Corporate tax avoidance and the timeliness of annual earnings announcements

Aaron Crabtree () and Thomas Kubick

Review of Quantitative Finance and Accounting, 2014, vol. 42, issue 1, 67 pages

Abstract: Consistent with an agency theory of tax avoidance, this study investigates the extent to which tax avoidance results in a less timely annual earnings announcement. Using 16,340 firm-years spanning the period 1993–2010, evidence is presented suggesting tax avoidance that manifests through greater temporary and permanent book-tax differences results in a less timely annual earnings announcement. This result is robust to including several controls previously documented to affect reporting delay, including the magnitude of the earnings surprise, size, profitability, auditor-related influences, shareholder composition, capital intensity, financial reporting aggressiveness and financial condition. Evidence is also presented suggesting that tax avoidance impacts the value-relevance of earnings to investors at the announcement date, evaluated by the earnings response coefficient. Copyright Springer Science+Business Media New York 2014

Keywords: Tax avoidance; Tax aggressiveness; Earnings announcements; Earnings announcement timing; Reporting delay; G14 M41 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/s11156-012-0333-9

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