اجتناب از پرداخت مالیات شرکت ها و بهنگام بودن اعلان های سود سالیانه

ABSTRACT Corporate tax avoidance and the timeliness of annual earnings announcements

The investigation of disclosure strategies and financial reporting choices made by firms represents an important and influential domain of accounting research. Among the strands of research that encompass this domain are studies that investigate earnings announcement strategies. Prior research suggests managers tend to withhold the release of bad news relative to good news (e.g., Patell and Wolfson 1982; Bagnoli et al. 2002; Abad et al. 2009; Kothari et al. 2009). Several possible causes of this ‘good news early, bad news late’ phenomenon have been advanced in the literature, such as proprietary reporting costs (Verrecchia 1983, 2001), the desire to allow more time to disseminate bad news (Doyle and Magilke 2009) and long horizon career concerns (Kothari et al. 2009). In particular, Kothari et al. (2009) suggest managers’ tendency to withhold bad news stems from agency conflicts inherent in the separation of ownership and control. This paper seeks to add to this line of research by investigating the extent to which corporate tax avoidance contributes to a delay in the timing of the annual earnings announcement (i.e., the length of time between the actual earnings announcement date and the prior fiscal year-end).

There are several reasons why one might anticipate a relation between corporate tax avoidance and the timing of the annual earnings announcement. First, Desai and Dharmapala (2006) suggest a potential interdependence between tax planning and managerial opportunism. Second, complex tax structures may engender additional scrutiny during financial statement audits. Finally, to the extent that a high level of tax avoidance informs on the firm’s future growth opportunities (and hence the investment opportunity set), additional time may be necessary in order to formulate a response to an earnings surprise. Thus, there are reasons to believe, a priori, that tax avoidance is associated with a less timely annual earnings announcement.

This paper compliments the Kim et al. (2011) study, and disclosure literature in general, by investigating the extent to which corporate tax avoidance influences the timelines of the annual earnings announcement. In a sample consisting of 16,340 firm-year observations spanning the period 1993–2010, evidence is presented suggesting higher levels of corporate tax avoidance, manifested through larger temporary and permanent book-tax differences, results in a less timely annual earnings announcement. This result is robust to including several control variables used in prior empirical work, such as the sign and magnitude of the earnings surprise at the announcement date, size, auditor-related influences, financial condition, leverage, shareholder composition, capital intensity and financial reporting aggressiveness.

We also investigate whether greater levels of tax avoidance results in less informative earnings announcements by examining the earnings response coefficients (‘‘ERCs’’) surrounding the annual earnings announcement date. Evidence suggests a lower earnings response coefficient for the 3 day window surrounding the annual earnings announcement for firms with greater exhibited tax avoidance during the most recent fiscal year (relative to firms with moderate levels of tax avoidance). This suggests earnings are generally more informative in the short window surrounding the annual earnings announcement date for firms with less tax avoidance during the previous fiscal year, complementing Ayers et al. (2009). Our study also offers practical relevance to the debate over book-tax conformity (Hanlon and Heitzman 2010; Atwood et al. 2010) by documenting that a potential ‘hidden cost’ associated with reduced book-tax conformity (i.e., greater book-tax differences) is a less timely and less informative annual earnings announcement.

The rest of this paper proceeds as follows. Section 2 reviews the previous literature in earnings announcement timing and tax avoidance that motivates the current study. Section 3 presents the sample selection criteria, tax avoidance proxies and research design. Section 4 presents results and Sect. 5 briefly concludes.