Outline
- Abstract
- Keywords
- 1 Introduction
- 2 Hypothesis Development and Related Literature
- 2.1 Earnings Announcement Timing Motives
- 2.2 Tax Avoidance Motives
- 3 Methodology
- 3.1 Sample Description
- 3.2 Tax Avoidance Proxies
- 3.3 Research Design
- 4 Primary Analysis
- 4.1 Descriptive Statistics
- 4.2 Correlations
- 4.3 Multivariate Analyses
- 4.4 Supplemental Analysis
- 5 Conclusion
- Acknowledgments
- References
رئوس مطالب
- چکیده
- 1.مقدمه
- 2. توسعه فرضیه و مطالب مربوطه
- 2.1 انگیزه های زمان بندی اعلان درامد ها
- 2.2. انگیزه های فرار مالیاتی
- 3. روش شناسی
- 3.1 توصیف نمونه
- 3.2 پروکسی های فرار مالیاتی
- 3.3 طراحی تحقیق
- 4. تحلیل اولیه
- 4.1 آمار های توصیفی
- 4.2 همبستگی ها
- 4.3 تحلیل های چند متغیری
- 4.4 تحلیل تکمیلی
- 5. نتیجه گیری
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.
Keywords: Earnings announcement timing - Earnings announcements - Reporting delay - Tax aggressiveness - Tax avoidanceConclusions
The purpose of this paper is to investigate the extent to which corporate tax avoidance results in a less timely annual earnings announcement. Evidence is presented in favor of this hypothesis. Following prior literature, a robust set of controls are used in order to isolate the effect of tax avoidance on the timeliness of the annual earnings announcement. Investigating the extent to which tax avoidance impacts the timeliness of the annual earnings announcement is important for several reasons. First, it extends the literature examining the ‘good news early, bad news late’ hypothesis by including the proposition that corporate tax avoidance aids management in hoarding bad news within the firm up to a point at which it meets a certain threshold and then is released at once (Kothari et al. 2009; Kim et al. 2011). Second, tax avoidance as an explanation for a delay in the annual earnings announcement sheds additional light on explanations for information asymmetry that is particularly acute during the largest annual information production period within the firm. Finally, there is increasing evidence that corporate tax avoidance impacts the firm’s information risk and hence is becoming a significant risk characteristic that should be considered in evaluating firm-specific risk.
Our study also contributes to the debate over book-tax conformity (Hanlon and Heitzman 2010; Atwood et al. 2010). Specifically, we provide evidence suggesting that one consequence of decreased book-tax conformity (i.e., greater book-tax differences) is a delayed annual earnings announcement. Moreover, we show that high levels of exhibited tax avoidance are associated with less informative annual earnings announcements. Although our focus is on the relation between tax avoidance and the timing of the mandatory annual earnings announcement, we look to future research to explore possible relations between voluntary disclosure policy and tax avoidance. Specifically, it would also be of interest to examine the link between changes in a firm’s level of tax avoidance and changes in a firm’s voluntary disclosure pattern.