How Far is Too Far? The Influence of Moral Disengagement, CFO Characteristics, and Auditor Attentiveness on FIN 48 Earnings Management

2018 ◽  
Author(s):  
Ashley West
Keyword(s):  
Earnings Management ◽  
Moral Disengagement ◽  
Fin 48

scholarly journals Earnings Management through Tax Reserves and Auditor-Provided Tax Services

2017 ◽  
Vol 6 (4) ◽  
pp. 217
Author(s):  
Chunlai Ye
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Income Smoothing ◽  
Earnings Forecast ◽  
Large Firms ◽  
Fin 48 ◽  
Management Incentives ◽  
Consensus Forecasts ◽  
Earnings Smoothing ◽  
Tax Reserves

This study investigates whether firms continue to use tax reserves to achieve financial reporting objectives in the post-FIN 48 period and the effect of auditor-provided tax services on earnings management through tax reserves. Three types of earnings management incentives are considered in this study: meeting or beating the consensus forecasts, income smoothing, and taking an “earnings bath.” The analyses yield evidence that only non-large firms manipulate tax reserves to meet/beat earnings forecast in the post-FIN 48 period; however, tax reserves are still utilized by both large and non-large firms to smooth earnings. Moreover, evidence is provided that the auditor who provides more tax services facilitates large firms’ earnings smoothing in the post-FIN 48 period, implying independence impairment. But this behavior does not exist within non-large firms, arguably because the auditor does not compromise independence for less important clients.

scholarly journals Auditor-Provided Tax Services and Accounting for Tax Uncertainty

2019 ◽  
Vol 54 (03) ◽  
pp. 1950011
Author(s):  
Christoph Watrin ◽  
Stephan Burggraef ◽  
Falko Weiss
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Quality ◽  
Tax Avoidance ◽  
Accounting Standards ◽  
Tax Planning ◽  
Conservative Approach ◽  
Positive Relation ◽  
Fin 48 ◽  
Financial Reporting Standards

This paper investigates the associations of auditor-provided tax services (APTS) with tax planning and audit quality using a German sample. Our findings differ from those of previous U.S. studies, which we attribute to the fact that prior to 2015, the International Financial Reporting Standards (IFRS) did not contain a clear regulation similar to FIN 48, which requires firms to reserve for tax uncertainties. We find for our IFRS sample a negative association between APTS and tax avoidance, which suggests that auditors are aware that firms might not reserve for tax uncertainties and may advise more conservative tax strategies. Additionally, we find a positive relation between the level of APTS and the sustainability of tax strategies in client firms, consistent with this conservative approach. Furthermore, our results show that APTS are positively related to audit quality for our sample. This finding suggests that auditors, being aware of remaining tax uncertainties that are not reserved for, are more reluctant to accept earnings management, which would further increase the risk of restatement. Taken together, the results of our study suggest the importance of accounting standards regarding tax uncertainties for the implications of APTS.

Did FIN 48 Limit the Use of Tax Reserves as a Tool for Earnings Management?

2011 ◽  
Author(s):  
Richard A. Cazier ◽  
Sonja O. Rego ◽  
Xiaoli (Shaolee) Tian ◽  
Ryan J. Wilson
Keyword(s):  
Earnings Management ◽  
Fin 48 ◽  
Tax Reserves

Moral disengagement in war and peace: Portugal and the United States

2008 ◽  
Author(s):  
Mariana Barbosa ◽  
Carla Machado ◽  
Raquel Matos ◽  
Mi-Sung Kim ◽  
Ting Wu
Keyword(s):  
United States ◽  
Moral Disengagement ◽  
The United States ◽  
War And Peace

Moral disengagement and invasion: Peru, Lebanon, and the United States

2008 ◽  
Author(s):  
Tanvi Zaveri ◽  
Michael Toohey ◽  
Michael J. Stevens ◽  
Eros Desouza ◽  
Rouba Youssef ◽  
...  
Keyword(s):  
United States ◽  
Moral Disengagement ◽  
The United States

Sleep Deprivation, Moral Disengagement, and Cheating

2011 ◽  
Author(s):  
Mel Win Khaw ◽  
Michael S. Christian ◽  
Jerel E. Slaughter
Keyword(s):  
Sleep Deprivation ◽  
Moral Disengagement

Activism, the Endorsement of Nonviolence, and Moral Disengagement

2014 ◽  
Author(s):  
Ellen R. Gutowski ◽  
Ross Caputi ◽  
Candace Cantrell ◽  
Kathleen Malley-Morrison
Keyword(s):  
Moral Disengagement
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