Earnings Management Through Effective Tax Rates: The Effects of Tax Planning Investment and the Sarbanes-Oxley Act of 2002

By Kirsten A. Cook, G. R. Huston, Thomas C. Omer. 2008

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A review of tax research (2010, unknown): “Evidence in Cook et al. (2008) suggests that the results in Dhaliwal et al. are caused by both management of tax accruals and tax avoidance behavior, where tax avoidance is proxied for by high tax fees paid to the auditor.20 We turn next to the evidence on earnings management through specific tax…”
Audit Quality and the Trade-Off between Accretive Stock Repurchases and Accrual-Based Earnings Management (2012, methodology): “Consistent with prior research (Dhaliwal et al. 2004; Cook et al. 2008; Gleason and Mills 2008), we limit the construction of SUSPECT_REPURCHASE1 to within five cents of analysts’ forecasts to reduce the influence of motivations for stock repurchases unrelated to efforts to manage EPS within our set”
Do Auditor-Provided Tax Services Improve the Estimate of Tax Expense? (2007, background): “Various authors find evidence consistent with corporations using tax expense to manage earnings generally (Dhaliwal, Gleason, and Mills 2004; Cook et al. 2008) or through permanently reinvested foreign earnings (Krull 2004), valuation allowances (Frank and Rego 2006; Schrand and Wong 2003), or tax r”