Corporate governance, incentives, and tax avoidance Armstrong, Christopher S.; Blouin, Jennifer L.; Jagolinzer, Alan D. ...
Journal of accounting & economics,
08/2015, Letnik:
60, Številka:
1
Journal Article
Recenzirano
Odprti dostop
We examine the link between corporate governance, managerial incentives, and corporate tax avoidance. Similar to other investment opportunities that involve risky expected cash flows, unresolved ...agency problems may lead managers to engage in more or less corporate tax avoidance than shareholders would otherwise prefer. Consistent with the mixed results reported in prior studies, we find no relation between various corporate governance mechanisms and tax avoidance at the conditional mean and median of the tax avoidance distribution. However, using quantile regression, we find a positive relation between board independence and financial sophistication for low levels of tax avoidance, but a negative relation for high levels of tax avoidance. These results indicate that these governance attributes have a stronger relation with more extreme levels of tax avoidance, which are more likely to be symptomatic of over- and under-investment by managers.
The incentives for tax planning Armstrong, Christopher S.; Blouin, Jennifer L.; Larcker, David F.
Journal of accounting & economics,
02/2012, Letnik:
53, Številka:
1-2
Journal Article
Recenzirano
We use a proprietary data set with detailed executive compensation information to examine the relationship between the incentives of the tax director and GAAP and cash effective tax rates, the ...book-tax gap, and measures of tax aggressiveness. We find that the incentive compensation of the tax director exhibits a strong negative relationship with the GAAP effective tax rate, but little relationship with the other tax attributes. We interpret these results as indicating that tax directors are provided with incentives to reduce the level of tax expense reported in the financial statements.
► We find that tax directors' compensation is correlated with the GAAP ETR. ► We do not find that tax directors' compensation is correlated with the cash ETR. ► We do not find that tax directors are compensated for being overly tax aggressive. ► We do not find that other executives' pay is correlated with tax planning.
Dairy calves not kept for replacement are sold at young age in Québec auction markets for white and grain-fed veal calf production. The province of Québec produces 80% of the Canadian veal meat, but ...little information is available on the factors associated with the calves' price per crude weight (Can$/kg; Can$1 = US$0.78 at time of writing). The characteristics of calves sold in Québec auction markets from 12 complete years (2008–2019) were retrospectively studied. The calves' weight, breed and sex, the year and season of sale, the auction site, as well as the estimated distance traveled between the farm of origin and the auction site were analyzed as potential covariates associated with calf price. Two multivariable logistic models associated with low sale value (below the 10th or the 25th percentile of the day price) and 2 models associated with good sale characteristics (above the 50th or the 75th percentile of the day price) were built. The median distance between the farm and the auction site was 52 km (interquartile range: 30–95 km). Only 5% of calves traveled distances greater than 220 km. The weight, breed, sex, and auction sites explained most of the variability in the different models. Distance traveled and multiple interactions were also significantly associated with the outcomes. Calves with body weight from 48 to <56 kg were sold in higher percentiles of the day than lighter or heavier calves. Beef-crossed calves had better sale prices than Holstein, whereas colored dairy calves had lower sale characteristics than both Holstein and beef-crossed calves. The effect of distance traveled was complex, varying depending on the model and interactions, and explained a small portion of the total deviance in every model. Calves traveling from distances ≥110 km had lower sale characteristics in summer and fall in the different studied models. This study gives relevant insights on calves' characteristics associated with good versus low sale prices in Québec auction markets.
The veal calf industry in Québec depends on young calves' availability at auction. Most of these calves come from dairy farms. The aim of this cross-sectional study was to determine the effect of ...clinical anomalies and other calf characteristics on their sale price. A total of 3,820 calves from 5 different auctions were included in this observational study. The calves were examined by a veterinarian on arrival at the auction and screened for umbilical anomalies, the presence of nasal or eye discharge, joint abnormality, diarrhea, appearance of neonatal characteristics (compatible with age less than 1 wk), and general health status mainly based on the presence of depression and dehydration. The final multivariable model included 5 different variables (calf weight, sex, breed, abnormal joints, and general health status) and the interaction between sex and general health status. The presence of abnormal joints and unhealthy characteristics was negatively associated with standardized price. Female calves and mixed breed beef calves were positively associated with standardized price. Finally, the calves' weight was associated with standardized price in a quadratic fashion. Ongoing or previous diarrhea had no effects on standardized price. This study will be helpful for both dairy and veal producers for improving the quality of calves sold to the Québec auction market.
ABSTRACT We investigate whether aggressive tax planning firms have a less transparent information environment. Although tax planning provides expected tax savings, it can simultaneously increase the ...financial complexity of the organization. And to the extent that this greater financial complexity cannot be adequately clarified through communications with outside parties, such as investors and analysts, transparency problems can arise. Our investigation of the association between tax aggressiveness and information asymmetry, analysts' forecast errors, and earnings quality suggests that aggressive tax planning is associated with lower corporate transparency. We also find evidence that managers at tax-aggressive firms attempt to mitigate these transparency problems by increasing various tax-related disclosures. Overall, our results suggest that firms face a trade-off between tax benefits and financial transparency when choosing the aggressiveness of their tax planning. JEL Classifications: G30; H26; M41.
This study jointly evaluates firm-level changes in investor composition and shareholder distributions following a 2003 reduction in the dividend and capital gains tax rates for individuals. We find ...that directors and officers, but not other individual investors, rebalanced their portfolios to maximize after-tax returns in light of the new tax rules. We also find that firms adjusted their distribution policy (specifically, dividends versus share repurchases) in a manner consistent with the altered tax incentives for individual investors. To our knowledge, this is the first study to employ simultaneous equations to estimate both shareholder and managerial responses to the 2003 rate reductions. We find that the generalized method of moments (GMM) estimates are substantially stronger than OLS estimates, consistent with our expectation that investor and manager responses are simultaneously determined. Failure to estimate systems of equations may account for some of the weak and conflicting results from prior studies of the 2003 rate reductions.
Mendelian cardiomyopathies and arrhythmias are characterized by an important genetic heterogeneity, rendering Sanger sequencing very laborious and expensive. As a proof of concept, we explored ...multiplex targeted high‐throughput sequencing (HTS) as a fast and cost‐efficient diagnostic method for individuals suffering from Mendelian cardiac disorders. We designed a DNA capture assay including all exons from 130 genes involved in cardiovascular Mendelian disorders and analysed simultaneously four samples by multiplexing. Two patients had familial hypertrophic cardiomyopathy (HCM) and two patients suffered from long QT syndrome (LQTS). In patient 1 with HCM, we identified two known pathogenic missense variants in the two most frequently mutated sarcomeric genes MYH7 and MYBPC. In patient 2 with HCM, a known acceptor splice site variant in MYBPC3 was found. In patient 3 with LQTS, two missense variants in the genes SCN5A and KCNQ were identified. Finally, in patient 4 with LQTS a known missense variant was found in MYBPC3, which is usually mutated in patients with cardiomyopathy. Our results showed that multiplex targeted HTS works as an efficient and cost‐effective tool for molecular diagnosis of heterogeneous disorders in clinical practice and offers new insights in the pathogenesis of these complex diseases.
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