The Persistence and Pricing of Earnings, Accruals, and Cash Flows When Firms Have Large Book-Tax Differences

By Michelle Hanlon. 2003

791 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/84927f04895aa0a5e93801285b279d33a07c1ca1

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Michelle Hanlon
2. Terry Shevlin
3. Liandong Zhang
4. Gordon Richardson
5. Thomas C. Omer
6. Roman Lanis
7. Christopher S. Armstrong
8. Jeong‐Bon Kim

In Strategy and Management

1. Jeong‐Bon Kim
2. Michelle Hanlon
3. Terry Shevlin
4. Christopher S. Armstrong
5. Weili Ge
6. Liandong Zhang
7. John (Xuefeng) Jiang
8. Ole‐Kristian Hope

Citations in the corpus

• Credit Ratings and Taxes: The Effect of Book–Tax Differences on Ratings Changes (2008, background): “As discussed above, large negative changes in book-tax differences might signal decreased earnings quality (Hanlon 2005), which would be interpreted as negative information for credit ratings”
• An Examination of Corporate Tax Shelter Participants (2009, background): “that large positive BTDs are partially caused by aggressive financial reporting. Hanlon (2005) ”
• Tax Aggressiveness and Corporate Transparency (2019, positive): “…we include the absolute value of the book-tax difference because earnings management, regardless of direction, could affect earnings quality.18,19 Hanlon (2005) and Dhaliwal et al. (2008) provide evidence that larger book-tax differences adversely affect firms’ earnings quality and cost of…”
• The association between book-tax conformity and earnings management (2014, positive): “Some prior studies (e.g., Hanlon 2005; Blaylock et al. 2012) provide evidence consistent with investors using book-tax differences to detect earnings management and adjusting their expectation for future earnings accordingly.”
• Accounting Anomalies and Fundamental Analysis: A Review of Recent Research Advances (2010, neutral): “, Hirshleifer (2001) and Subrahmanyam (2007).”
• Bridging the Reporting Gap: A Proposal for More Informative Reconciling of Book and Tax Income (2003, background): “…book and taxable income Financial Statement Reconciliation – SFAS 109 requirements for tax footnote disclosures As discussed in a companion paper, Hanlon (2003) concludes that the tax footnotes in financial statements are inadequate for precisely determining U.S. taxable income or…”
• Beauty is in the eye of the beholder: The effect of corporate tax avoidance on the cost of bank loans (2014, background): “Consistent with these arguments, there is evidence that tax avoidance is negatively associated with earnings persistence (e.g., Hanlon, 2005) and positively associated with discretionary accruals (Frank, Lynch, and Rego, 2009).”
• Can Book-Tax Differences Capture Earnings Management and Tax Management? Empirical Evidence from China (2011, positive): “book-tax differences (BTDs) reflect earnings management and earnings quality (Mills and Newberry, 2001; Phillips et al., 2003; Hanlon, 2005), while other studies show that BTDs are associated with tax sheltering (Shevlin, 2002; McGill and Outslay, 2004; Wilson, 2009; Frank et al.”
• A review of tax research (2010, positive): “First, the book- tax differences in Phillips et al. (2003) and Hanlon (2005) consist only of temporary differences because these are the differences most closely related to pre-tax accruals and most often hypothesized to provide information about pre-tax earnings quality.”