Earnings and Balance-Sheet Properties and the Interplay of Tax Incentives and Tax Enforcement
SSRN Electronic Journal
2020
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Example: if you select the 1-year option for an article published in 2019 and a metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019. If you select the 3-year option for the same article published in 2019 and the metric category shows 90%, that means that the article or review is performing better than 90% of the other articles/reviews published in that journal in 2019, 2018 and 2017.
Citation Benchmarking is provided by Scopus and SciVal and is different from the metrics context provided by PlumX Metrics.
Article Description
This paper analyzes the joint association of tax incentives and tax law enforcement strictness on private firms' earnings and balance sheet properties. It answers a call for additional research on why "there is (...) substantial within-country variation in managers' incentives to [manage] earnings" (LaFond et al. (2007), p. 14). There is evidence that tax laws in practice are enacted to a different extent within a country's supposedly homogenous legal framework. The key results are that stricter tax law enforcement impairs managers' ability or willingness to engage in income-decreasing accrual earnings management. On the downside, managers instead seem to resort to real earnings Management choices which are associated with potentially negative long-term real business impact but covered by the business judgment rule.
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