Research in Accounting for Income Taxes
This paper comprehensively reviews Accounting for Income Taxes (AFIT). The first half provides background and a primer on AFIT. The second half reviews existing studies in detail and offers suggestions for future research. We emphasize the research questions that have been addressed (most of which relate to whether the tax accounts are used to manage earnings, and whether the tax accounts are priced by equity market participants) and highlight areas that have not received much research attention. We close with a call for a theoretical framework, more study of the inconsistencies between research and practice, and improved econometrics.
We thank Justin Hopkins, Hyunseob Kim, Kevin Markle, Jenna Meints, and Jake Thornock for outstanding research assistance. We thank Ross Watts (the editor), an anonymous referee, Jeff Abarbanell, Scott Dyreng, Jonathan Forman, Mary Margaret Frank, Ed Maydew, Lillian Mills, Richard Sansing, Casey Schwab, Jeri Seidman, Stephanie Sikes, the Texas Tax Readings Group, and participants at the 2009 UNC Tax Symposium and the National Tax Association 2009 annual conference for helpful comments. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Graham, John R. & Raedy, Jana S. & Shackelford, Douglas A., 2012. "Research in accounting for income taxes," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 412-434. citation courtesy of