Tax Avoidance and Asymmetric Behavior of Costs

Iranian Journal of Accounting, Auditing and Finance

مقاله 3، دوره 1، شماره 1، اردیبهشت 2017، صفحه 39-51   

نوع مقاله: Accounting

شناسه دیجیتال (DOI): 10.22067/ijaaf.v1i1.67392

نویسندگان

Roya Darabi^* ؛ Mohammad Zamani

Department of Accounting, College of Management and Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran

چکیده

The purpose of this study is to investigate the relationship between tax avoidance and asymmetric costs (cost stickiness). Generally, shareholders expect managers to pursue their personal interests, so they attempt to reduce tax liabilities and tax avoidance, because additional benefits of reducing contingent liabilities are more than the expected additional costs. Managers of a company often face issues such as planning and control of the business. In the planning stage, managers need costs information to predict future costs. Since changes in future costs can be determined based on the sales revenue changes, the amount of spending and costs can be predicted based on their relations with this factor. The results of hypothesis testing of 112 listed companies on Tehran Stock Exchange during 2006-2015 showed that tax avoidance has a positive and significant relationship with the costs changes at the time of falling sales. In addition, when there is a fluctuation in cash flow, tax avoidance has a negative and significant relationship with costs changes.

کلیدواژه‌ها

Tax avoidance؛ Tax؛ Cost behavior؛ Cost stickiness

مراجع

Arabsalehi, M., and Hashemi, M. (2015). The Effect of Managerial
Overconfidence on Tax Avoidance. The Iranian Accounting and Auditing
Review, 22 (1), pp. 85-104, DOI: 10.22059/ACCTGREV.2015.53669.
Banker, R. D., Byzalov, D. and Chen, L (2013). Employment Protection
Legislation, Adjustment Costs and Cross-country Differences in Cost
Behavior. Journal of Accounting and Economics, 55 (1), pp. 111-127,
DOI: 10.1016/j.jacceco.2012.08.003.
Calleja, K., Steliaros, M and Thomas, D. (2006). A Note on Cost Stickiness:
Some International Comparisons. Management Accounting Research, 17
(2), pp. 127- 140, DOI: 10.1016/j.mar.2006.02.001.
Chen, S., Chen, X., Cheng, Q., and Shevlin, T. (2010). Are family firms
more tax aggressive than non-family firms? Journal of Financial
Economics, 95 (1), pp. 41–61, DOI: 10.1016/j.jfineco.2009.02.003.
Desai, M., Dharmapala, D., and Fung, W. (2007). Taxation and the
evolution of aggregate corporate ownership concentration in: Auerbach,
A., Hines, J., Slemrod, J (Eds.), Taxing Corporate Income in the 21st
Century.Cambridge University Press, New York, pp. 345–383, DOI:
10.3386/w11469.
Desai, M., Dyck, I., and Zingales, L. (2007). Theft and taxes. Journal of
50 Iranian Journal Of Accounting, Auditing & Finance
Financial Economics, 84 (3), pp. 591–623,
http://www.sciencedirect.com/science/article/pii/S0304-405X (07)00032-
3
Graham, J., and Tucker A. (2006). Tax shelters and corporate debt policy.
Journal of Financial Economics, 81 (3), pp. 563–594, DOI:
10.1016/j.jfineco.2005.09.002.
Hanlon, M., and Heitzman, S. (2010). A review of tax research. Journal of
Accounting and Economics, 50 (2-3), PP. 127–178, DOI:
org/10.1016/j.jacceco.2010.09.002.
Harlib, D., and loui, S. (2016). Are “Tax aggressive” firms just inflating
earnings? Working paper, University of Oregon, DOI:
10.2139/ssrn.2409688.
Hilton, R. W. (1997). Managerial Accounting. (3rd ed) McGraw-Hill
international editions.https://www.abebooks.com/servlet/BookDetailsPL?
bi=1071870836&searchurl=&cmtrack_data=cm_abecat%3D100200045.
Horngren, C. T., Sundem, G. L., Stratton, W. O., Burgstahler, D., and
Schatzberg, J. (2008). Introduction to management accounting (14th ed).
Pearson: Prentice Hall. ISBN: 0-13-240569-5,
https://www.pearson.com/us/ higher-education /product/ Horngren –
Introduction -to-Management- Accounting- Chapters-1-17-14th-Edition
/9780136129219.html
Jensen, M. C., and Meckling, W. H. (1976). Can the corporation survive?
Graduate School of Management, Center for Research in Government
Policy and Business, University of Rochester. (DOI):
10.2139/ssrn.244156
Khaki, G. R. (2003). The research method, approach the end of a program.
Tehran, Ministry of Culture and Higher Education, (1st ed) Scientific
Research Center, Institute for Publishing Derayat, p 430.
http://ut.ac.ir/en/page/707/research-institute-of-culture-art-ric.
Marques, A., Santos, C and Costa, P. (2014). Cost Stickiness in Latin
American Open Companies from 1997 to 2012. European Scientific
Journal, special edition, pp. 1857- 7431, DOI: 10.1038/embor.2009.134.
Namazi, M. and Davani Pour, I. (2010). Experimental Examination of Cost
Cohesion Behavior in Tehran Stock Exchange. Accounting Review, 17
(62), pp. 85-102, DOI: 10.5923/j.ijfa.20170603.03.
Namazi, M. and Kermani, E. (2008). Effect of Ownership Structure On the
Performance of Companies Listed on the Tehran Stock Exchange.
Accounting Reviews, 15 (53), pp. 83-100, DOI:
Tax Avoidance and Asymmetric Costs Behavior 51
https://acctgrev.ut.ac.ir/article_27754_1935.html.
Noravesh, I., and SadegianAjiri, G. (1999). Research on the information
content of accounting numbers in internal reporting. Reviews of
Accounting and Auditing, 2 (26/27), pp. 134-144,
https://acctgrev.ut.ac.ir/article_14473.html.
Noreen, E., and Soderstrom, N. (1997). The accuracy of proportional cost
models: Evidence from hospital service departments. Review of
Accounting Studies, 2 (1), pp. 89–114, DOI:
org/10.1023/A:1018325711417.
Rego, S., and Wilson R. (2012). Equity risk incentives and corporate tax
aggressiveness. Journal of Accounting Research, 50 (3), pp. 775–810,
http://hdl.handle.net/10.1111/j.1475-679X.2012.00438.
Taxation Affairs Organization, the strategic plan. (2013). Tehran, the State
Tax Administration support. http://docplayer.net/16286176-Tax-
administration-modernization-challenges-and-strategic-priorities.html.
Weiss, D. (2010). Cost behavior and analysts’ earnings forecasts.
Accounting Review, 85 (4), pp. 1441–1471, DOI:
10.2308/accr.2010.85.4.1441.
Wilson, R. (2009). An examination of corporate tax shelter participants. The
Accounting Review, 84 (3), pp. 969–999, DOI:
org/10.2308/accr.2009.84.3.969.
Xue, Sh., and Hong, Y. (2016). Earnings management, corporate
governance and expense stickiness China. Journal of Accounting
Research, 9 (1), pp. 41-58, DOI: 10.1016/j.cjar.2015.02.001
Zanjirdar, M., Ghafari Ashtiani, P., and Madahi, Z. (2014). Analysis of
factors affecting the stickiness behavior of cost. Management Accounting
Quarterly, 7 (20), pp. 79-91,
http://fa.journals.sid.ir/ViewPaper.aspx?id=215207.