| Summary: | 碩士 === 國立高雄應用科技大學 === 會計系 === 102 === Owing to the complexity of worldwide tax environment, it is important for corporate making prudent and forward-looking tax strategy to effectively manage tax risk. Although tax aggressiveness can reduce tax liabilities, increase after-tax cash flows and net income. However, tax aggressiveness can simultaneously impose significant cost on firms. Because firms suffer reputational penalties, not only negatively effects of tax authorities’ future audits, but also negatively affects investors’ earnings quality.
We examine the sequence of exercising accounting discretions and tax aggressiveness strategies. First, we use book-tax difference as proxies for tax aggressiveness strategies. The empirical results reveal that managers determine the level of discretionary accruals and book-tax difference simultaneously for Taiwan’s listed firms. Furthermore, we use book-tax permanent difference as proxies for tax aggressiveness strategies. The empirical results also show that managers determine the level of discretionary accruals and book-tax permanent difference simultaneously for Taiwan’s listed firms. Therefore, our results show that managers determine discretionary accruals and tax aggressiveness strategies simultaneously for Taiwan’s listed firms.
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