Journal of Accounting and Economics Vol. 50 No. 1 2010
Will a departure from tax-based accounting encourage tax noncompliance? Archival evidence from a transition economy
Abstract
We investigate whether a departure from a tax-based accounting system toward the adoption of International Financial Reporting Standards encourages tax noncompliance. We also examine whether such a departure, which weakens book-tax conformity, affects the informativeness of book-tax differences for tax noncompliance. Our evidence suggests that as book-tax conformity decreases, tax noncompliance increases. Although book-tax differences remain informative of tax noncompliance, the informativeness attenuates as book-tax conformity weakens. Additionally, firms with high incentives to inflate book income are more tax compliant than their counterparts after the departure from a tax-based accounting system.
- DOI
- 10.1016/j.jacceco.2010.02.001
- Volume
- 50
- Issue
- 1
- Pages
- 58-73
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref