Does Aggressive Financial Reporting Accompany Aggressive Tax Reporting (and Vice Versa)?

2005 ◽  
Author(s):  
Mary Margaret Frank ◽  
Luann J. Lynch ◽  
Sonja O. Rego
Keyword(s):  
Financial Reporting ◽  
Aggressive Financial Reporting ◽  
Tax Reporting

Tax Reporting Aggressiveness and Its Relation to Aggressive Financial Reporting

2009 ◽  
Vol 84 (2) ◽  
pp. 467-496 ◽  
Author(s):  
Mary Margaret Frank ◽  
Luann J. Lynch ◽  
Sonja Olhoft Rego
Keyword(s):  
Stock Returns ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Tax Law ◽  
Reporting Incentives ◽  
Reporting Behaviors ◽  
Aggressive Financial Reporting ◽  
Tax Reporting ◽  
Better Than

ABSTRACT: We investigate the association between aggressive tax and financial reporting and find a strong, positive relation. Our results suggest that insufficient costs exist to offset financial and tax reporting incentives, such that nonconformity between financial accounting standards and tax law allows firms to manage book income upward and taxable income downward in the same reporting period. To examine the relation between these aggressive reporting behaviors, we develop a measure of tax reporting aggressiveness that statistically detects tax shelter activity at least as well as, and often better than, other measures. In supplemental stock returns analyses, we confirm that the market overprices financial reporting aggressiveness. We also find that the market overprices tax reporting aggressiveness, but only for firms with the most aggressive financial reporting.

scholarly journals The Influence Of Aggressive Financial Reporting Of The Company Toward Aggressive Tax Reporting In Agricultural Companies

2019 ◽  
Vol 3 (2) ◽  
pp. 167
Author(s):  
Mulyaning Wulan ◽  
Ilhamdi Ilhamdi ◽  
Kunti Jeihan Qistiyah
Keyword(s):  
Financial Reporting ◽  
Sampling Method ◽  
Fixed Effect Model ◽  
Variable Size ◽  
Trade Off ◽  
Significance Level ◽  
Independent Variables ◽  
Effect Model ◽  
Aggressive Financial Reporting ◽  
Tax Reporting

This study aims to determine the influence of aggressive financial reporting, ROA, DAR, and Size OF The Company toward Aggressive Tax Reporting (ATR) in agricultural companies listed in Daftar Efek Syariah (DES) during period 2013-2016. The sampling method is purposive sampling. The data analyzed using multiple regression for dated panel with significance level 5% (0,05). The choosing model test showed that model used in this study is the Fixed Effect Model (FEM). Simultaneously all independent variables from model had significant influence toward dependent variable (ATR). Partially aggressive financial reporting, ROA, and DAR that had significance influence toward ETR, while variable size had unsignificant influence. The research also showed that there is trade off between aggressive financial reporting and aggressive tax reporting.

scholarly journals The Attenuating Effect of Intelligent Agents and Agent Autonomy on Managers' Ability to Diffuse Responsibility for and Engage in Earnings Management

2020 ◽  
Vol 34 (4) ◽  
pp. 143-164
Author(s):  
Peter C. Kipp ◽  
Mary B. Curtis ◽  
Ziyin Li
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Intelligent Agents ◽  
Autonomous Agents ◽  
Ethical Conduct ◽  
Human Agent ◽  
Perception Of Control ◽  
Reporting Decisions ◽  
Aggressive Financial Reporting

SYNOPSIS Advances in IT suggest that computerized intelligent agents (IAs) may soon occupy many roles that presently employ human agents. A significant concern is the ethical conduct of those who use IAs, including their possible utilization by managers to engage in earnings management. We investigate how financial reporting decisions are affected when they are supported by the work of an IA versus a human agent, with varying autonomy. In an experiment with experienced managers, we vary agent type (human versus IA) and autonomy (more versus less), finding that managers engage in less aggressive financial reporting decisions with IAs than with human agents, and engage in less aggressive reporting decisions with less autonomous agents than with more autonomous agents. Managers' perception of control over their agent and ability to diffuse their own responsibility for financial reporting decisions explain the effect of agent type and autonomy on managers' financial reporting decisions.

scholarly journals The influence factors of the complementary level of financial and tax aggressiveness in Indonesia

2021 ◽  
Vol 10 (6) ◽  
pp. 213-220
Author(s):  
Salsabila Anggiani Amriza ◽  
Nurul Aisyah Rachmawati
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Stock Exchange ◽  
Influence Factors ◽  
Binary Logistic Regression ◽  
Financial Constraint ◽  
Manufacturing Companies ◽  
Tax Aggressiveness ◽  
Tax Reporting ◽  
The Relationship

This research focus to investigate the effect of audit quality and financial constraint on the complementary level of financial and tax reporting aggressiveness. This research uses binary logistic regression to investigate the effect of audit quality and financial constraint on the complementary level of financial and tax reporting aggressiveness with a sample of 147 manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2017-2019. This research found that companies with good audit quality have a complementary level of financial and tax reporting aggressiveness that tends to be below. Also, companies that face financial constraints have a higher complementary level of financial reporting and tax aggressiveness. This study presents empirical evidence that supports the view of audit quality and financial constraint’s impact on the complementary level of financial and tax aggressiveness. Although there are many studies that discuss the relationship between financial and tax aggressiveness, there are still few studies that contribute to examine the determinants of the complementary level of financial and tax reporting aggressiveness in Indonesia.

XBRL Tag Extensions and Tax Accrual Quality

2020 ◽  
Author(s):  
Stephanie Walton ◽  
Liu L Yang ◽  
Yiyang Zhang
Keyword(s):  
Financial Reporting ◽  
Relative Rate ◽  
Financial Statements ◽  
Accrual Quality ◽  
Business Reporting ◽  
Prior Literature ◽  
Tax Reporting ◽  
Financial Reporting Comparability

The adoption of eXtensible Business Reporting Language (XBRL) requires management to label all information in their firm's financial statements and corresponding notes with either standardor custom extended tags. While prior literature has found that the rate of customization is associated with increased financial reporting complexity, there could be an unintended, beneficial consequence to tax reporting. We examine how the relative use of tax-related XBRL tag extensions could highlight unique tax activity characteristics, in turn increasing tax accrual quality and improving tax reporting transparency. We find that having a higher relative rate of extended tax tags is associated with higher tax accrual quality. That is, utilizing more tax tag extensions can assist in providing useful tax information, especially when a high number of total XBRL tags are used. Our results also suggest the need to reexamine the standard taxonomy to include more tax-oriented terms to improve financial reporting comparability.

An Examination of Corporate Tax Shelter Participants

2009 ◽  
Vol 84 (3) ◽  
pp. 969-999 ◽  
Author(s):  
Ryan J. Wilson
Keyword(s):  
Financial Reporting ◽  
Abnormal Returns ◽  
Wealth Creation ◽  
Corporate Tax ◽  
Managerial Opportunism ◽  
Reporting Practices ◽  
Tax Shelter ◽  
Ex Post ◽  
Tax Shelters ◽  
Aggressive Financial Reporting

ABSTRACT: Recent evidence suggests that corporate tax shelters have become important corporate instruments for reducing tax burden. Based on a sample of identified tax shelter participants, I develop a profile of the type of firm that likely engages in tax sheltering. The model detects tax shelter participants through the use of variables predicted to be either affected by or associated with tax sheltering. I find that firms actively engaged in tax sheltering exhibit larger ex post book-tax differences and more aggressive financial reporting practices. Using this model of tax shelter firm characteristics, I identify a broad sample of predicted tax shelter firms from the population of firms. I then examine whether tax sheltering is associated with wealth creation for shareholders or with managerial opportunism. I find that active tax shelter firms with strong corporate governance exhibit positive abnormal returns. This finding is consistent with tax sheltering being a tool for wealth creation in well-governed firms.

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