Internal Control Weakness and Book-Tax Difference

• Main Authors: Tsai, Su-Jane, 蔡素珍
• Other Authors: Fan, Hung-Shu
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/66828389208849741269

碩士 === 輔仁大學 === 會計學系碩士班 === 101 === The purpose of this study is to examine the relation between the internal control weakness and the book-tax difference. Following Chen and Tsai (2006), this study estimates taxable income by income tax expense divided by the appropriate tax rate. The sample of this study consists of listed firms during 2006-2012. The firms with the internal control weakness are listed and OTC companies published due to weak internal control by the Securities and Futures Bureau of Financial Supervisory Commission. The empirical result shows that the internal control weakness is significantly positive-related to the book-tax difference. This study performs several additional tests including replacing the weak internal control variable by the amount of the penalty due to weak internal control, the frequency of the penalty due to weak internal control tests, and adding year dummies variables, the electronics industry subsample test. The empirical results of these additional tests are consistent with the main test results.