The Impact of Earnings Management and Tax Planning on the Information Content of Earnings

2007 ◽  
Author(s):  
Linda H. Chen ◽  
Dan S. Dhaliwal ◽  
Mark A. Trombley
Keyword(s):  
Earnings Management ◽  
Information Content ◽  
Tax Planning ◽  
The Impact

Consistency of Book-Tax Differences and the Information Content of Earnings

2012 ◽  
Vol 34 (2) ◽  
pp. 93-116 ◽  
Author(s):  
Linda H. Chen ◽  
Dan S. Dhaliwal ◽  
Mark A. Trombley
Keyword(s):  
Standard Deviation ◽  
Earnings Management ◽  
Information Content ◽  
Joint Effect ◽  
Tax Planning ◽  
Taxable Income ◽  
Incremental Effect ◽  
The Difference ◽  
Jel Classifications

ABSTRACT This paper examines the effect of tax planning and earnings management on the informativeness of book income and taxable income. We conduct two sets of tests documenting (1) the incremental effect of tax planning and earnings management on the informativeness of book and taxable income, and (2) the relation between the consistency of the book-tax difference and the informativeness of book and taxable income. The consistency of the book-tax difference depends on firm decisions regarding incremental earnings management and tax planning. Consistency of the book-tax difference is measured as the standard deviation of the discretionary component of the difference between book income and taxable income. Our results show that consistency of the book-tax difference, as a measure of the joint effect of earnings management and tax planning, is related to persistence of both book and tax income and has an incremental effect on information content of both book income and taxable income. JEL Classifications: G12; G32; H24; H25.

scholarly journals The Valuation Of Discretionary Accruals And Antitrust Merger Investigations

2011 ◽  
Vol 19 (1) ◽  
Author(s):  
Stephen D. Makar ◽  
Pervaiz Alam
Keyword(s):  
Earnings Management ◽  
Information Content ◽  
Discretionary Accruals ◽  
Managerial Discretion ◽  
Font Size ◽  
Earnings Components ◽  
Incremental Information ◽  
Management Context ◽  
Reported Earnings ◽  
The Impact

<p class="MsoBodyText" style="line-height: normal; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt; mso-bidi-font-style: italic;"><span style="font-family: Times New Roman;">This study explores the impact of managerial discretion on the information content of reported earnings.<span style="mso-spacerun: yes;">&nbsp; </span>In particular, we extend the prior research by examining the pricing of discretionary accruals for firms subject to antitrust merger investigation.<span style="mso-spacerun: yes;">&nbsp; </span>To date, the empirical evidence on managerial discretion and earnings informativeness has been limited, and the pricing of discretionary accruals in the earnings management context of antitrust merger investigations has not been examined.<span style="mso-spacerun: yes;">&nbsp; </span>We address this gap in the literature, and provide results that are consistent with our expectations. Specifically, the evidence indicates that investigated firms&rsquo; discretionary accruals are priced by the stock market, and that such earnings components have incremental information content regarding future profitability.<span style="mso-spacerun: yes;">&nbsp; </span>In contrast, as expected, the accruals of non-investigated firms are not value-relevant. </span></span></p>

scholarly journals THE IMPACT OF DEFERRED TAX EXPENSE AND TAX PLANNING TOWARD EARNINGS MANAGEMENT AND PROFITABILITY

2019 ◽  
Vol 21 (2) ◽  
pp. 215-236
Author(s):  
ROCKY ALFIAN BUNACA ◽  
NURDAYADI
Keyword(s):  
Earnings Management ◽  
Significant Influence ◽  
Stock Exchange ◽  
Tax Planning ◽  
Independent Variables ◽  
Deferred Tax ◽  
The Impact ◽  
Intervening Variables ◽  
Tax Expense

The aim of this research is to analyze the impact of Deferred Tax Expense and Tax Planning toward Earnings Management and Company’s Profitability. The sample of this research are taken from 24 companies from Consumer Goods Sector that listed in Indonesia Stock Exchange from 2013 – 2017. The variables of this research are Deferred Tax Expense and Tax Planning as Independent Variables, Earnings Management as Intervening Variable, and Company’s Profitability as Dependent Variable. This research use Path Regression Analysis to analyze the role of Intervening Variables in influence other variables. The result of this research, it is found that Deferred Tax Expense has a significant influence toward Earnings Management, but has no influence toward Company’s Profitability. Tax Planning has no significant influence to Earnings Management, but has a significant influence toward Company’s Profitability. It also found that Earnings Management as intervening variable strengthen the influence from Deferred Tax Expense toward Company’s Profitability, but weaken the influence from Tax Planning toward company’s profitability.

scholarly journals The Effect of Both Earnings Management and Tax Planning To The Value of The Company With Corporate Governance As Variable Moderating

2017 ◽  
Vol 2 (01) ◽  
pp. 1
Author(s):  
Nia Suryani ◽  
Djuminah Djuminah
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Management Practices ◽  
Negative Impact ◽  
Tax Planning ◽  
Primary Objective ◽  
Regression Coefficients ◽  
P Value ◽  
Discretionary Accrual ◽  
The Impact

<p>The primary objective of this study is to determine the impact of both earnings management and tax planning towards the value of the firm, corporate governance is measured by using score CGPI as moderating variable. This study uses purposive sampling method that generates 40 samples of company listings on the Indonesia Stock Exchange (IDX) and registered in participation Corporate Governance Perception Index (CGPI) during 2012 until 2015.</p><p><br />Based on the test result of regression analysis it showed that earnings management practices which is measured by using discretionary accrual shows regression coefficients of 2,557 with p-value of 0,015 or p-value is below 0,05, so it has negative impact to the value of the firm, then it can be concluded that the existence of earnings management can reduce the value of the firm. Tax planning activity is measured by using Cash_ETR which shows regression coefficients -0.956 with a p-value of 0,005 or p-value is below 0,05, which means it gives a negative impact to the value of the firm, so it can be concluded that the higher level of tax planning by management will have an impact on the declining value of the firm. Furthermore, corporate governance which is measured using the CGPI’s score is not a moderating variable between earnings management and value of the firm, showed by p-value of 0,090, whereas the relationships of tax planning and value of the firm can be moderated by corporate governance, showed by p-value of 0,024.</p><p><br />Keywords: CGPI’s Score, Corporate Governance, Discretionary Accrual, Earnings Management, Tax Planning, Value of the Firm</p>

scholarly journals The Impact of Deferred Tax Assets, Discretionary Accrual, Leverage, Company Size and Tax Planning Onearnings Management Practices

2016 ◽  
Vol 7 (1) ◽  
pp. 22
Author(s):  
Jacobus Widiatmoko ◽  
Ika Mayangsari
Keyword(s):  
Earnings Management ◽  
Capital Market ◽  
Management Practices ◽  
Tax Planning ◽  
Company Size ◽  
Manufacturing Companies ◽  
Purposive Sampling ◽  
Discretionary Accrual ◽  
Deferred Tax ◽  
The Impact

<p>The purpose of this study is to analyze and provide empirical evidence of the influence of deferred tax asset, discretionary accrual, leverage, company size, and tax planning on earnings management. Financial performance is an indicator that is required by company management to measure the effectiveness of company performance. This research used secondary data that was got from annual report published in www.idx.co.id and data from Indonesian Capital Market Directory (ICMD). Populations of the research are manufacturing companies listed on Indonesia Stock Exchange from 2011-2013. Samples were selected by using purposive sampling method. There are 208 observations that will examined by logistic regression analysis. The result shows that deferred tax asset has negative and not significant effect to the earnings management, discretionary accrual has negative and not significant effect to the earnings management, leverage has negative and significant effect to the earnings management, company size has positive and significant effect to the earnings management, tax planning has positive and not significant effect to the earnings management.</p><p>Tujuan penelitian ini menganalisis bukti empiris mengenai pengaruh asset pajak tangguhan, discretionary accrual, leverage, ukuran perusahaan, dan perencanaan pajak terhadap manajemen laba. Kinerja keuangan adalah indikator untuk mengukur efektivitas perusahaan. Penelitian ini menggunakan data sekunder yang diperoleh dari www.idx.co.id serta data dari Indonesian Capital Market Directory (ICMD). Populasi penelitian ini adalah perusahaan manufaktur yang terdaftar di BEI tahun 2011-2013. Sampel dipilih dengan purposive sampling. Terdapat 208 observasi yang akan diuji dengan model analisis regresi logistik. Hasil penelitian ini menunjukkan bahwa asset pajak tangguhan memiliki pengaruh negatif dan tidak signifikan terhadap praktik manajemen laba, discretionary accrual memiliki pengaruh negatif dan tidak signifikan terhadap praktik manajemen laba, leverage memiliki pengaruh negatif dan signifikan terhadap praktik manajemen laba, ukuran perusahaan memiliki pengaruh positif dan signifikan terhadap praktik manajemen laba, perencanaan pajak memiliki pengaruh positif dan tidak signifikan terhadap praktik manajemen laba.</p><p>JEL Classification: G3, G32</p>

Corporate Social Responsibility and Earnings Management: The Moderating Role of Family Ownership

2019 ◽  
Vol 12 (1) ◽  
Author(s):  
Asif Saeed ◽  
Aijaz Mustafa Hashmi ◽  
Attiya Yasmin Javid
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Earnings Management ◽  
Family Firms ◽  
Negative Impact ◽  
Stock Exchange ◽  
Least Square ◽  
Family Ownership ◽  
Corporate Social ◽  
The Impact

This study aims to explore the impact of family ownership on the relationship among corporate social responsibility (CSR) and earning management (EM) in Pakistan. Data is collected from nonfinancial listed firms on Pakistan Stock Exchange (PSE) for the period 2009-2017. Our results of pooled ordinary least square regression indicate that CSR has significant negative impact on EM. Furthermore, results also indicate that association between CSR and EM is moderated by family ownership. Family firms which perform CSR activities are less involved in EM as compare to nonfamily firms perform CSR activities. This variation in behavior of EM in family and non-family firms can possibly be explained by socioemotional wealth theory. Keywords: Corporate Social Responsibility, Earnings Management, Family Ownership

scholarly journals The impact of IFRS-based accounting standards on earnings management: evidence from Malaysia

2016 ◽  
Vol 5 (1) ◽  
pp. 1
Author(s):  
Yosra Makni Fourati ◽  
Rania Chakroun Ghorbel
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Emerging Market ◽  
Accounting Standards ◽  
Absolute Value ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Earning Quality ◽  
The Impact ◽  
Different Levels

This study aims to examine the consequences of International Financial Reporting Standards (IFRS) convergence in an emerging market. More specifically, we investigate whether the adoption of the new set of accounting standards in Malaysia is associated with lower earnings management. Using a sample of 3,340 firm-year observations across three reporting periods with different levels of IFRS adoption, we provide evidence that IFRS convergence improves earning quality. In particular, we find a significant decrease in the absolute value of discretionary acccruals in the partial IFRS-convergence period (2007-2011), whereas this effect is restrictive after the complete IFRS- implementation.

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