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Contemporary Accounting Research Vol. 32 No. 1 2015

Financial Accounting Effects of Tax Aggressiveness: Contracting and Measurement

Anja De Waegenaere1; Richard C. Sansing2; Jacco L. Wielhouwer3

1 Tilburg University · 2 Dartmouth College and CentER Tilburg University · 3 VU University Amsterdam

Abstract

This study examines a setting in which a tax‐reporting decision is delegated to a firm's tax manager. Using financial accounting measures of tax expense to evaluate the tax manager allows the firm to efficiently attain the level of tax avoidance it prefers, despite the fact that the consequences of the tax‐reporting decision will occur in the future. The study also examines how well two accounting measures of tax aggressiveness — cash taxes paid and the unrecognized tax benefit — distinguish between conservative and aggressive firms.

DOI
10.1111/1911-3846.12068
Volume
32
Issue
1
Pages
223-242
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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