This study provides evidence on a significant real consequence of an opaque financial reporting information environment: increased corporate tax avoidance. Using an international sample of firms, I find that firms with a more opaque information environment, as measured at both the firm and...

I examine whether and under what circumstances changes in net income caused by changes in effective tax rates (ETRs) (the tax change component) persist and whether the tax change component aids in forecasting future earnings incremental to aggregate earnings excluding the tax change. I decompose...

Recent research reports that book-tax differences are not only informative about future earnings but are also associated with future stock returns. The combination of these results suggests the possibility that investors misprice securities by not fully incorporating tax-based information into...

This paper investigates the extent to which analysts incorporate tax-based earnings information into their earnings forecasts relative to other earnings information. We find that analysts' mis-reaction to tax-based earnings information is distinct from their mis-reaction to other (non-tax)...

It is well known that the objectives of financial accounting and tax accounting sometimes conflict, resulting in book-tax differences (BTDs). In this study we test for associations between measures of BTDs and measures of market participants' uncertainty regarding the information conveyed in...

We use event study techniques to investigate market participants' ex ante perceptions regarding the benefits and burdens of Interpretation Nos. 46 and 46R, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51 (FIN 46/R). The evidence suggests investors believed the costs...

We explore the importance of book and tax factors in initial public offerings using equity carve-outs undertaken by publicly traded parents. The advantage of such carve-outs over typical IPOs is that the book and tax positions of pre-IPO shareholders can be accurately estimated due to financial...

We take advantage of recent indirect tax reforms in India to study the incentives to engage in indirect tax avoidance and shareholder valuation of such avoidance. Our results suggest that size of the product portfolio, geographical proximity of manufacturing facilities to headquarters, ownership...

In this study we examine whether higher levels of tax risk are associated with increased firm risk, as perceived by capital market participants. Given the difficulties of measuring tax risk, we utilize four different proxies that prior research indicates capture greater tax-related uncertainty,...

I develop a structural model to quantify the costs of tax avoidance. In the model, the firm trades off tax savings with tax-audit risk, financial-reporting benefits, and non-tax costs (which affect pre-tax income). The comparative statics suggest tax avoidance is path-dependent, which can help...