The impact of tax optimization and temporary differences on earnings management: The case of Vietnam

  • Nguyen Dieu Linh
  • Hoang Thi Thu
Từ khóa: deferred income tax deferred tax assets earning management difference between accounting and taxable profit tax optimization

Tóm tắt

The purpose of this paper is to study the effects of tax optimization strategies used by Vietnamese companies for earning management through
the use of temporary difference between accounting and taxable profit.
Following the model of Cindy (2021), we leverage quantitative methods,
built models and tested the impact of 08 factors on earning management
(EM), tax optimization (ETR), deferred tax asset (DTA), deferred tax liability
(DTL), deferred tax expense (DTE), company size (SIZE), financial leverage
(LEV), return on assets (ROA), cash flow from operating activities (CFO).
The sample we selected were 113 industrial enterprises operating in multiple sectors listed on the Vietnam Stock Exchange in the period between
2016-2020. Empirical results our sample have shown that earning management (EM) may be affected by DTA, ROA, cash flow from operating activities, and financial leverage under various motives. This study also aims at
illustrating that other indicators relating to differences between accounting and taxable profit do not leave any remarkable impacts on the model.
This means that enterprises operating in the industrial sector do not use or
rarely use those indicators to implement EM Sapo

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