EconPapers    
Economics at your fingertips  
 

Top management team heterogeneity, governance changes and book-tax differences

Nor Shaipah Abdul Wahab, Collins G. Ntim, Mohd Muttaqin Mohd Adnan and Wei Ling Tye

Journal of International Accounting, Auditing and Taxation, 2018, vol. 32, issue C, 30-46

Abstract: Book-tax differences (BTD) explain the differences between accounting and tax incomes. This study examines the extent to which the heterogeneity of the top management team (TMT) is related to a firm’s BTD level with a specific focus on the effect of the 2012 changes in Malaysian corporate governance regulations. Psychologically and socially inspired-upper echelons theory is used to hypothesize that the TMT’s age, tenure, education, and gender heterogeneities will be significantly related to the firm’s BTD level. Using a sample of Bursa Malaysia listed firms for the eight-year period from 2008 to 2015, our findings suggest significant relationships between BTD and heterogeneity in age, tenure and education. We attribute the relationship between age and tenure heterogeneity to the subsample period prior to the change in the corporate governance regulations. The analysis based on levels of heterogeneity suggests that the relationship between BTD and heterogeneity in education is only significant within low heterogeneity subsample. This study contributes to the existing literature and practice by providing new evidence to support psychologically and socially inspired-upper echelons theory in explaining the effect that TMT heterogeneity has on a firm’s BTD level. This study also provides new insights on financial reporting and taxation from a governance perspective.

Keywords: Top management team; Heterogeneity; Malaysia; Book-tax differences; Psychologically and socially inspired-upper echelons theory (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1061951818301186
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jiaata:v:32:y:2018:i:c:p:30-46

Access Statistics for this article

Journal of International Accounting, Auditing and Taxation is currently edited by R. Larson

More articles in Journal of International Accounting, Auditing and Taxation from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2018-12-08
Handle: RePEc:eee:jiaata:v:32:y:2018:i:c:p:30-46