U.S. multinational corporations (MNCs) need to allocate decision rights between parent companies and subsidiaries to manage global operations. This paper examines how the allocation of decision rights affects foreign earnings management of MNCs. I find that the extent of foreign earnings...

We examine empirically if the manner of risk-taking in which firms engage is associated with aggressive reporting practices. Theoretical and anecdotal evidence suggests that firms face a tradeoff between risk-taking and managerial opportunism as they seek to produce higher returns. In the period...

This paper investigates whether individual top executives have incremental effects on their firms' tax avoidance that cannot be explained by characteristics of the firm. To identify executive effects on firms' effective tax rates, we construct a dataset that tracks the movement of 908 executives...

Using a new measure of financial constraints based on firms' qualitative disclosures, we find that financially constrained firms — firms that use more negative words in their annual reports — pursue more aggressive tax planning strategies as evidenced by: (1) higher current and future...

This study tests the relation between corporate tax avoidance and disclosure of geographic earnings for U.S. multinational companies. We find that after the adoption of Statement of Financial Accounting Standards No. 131 in 1998, firms opting to discontinue disclosure of geographic earnings in...

Spanish Abstract: La presente investigación se realizó en Monclova, Coah., en el año 2011 y tiene por objeto constituir una empresa holding para obtener beneficios fiscales sin caer en la evasión o elusión fiscal, esta alternativa permite controlar desde la cúspide a las demás empresas...

We analyze a sample of firms accused of fraudulently overstating their earnings and examine the extent, if any, to which they paid additional income taxes on the allegedly fraudulent earnings. Based on restatements of current tax expense adjusted for the tax benefits of stock options, the...

This paper examines the ability of financial statement measures of average and marginal tax rates to capture tax attributes utilizing a matched sample of firm-level tax return and Compustat data. The results suggest that commonly used measures of average tax rates provide little insight about...

I examine the effects of derivatives use on earnings management behavior. I develop a self-selection simultaneous-equations model that captures managers' incentives to use derivatives and manage discretionary accruals. Empirical results from estimating the model on 1994-1996 data for a sample of...

In a recent working paper, Plesko (1999) uses confidential tax return data to evaluate alternative measures of corporate average and marginal tax rates and concludes quot;The results suggest that commonly used measures of average tax rates provide little insight about annual corporate tax...