A trade-off between tax reporting and financial reporting aggressiveness based on financial variables
Firms likely exhibit greater financial reporting aggressiveness to increase their earnings and eventually attract investors. However, firms also tend to reduce their taxable income to maximize their cash flow. Consequently, firms arguably manage their corporate income tax aggressively. This research...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Universitas Merdeka Malang
2020-07-01
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| Series: | Jurnal Keuangan dan Perbankan |
| Subjects: | |
| Online Access: | http://jurnal.unmer.ac.id/index.php/jkdp/article/view/4018 |
| _version_ | 1818715938760949760 |
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| author | Acropolis Gemilang Mada Ngara Ledewara Ari Budi Kristanto Maria Rio Rita |
| author_facet | Acropolis Gemilang Mada Ngara Ledewara Ari Budi Kristanto Maria Rio Rita |
| author_sort | Acropolis Gemilang Mada Ngara Ledewara |
| collection | DOAJ |
| description | Firms likely exhibit greater financial reporting aggressiveness to increase their earnings and eventually attract investors. However, firms also tend to reduce their taxable income to maximize their cash flow. Consequently, firms arguably manage their corporate income tax aggressively. This research aims to investigate whether firms with low debt levels are more aggressive in their tax reporting than in financial reporting, firms with financial deficits are more aggressive in their financial reporting than in tax reporting, and firms with better access to external/internal capital market are more aggressive in their tax reporting rather than in financial reporting. We use three financial variables, namely debt ratios, financial deficits, and access to internal or external capital markets as proxies for firms’ financial condition. This study finds that all financial variables except financial deficits, motivate firms to engage in aggressive reporting decisions. Specifically, firms with higher debt ratios and easier access to external or internal capital markets will likely exhibit more aggressive tax reporting than financial reporting. |
| first_indexed | 2024-12-17T19:11:19Z |
| format | Article |
| id | doaj.art-b8311b519cd242c4b5fb1bb991a5d961 |
| institution | Directory Open Access Journal |
| issn | 1410-8089 2443-2687 |
| language | English |
| last_indexed | 2024-12-17T19:11:19Z |
| publishDate | 2020-07-01 |
| publisher | Universitas Merdeka Malang |
| record_format | Article |
| series | Jurnal Keuangan dan Perbankan |
| spelling | doaj.art-b8311b519cd242c4b5fb1bb991a5d9612022-12-21T21:35:52ZengUniversitas Merdeka MalangJurnal Keuangan dan Perbankan1410-80892443-26872020-07-0124332633910.26905/jkdp.v24i3.4018A trade-off between tax reporting and financial reporting aggressiveness based on financial variablesAcropolis Gemilang Mada Ngara Ledewara0Ari Budi Kristanto1Maria Rio Rita2Department of Management, Faculty of Economics and Business, Universitas Kristen Satya Wacana Jl. Diponegoro No.52-60, Salatiga, 50711, IndonesiaDepartment of Management, Faculty of Economics and Business, Universitas Kristen Satya Wacana Jl. Diponegoro No.52-60, Salatiga, 50711, IndonesiaDepartment of Management, Faculty of Economics and Business, Universitas Kristen Satya Wacana Jl. Diponegoro No.52-60, Salatiga, 50711, IndonesiaFirms likely exhibit greater financial reporting aggressiveness to increase their earnings and eventually attract investors. However, firms also tend to reduce their taxable income to maximize their cash flow. Consequently, firms arguably manage their corporate income tax aggressively. This research aims to investigate whether firms with low debt levels are more aggressive in their tax reporting than in financial reporting, firms with financial deficits are more aggressive in their financial reporting than in tax reporting, and firms with better access to external/internal capital market are more aggressive in their tax reporting rather than in financial reporting. We use three financial variables, namely debt ratios, financial deficits, and access to internal or external capital markets as proxies for firms’ financial condition. This study finds that all financial variables except financial deficits, motivate firms to engage in aggressive reporting decisions. Specifically, firms with higher debt ratios and easier access to external or internal capital markets will likely exhibit more aggressive tax reporting than financial reporting.http://jurnal.unmer.ac.id/index.php/jkdp/article/view/4018earnings managementfinancial reporting aggressivenesstax avoidance |
| spellingShingle | Acropolis Gemilang Mada Ngara Ledewara Ari Budi Kristanto Maria Rio Rita A trade-off between tax reporting and financial reporting aggressiveness based on financial variables Jurnal Keuangan dan Perbankan earnings management financial reporting aggressiveness tax avoidance |
| title | A trade-off between tax reporting and financial reporting aggressiveness based on financial variables |
| title_full | A trade-off between tax reporting and financial reporting aggressiveness based on financial variables |
| title_fullStr | A trade-off between tax reporting and financial reporting aggressiveness based on financial variables |
| title_full_unstemmed | A trade-off between tax reporting and financial reporting aggressiveness based on financial variables |
| title_short | A trade-off between tax reporting and financial reporting aggressiveness based on financial variables |
| title_sort | trade off between tax reporting and financial reporting aggressiveness based on financial variables |
| topic | earnings management financial reporting aggressiveness tax avoidance |
| url | http://jurnal.unmer.ac.id/index.php/jkdp/article/view/4018 |
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