scholarly journals Anticipated Reductions in Tax Rates and Earning Management of Listed Companies: Evidence from China

2021 ◽  
Vol 2021 ◽  
pp. 1-6
Author(s):  
Mo Bai ◽  
Dandan Song ◽  
Helin Li
Keyword(s):  
Earnings Management ◽  
Listed Companies ◽  
Earning Management ◽  
Chinese Stock Market ◽  
Tax Rates ◽  
Tax Rate ◽  
Tax Reduction ◽  
Net Profit ◽  
Rate Period ◽  
Different Types

The effects of tax rate changes on corporations’ earning management are not fully understood. As a transitional economy, China has listed companies with different ownership and special regulatory rules. We explore under the expectation of tax reduction whether there are differences in the way and degree of earnings management implemented by different types of companies. Our study shows that firms under the anticipation of tax reduction make use of earning management, including delaying sales, taking unusual income-decreasing discretionary accruals, and so on, which leads to lower income in higher tax rate period. We find that private enterprises have more attention to reduce earning in the higher tax rate period than state-owned enterprises (SOEs), indicating that the ownership has effect on the extent of earning management. Moreover, under the specific regulations in Chinese stock market, we find that for those listed companies with negative net profit in the previous year, the priority is how to reverse losses rather than tax saving.

scholarly journals PERILAKU EARNINGS MANAGEMENT DI SEKITAR PERUBAHAN TARIF PAJAK TAHUN 2008

2016 ◽  
Vol 1 (1) ◽  
Author(s):  
Suyanto Suyanto
Keyword(s):  
Earnings Management ◽  
Income Tax ◽  
Stock Exchange ◽  
Discretionary Accruals ◽  
Earning Management ◽  
Fiscal Year ◽  
Tax Rates ◽  
Tax Rate ◽  
Before And After ◽  
Tax Changes

This study aims to test the level of earning management before and after the income tax rate reduction for 2008 fiscal year. The samples were 21 banking companies listed in Indonesia Stock Exchange, which has provides loans to SMEs. The analysis using paired samplest-test to test these differences of earning management before and after the income tax rates changes. The results showed that earning management in the high tax rate was higher than in the lower tax rate. This shows that management has responded the income tax rates changes to take the opportunity. Keywords: discretionary accruals, earnings management, corporate income tax changes.

scholarly journals PENGARUH PENGHINDARAN PAJAK TERHADAP BIAYA HUTANG PASCA PERUBAHAN TARIF PAJAK BADAN PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA

2016 ◽  
Vol 3 (2) ◽  
pp. 113
Author(s):  
Nining Purwanti
Keyword(s):  
Panel Data Analysis ◽  
Tax Avoidance ◽  
Negative Influence ◽  
Cost Of Debt ◽  
Tax Rates ◽  
Rate Reduction ◽  
Tax Rate ◽  
Study Find ◽  
Tax Reduction ◽  
The Cost

The aim of the research is to analyze tax avoidance behavior to cost of debt moderated by tax rates changes, on manufacturing company in Indonesia in 2008-2010. Panel data analysis is used in this research. In this study usingbook tax gap to measure tax avoidance and using the models used by Lim (2010), Dwi Martani (2011) and Widya Sartika (2012) to meansure cost of debt. The study find that tax avoidance has negative influence on cost of debt. Tax avoidance creates a risk thereby increasing the cost of debt. In the period before tax rate reduction the influence of tax avoidance on cost of debt smaller compare after period of tax reduction, this indicates the presence of earning management conducted by the company before tax rate reduction.

scholarly journals Earnings Management, Effective Tax Rate (ETR) and Book-Tax Gap (BTG)

2018 ◽  
Vol 3 (1) ◽  
pp. 33-43
Author(s):  
Jasrial Jasrial ◽  
Susy Puspitasari ◽  
Ali Muktiyanto
Keyword(s):  
Earnings Management ◽  
Behavior Management ◽  
Banking Sector ◽  
Capital Intensity ◽  
Jel Classification ◽  
Tax Rates ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Tax Gap

Objective - This research examines the effect of company size, changes in out-cash flow, return on assets, conservatism, and profit levelling on earnings management. Methodology/Technique - The results of this research show that banking capital structure, capital intensity, intensity of inventory, and intensity of R & D have a significant impact on effective tax rates. Further, the results also show that, with respect to the non-banking sector, R & D expenditure contributes significantly to effective tax rates. Simultaneously, earnings management and effective tax rates, as well as other factors, also have an effect on book tax gap. Findings - This study shows that profit management has a significantly positive effect on book tax gap, and effective tax rates has a significant negative effects o book tax gap. In terms of the non-banking sector, earnings management and effective tax rate have no effect on book tax gap. Deferred tax expenses have a lower capability to detect earnings management than accrual, in both the banking and non-banking sector. Novelty - The study of management capabilities optimizes the role of book tax gap and effective tax rate for earning management. Both tax management and earnings management are closely related to behavior management in managing a company based on the agency theory. Furthermore, the study identifies a relationship between earnings management and book tax gap. Type of Paper: Empirical Keywords: Book Tax Gap; Effective Tax Rate; Earnings Management; Accrual Total; Indonesia. JEL Classification: H26, H29.

Bias in Quarterly Estimates of Annual Effective Tax Rates and Earnings Management

2012 ◽  
Vol 34 (1) ◽  
pp. 31-53 ◽  
Author(s):  
Joseph Comprix ◽  
Lillian F. Mills ◽  
Andrew P. Schmidt
Keyword(s):  
Earnings Management ◽  
Earnings Forecast ◽  
Tax Rates ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Sarbanes Oxley ◽  
Jel Classifications

ABSTRACT We investigate whether quarterly annual effective tax rate (ETR) estimates are systematically biased in comparison to year-end actual ETRs. We find that estimated annual ETRs in the first, second, and third quarters are systematically higher than year-end ETRs. We then investigate whether firms' overstatement of quarterly ETRs creates slack that is used for earnings management. We find that quarterly ETR increases are more likely to be reversed in subsequent quarters when firms would have missed their analysts' earnings forecast absent the reversal. Finally, we show that in the years subsequent to the passage of the Sarbanes-Oxley Act (SOX), changes in the ETR continue to be associated with earnings management. These results, documenting patterns of annual ETR estimates and revisions, contribute to research about how earnings management is accomplished. JEL Classifications: H25; M41.

scholarly journals The Empirical Research on the Correlation Between the Internal Control and Earning Management in Private Listed Companies

2021 ◽  
Vol 292 ◽  
pp. 02035
Author(s):  
Sheng-Nan Yan
Keyword(s):  
Control System ◽  
Earnings Management ◽  
Negative Correlation ◽  
Internal Control ◽  
Significant Negative Correlation ◽  
Listed Companies ◽  
Real Earnings Management ◽  
Earning Management ◽  
Internal Control System ◽  
Accrued Earnings

Under the background of industrial innovation, this paper takes the data of private listed companies from 2011 to 2016 as the sample for empirical analysis, and finds that internal control is an important factor in earnings management. There is a significant negative correlation between internal control and accrued earnings management and real earnings management. That is to say, having a good and rigorous internal control system can effectively reduce earnings management. Moreover, compared with earnings management of accounting selective activities, internal control has more restrictive effect on earnings management of real activities.

Earnings Management Types and Motivation: A Study in Taiwan

2010 ◽  
Vol 38 (7) ◽  
pp. 955-962 ◽  
Author(s):  
Ming-Chia Chen ◽  
Yuan-Cheng Tsai
Keyword(s):  
Cluster Analysis ◽  
Earnings Management ◽  
Earning Management ◽  
Management Behavior ◽  
Real Activity ◽  
Altruistic Motivation ◽  
Production Distribution ◽  
Different Types ◽  
Manipulation Model ◽  
Management Behaviors

A real activity manipulation model was applied to analyze the earning management behaviors of companies. Cluster analysis was conducted to explore types of earnings management behavior and the relationships were examined between different types of earnings management and motivation. Results indicate that production/distribution manipulation is driven principally by speculative motivations, while accrued item manipulation is driven principally by altruistic motivation and by pressure from affiliated parties.

scholarly journals EARNINGS MANAGEMENT AND ITS DETERMINANT (STUDY OF LISTED COMPANIES ON INDONESIA STOCK EXCHANGE)

AKUNTABILITAS ◽  
2021 ◽  
Vol 15 (1) ◽  
pp. 89-102
Author(s):  
Ruth Samantha Hamzah ◽  
Efva Octavina Donata Gozali ◽  
Nur Khamisah
Keyword(s):  
Decision Making ◽  
Earnings Management ◽  
Firm Size ◽  
Management Practices ◽  
Stock Exchange ◽  
Listed Companies ◽  
Earning Management ◽  
Decision Making Process ◽  
Analysis Method ◽  
Independent Variables

The study aims to identify the determinant factors that affecting earning management practices of companies. We used firm size, age, leverage (DER) and profitability (ROA) as independent variables in term of earnings management detection. There were 344 listed companies in Indonesian Stock Exchange at the year of 2017 and 2018, thus there were 688 observed companies as samples. Purposive sampling and multiple regression were employed as sampling and analysis method, respectively. The results show that firm size, age and ROA have a significant effect toward earnings management, whilst DER has no significant effect towards earning management. In addition, earnings management detection provides information to investors and potential investors in decision making process.

scholarly journals ARE CORPORATE SOCIAL RESPONSIBILITY ACTIVE FIRMS LESS INVOLVED IN EARNINGS MANAGEMENT? EMPIRICAL EVIDENCE FROM CHINA

2021 ◽  
Vol 22 (2) ◽  
pp. 504-516
Author(s):  
Oleh Pasko ◽  
Fuli Chen ◽  
Nelia Proskurina ◽  
Rong Mao ◽  
Viktoriia Gryn ◽  
...  
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Earnings Management ◽  
Financial Reporting ◽  
Listed Companies ◽  
Discretionary Accruals ◽  
Earning Management ◽  
Significant Positive Association ◽  
Chinese Listed Companies ◽  
Corporate Social

This paper investigates whether corporate social responsibility active (CSR active) firms operate dissimilarly from other firms in their financial reporting. Specifically, we examine whether the corporate social responsibility (CSR) attitude of a firm sways its reporting incentives, in respect of the extent of earning management. To test our predictions, we use a sample of 25,861 year-company observations, corresponding to 3538 Chinese listed companies, for the period 2009–2019. We find a significant positive association between CSR activity and earning management assessed by the level of discretionary accruals in Chinese listed companies. Moreover, we document that Chinese CSR active firms engage more in earnings management through discretionary accruals than CSR inactive firms. These findings are consistent with the opportunistic financial reporting hypothesis: advances in CSR used by managers to safeguard their position by evading scrutiny from stakeholder activists. This study contributes to the growing awareness among investors, stakeholders and researchers that we should distinguish between CSR active firms and socially responsible firms and that being the latter entail something more than just mechanically produce CSR reports.

scholarly journals The Effects of Corporate Income Tax on Corporate Capital Structure---Based on the Data of Listed Companies in China

2015 ◽  
Vol 8 (1) ◽  
pp. 166
Author(s):  
Li Wenhong ◽  
Wu Jiaqi ◽  
Hu Tianran
Keyword(s):  
Capital Structure ◽  
Income Tax ◽  
Listed Company ◽  
Listed Companies ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Main Method ◽  
Tax Rate ◽  
Corporate Capital ◽  
Corporate Capital Structure

<p>In 2008, the domestic and foreign corporate income tax systems were unified in China. Based on data of the listed companies in China from 2006 to 2012 and the established model, we find that income tax rates significantly influence the capital structure of listed companies in China, and there is a positive correlation to the asset-liability ratio. When tax rate falls, the listed company will lower financial leverage, and the main method is through increasing its owners' equity, rather than to reduce debt.</p>

Tax Rates and Tax Collections: The Basic Analytics of Khaldun-Laffer Curves

1981 ◽  
Vol 9 (4) ◽  
pp. 415-430 ◽  
Author(s):  
Roy D. Adams
Keyword(s):  
Theoretical Analysis ◽  
Supply And Demand ◽  
Income Taxes ◽  
Rate Change ◽  
Tax Rates ◽  
Tax Rate ◽  
Demand Functions ◽  
Different Types ◽  
The Subject ◽  
Empirical Issue

This article describes the relation between tax rates and tax collections for three different types of taxes: unit excises, ad valorem excises, and general income taxes. The tax rate-tax collections relationship is currently the subject of widespread discussion, but the determinants of the shape of the function have not been clearly specified. This article presents mathematical and graphical expositions of the linkage between supply and demand for taxed commodities and the tax rate-tax collections relationship. The tax collections function will often, but not always, be shaped as it is commonly drawn; its shape is uniquely determined by the underlying supply and demand functions in the taxed market. Whether a tax rate change will increase or reduce tax collections is always an empirical issue which depends on the values of items identified by the theoretical analysis in this article.

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