com que os auditores considerem maiores esforços, riscos e complexidade na execução das atividades, afetando o planejamento dos trabalhos a serem realizados (Hribar, Kravet & Wilson, 2014). Os impactos no planejamento podem ser traduzidos pela dedicação de mais horas de trabalho (ou elevação do custo da hora), pela contratação de profissionais mais especializados e pela aplicação de testes de auditoria mais robustos (Bedard & Johnstone, 2004), fatores esses que podem onerar a precificação desse serviço.Diante desse contexto, o artigo discute a relação entre os tipos de BTD e os honorários de auditoria pagos pelas companhias abertas brasileiras, portanto, em um país de origem civil law. O histórico de maior vinculação entre normas fiscais e societária e menor BTD no caso brasileiro pode ter mudado após a adoção das IFRS (Iudícibus et al., 2005. Contudo, Jeanjean e Stolowy (2008) asseveram que a adoção das IFRS nos países de origem civil law impulsionou a prática do gerenciamento de resultados. Klann e Beuren (2011) identificaram que houve redução nos níveis de gerenciamento de resultados em empresas inglesas com a adoção das IFRS e aumento nas empresas brasileiras após essa adoção. Portanto, a expectativa é de que a adoção das IFRS em países civil law, como o Brasil, tenha influenciado a percepção dos auditores sobre a BTD nas info...

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The Value Relevance of Book-Tax Differences - An Empirical Study in China's Capital Market

Cited by 16 publications

References 0 publications

The Relevance of the Informational Content of Book-Tax Differences for Predicting Future Income: Evidence from Latin American Countries

The Relevance of the Informational Content of Book-Tax Differences for Predicting Future Income: Evidence from Latin American Countries

Corrupção dos países e book-tax differences anormal: uma análise multinível

Honorários de auditoria e Book-Tax Differences

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