A review of earnings management in private firms in response to tax rate changes

Sundvik Dennis ()
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Sundvik Dennis: Assistant Professor of Accounting, Hanken School of Economics, Hanken, Finland

Nordic Tax Journal, 2017, vol. 2017, issue 1, 151-161

Abstract: In this paper, I present a review of tax accounting research with a specific focus on earnings management in response to changes in the corporate tax rate. While prior surveys of the tax accounting literature have a broad scope and focus primarily on publicly listed firms, I concentrate on studies examining private firms. These firms have stronger incentives to engage in tax-induced earnings management and recent evidence shows that firms in general defer earnings from high to low tax periods around tax reforms. I summarize contemporary studies, questions examined, and learnings. In addition, I discuss practical implications and outline future research possibilities.

Keywords: Accounting; Corporate taxation; Earnings management; Private firms; Tax reform (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:notajo:v:2017:y:2017:i:1:p:151-161:n:11

DOI: 10.1515/ntaxj-2017-0011

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