The quality of tax accounting for financial reporting purposes: International evidence from the United Kingdom

IF 3.3 Q1 BUSINESS, FINANCE

Journal of International Accounting Auditing and Taxation Pub Date : 2023-09-01 DOI:10.1016/j.intaccaudtax.2023.100564

Qian Song , Kevin Holland

{"title":"The quality of tax accounting for financial reporting purposes: International evidence from the United Kingdom","authors":"Qian Song , Kevin Holland","doi":"10.1016/j.intaccaudtax.2023.100564","DOIUrl":null,"url":null,"abstract":"<div><p>The quality of tax accounting can be defined as the relationship between the annual tax expense reported in firms’ financial statements and future tax cashflows. As corporate income taxes have a material proportion of earnings, assessing the tax accounting quality can help financial statement users in evaluating future commitment to internal funds. While there is an emerging US-based literature on tax accounting quality, to the authors’ knowledge this is the first study to examine tax accounting quality outside of the US and the first under a regime governed by International Financial Reporting Standards. The results indicate that tax accounting quality is significantly lower for firms that engage in higher levels of tax management or have stronger earnings management pressure. While corporate governance mechanisms do not moderate the relationship between tax management and tax accounting quality, there is some evidence of a moderating effect in the relationship between earnings management pressure and tax accounting quality. In addition, we observe variations in tax accounting quality associated with a change in tax-related financial reporting standards.</p></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":null,"pages":null},"PeriodicalIF":3.3000,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of International Accounting Auditing and Taxation","FirstCategoryId":"1085","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1061951823000435","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 0

Abstract

The quality of tax accounting can be defined as the relationship between the annual tax expense reported in firms’ financial statements and future tax cashflows. As corporate income taxes have a material proportion of earnings, assessing the tax accounting quality can help financial statement users in evaluating future commitment to internal funds. While there is an emerging US-based literature on tax accounting quality, to the authors’ knowledge this is the first study to examine tax accounting quality outside of the US and the first under a regime governed by International Financial Reporting Standards. The results indicate that tax accounting quality is significantly lower for firms that engage in higher levels of tax management or have stronger earnings management pressure. While corporate governance mechanisms do not moderate the relationship between tax management and tax accounting quality, there is some evidence of a moderating effect in the relationship between earnings management pressure and tax accounting quality. In addition, we observe variations in tax accounting quality associated with a change in tax-related financial reporting standards.

查看原文本刊更多论文

财务报告用税务会计的质量——来自英国的国际证据

税务会计的质量可以定义为企业财务报表中报告的年度税务费用与未来税收现金流之间的关系。由于企业所得税在收入中占很大比例，评估税务会计质量可以帮助财务报表用户评估未来对内部资金的承诺。虽然美国出现了关于税务会计质量的新兴文献，但据作者所知，这是第一项研究美国以外的税务会计质量，也是第一项在国际财务报告准则管辖的制度下进行的研究。研究结果表明，从事较高水平税务管理或盈余管理压力较大的企业的税务会计质量显著较低。虽然公司治理机制不能调节税务管理与税务会计质量之间的关系，但有证据表明盈余管理压力与税务会计素质之间的关系具有调节作用。此外，我们观察到税务会计质量的变化与税务相关财务报告标准的变化有关。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Journal of International Accounting Auditing and Taxation BUSINESS, FINANCE-

CiteScore

4.50

自引率

3.80%

发文量

期刊介绍： The Journal of International Accounting, Auditing and Taxation publishes articles which deal with most areas of international accounting including auditing, taxation and management accounting. The journal''s goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting. Submissions are expected to make a contribution to the accounting literature, including as appropriate the international accounting literature typically found in JIAAT and other primary US-based international accounting journals as well as in leading European accounting journals. Applied research findings, critiques of current accounting practices and the measurement of their effects on business decisions, general purpose solutions to problems through models, and essays on world affairs which affect accounting practice are all within the scope of the journal.