| General programme, activity sheet
|
|
| |
|
|
|
Thursday 5 September, 2013 13:30 to 14:10 |
|
Paper |
Tax alignment and loss recognition timeliness: An empirical analysis of European private companies Speaker: Jussi Karjalainen
Authors: Jussi Karjalainen; Jyrki Niskanen
We examine the effect of country-specific tax alignment on financial reporting by European private companies. We show that economic losses by private companies are recognized more timely in high tax alignment countries than in low tax alignment countries. The result is observed by using earnings changes and accruals based measures for loss recognition timeliness with controls for size, leverage, quality in legal enforcement by country, industry, and year fixed effects on panel data from 2005 to 2011. Our findings indicate that private companies in high tax alignment countries respond to the demand by the tax authorities by reporting losses more timely thereby reducing their tax burden. The study provides insights into the accounting harmonization and book-tax conformity determining the quality of financial reporting. Further information: Session 1 Room 0.1.
|