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.
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Session 1 Room 0.1.


Other activities in Session 1 Room 0.1.
14:10 h. to 14:50 h.Paper

The components of book-tax differences in seven major countries, and how the differences vary over time.

Speaker: Erlend Kvaal

ADEIT Fundació Universitat Empresa

Plaza Virgen de la Paz, 3 · E-46001 Valencia
Phone: +34 96 160 3000