2015
DOI: 10.3926/jiem.1310
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Listed companies’ income tax planning and earnings management: Based on China’s capital market

Abstract: Abstract:Purpose: The Ministry of Finance issued the new China accounting standards on February 15, 2006, which requires the listed companies to use the balance sheet liability method for the income tax accounting. Thus, it gives us an opportunity to investigate the earnings management of listed companies from the perspective of income tax. Under the balance sheet liability method, our researches just try to investigate the relationship between the listed companies' income tax planning and earnings managemen… Show more

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Cited by 13 publications
(13 citation statements)
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References 13 publications
(12 reference statements)
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“…Future market value based on equity is the development of the yield book instrument model Hu et al (2015) in calculating the market value of bonds. This ratio illustrates the probability of marketable level in the following period when it indicates the higher ratio (more than zero), absolutely it can be categorized into a marketable share as a good signal to invest in this company.…”
Section: Methodsmentioning
confidence: 99%
See 1 more Smart Citation
“…Future market value based on equity is the development of the yield book instrument model Hu et al (2015) in calculating the market value of bonds. This ratio illustrates the probability of marketable level in the following period when it indicates the higher ratio (more than zero), absolutely it can be categorized into a marketable share as a good signal to invest in this company.…”
Section: Methodsmentioning
confidence: 99%
“…This test proves Shin and Kim (2019) regarding the negative investor responses on the earnings distortions, so there are negative stock price movements. When the investor could have predicted the expected return in the following period with high accuracy, there is a positive investor perception on the actual earnings on the current period (Hu et al 2015). Innate accruals quality indicators have reflected the management's obedience to carrying out the accounting standard at a high level, the actual earnings give the fundamental condition, including the company's existence in long run; this strengthens Pompili and Tutino (2019).…”
Section: Analysis and Findingsmentioning
confidence: 99%
“…(Lebert, 2019) and (Beyer, Marinovic, & Guttman, 2019) proved that the earnings quality impacts the future return, indicating that the expected return could be estimated precisely, where the gap between actual and expected return is in a restricted area. Based on tax regulation compliance, (Hu, Cao, & Zheng, 2015) stated that the investor had not highlighted agency cost's volatile movement in the subsequent period. According to (Lee 2016), high tax conformity causes a positive perception of high compliance with tax regulation, this is related to agency cost and positive movement of the market price in the future because the investor has no tolerance for the infringement on the available tax rule.…”
Section: Theoretical Framework and Hypothesesmentioning
confidence: 99%
“…The tax expense is one of can reduce the companies' profit and dividend for investors. Because of this, the management will do tax planning to minimize the tax expense so that company profits high (Rogers-Glabush, 2015;Alduneibat et al, 2017;Dridi & Boubaker, 2015;Hu et al, 2015;Hanlon & Heitzman 2010 ) and the firm value in the public still good (Lestari & Ward, 2015;Ylonen & Laine, 2015). However, with the enactment of expired tax collection in Indonesia for 5 years, companies in Indonesia must be prepared to encounter of tax audit and short-term tax planning will increase the tax expense from tax penalty received by company.…”
Section: Tax Planningmentioning
confidence: 99%