Consistency of Book-Tax Differences and the Information Content of Earnings

• DOI: 10.2308/atax-50174
• Publication Date: 2012-03-29T16:07:42Z
• Authors: Linda H. Chen; Dan S. Dhaliwal; Mark A. Trombley
• Keywords: Taxable income; Write-off

ABSTRACT This paper examines the effect of tax planning and earnings management on informativeness book income taxable income. We conduct two sets tests documenting (1) incremental income, (2) relation between consistency book-tax difference The depends firm decisions regarding planning. Consistency is measured as standard deviation discretionary component Our results show that difference, a measure joint planning, related to persistence both has an information content JEL Classifications: G12; G32; H24; H25.