Book-tax differences and rating: analysis in pre and post-IFRS periods
Keywords:
Rating. Book-Tax Differences. Earnings management. IFRS.
Abstract
The study aims to verify the relationship between the Book-Tax Differences (BTD) and the rating notes in the pre and post-adoption periods of the International Financial Reporting Standards (IFRS). The sample is made up of 3,737 separate from publicly-held companies in 54 countries, covering the period from 2001 to 2016. Through logistic regression, all types of BTD (total, positive, negative, abnormal, normal, permanent and temporary) are tested, in nominal values and segregated by high and low quintiles. The results obtained that BTD has useful informational content for rating agencies in their credit risk assessments. Specifically, in the Pre-IFRS period, lower BTD has no effect on the rating, suggesting that rating agencies considered, during this period, that greater compliance between accounting and taxable income would not offer risk to investors. The temporary BTD, after the adoption of IFRS, showing a negative relationship with the rating, implying in the rating agencies penalizing as companies with higher temporary BTD. This may occur due to the greater loopholes that the accounting choices, inherent to IFRS, can generate in terms of earnings management, which may represent a greater risk for rating agencies in identifying the discretionary portion of BTD. The results of the study contribute to the debate on these accounting choices and financial and fiscal compliance, insofar as it shows that a user of accounting information (rating agencies) penalizes as companies that have a higher temporary BTD because they consider that these can be derived from greater result management and, therefore, may represent risk for the investor.
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References
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HEALY, P. M.; PALEPU, K. G. Information asymmetry, corporate disclosure, and the capital markets: a review of the empirical disclosure literature. Journal of Accounting and Economics. v. 31. p.405-440, 2001.
HEALY, P. M.; WAHLEN, J. M. A Review of the Earnings Management Literature and Its Implications for Standard Setting. Accounting Horizons, v. 13, n. 4, p. 365–383, 1999. Doi: https://doi.org/10.2308/acch.1999.13.4.365.
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KARAMPINIS, N. I.; HEVAS, D. L. Effects of IFRS adoption on tax-induced incentives for financial earnings management: evidence from Greece. The International Journal of Accounting, 48(2), 218-247, 2013. Doi: https://doi.org/10.1016/j.intacc.2013.04.003.
KIM, H.; GU, Z. Financial Determinants of Corporate Bond Ratings: An Examination of Hotel and Casino Firms. Journal of Hospitality and Tourism Research, v. 28, n. 1, p. 95–108, 2004. Doi: https://doi.org/10.1177/1096348003261217.
KIM, Y. S.; KIM, Y.; SONG, K. R. Credit Rating Changes and Earnings Management. Asia Pacific Journal of Financial Studies, v 42, p. 109 –140, 2013. Doi:10.1111/ajfs.12007.
KISGEN, D. J. Credit Ratings and Capital Structure. The Journal of Finance, v 61, p. 1035–1072, 2006. Doi: https:// http://doi.org/10.1111/j.1540-6261.2006.00866.x.
JENSEN, M. C.; MECKLING, W. H. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, v. 3, n. 4, p. 305–360, 1976. Doi: https://doi.org/10.1016/0304-405X(76)90026-X.
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SHACKELFORD, D. A.; SLEMROD, J.; SALLEE, J. M. Financial reporting, tax, and real decisions: Toward a unifying framework. International Tax and Public Finance, v. 18, n. 4, p. 461–494, 2011. Doi: 10.1016/j.jacceco.2010.10.001.
SHENG, H. H. Ensaios sobre emissões de corporate bonds (debêntures) no mercado brasileiro. 2005, 92 f. Tese (Doutorado em administração de empresas) - Escola de Administração de Empresas de São Paulo da Fundação Getulio Vargas, 2005.
SILVA, E. S.; SANTOS, J. F.; ALMEIDA, M. A. Os efeitos dos mecanismos de Governança Corporativa sobre os ratings de crédito das Debêntures. Revista de Negócios, Blumenau, v.17, n.3, p. 80-93, 2012. Doi: n/d.
SOARES, G. O. G.; COUTINHO, E. S.; CAMARGOS, M. A. Determinantes do Rating de Crédito de Companhias Brasileiras. Contabilidade Vista & Revista, 23(3), 109-143, 2012. Doi: https://doi.org/10.1017/CBO9781107415324.004.
SOUZA, F. E., LEMES, S. Comparability of accounting choices in subsequent measurement of fixed assets, intangible assets, and investment property in South American companies. Revista Contabilidade e Finanças, 27(71), 169-184, 2016. Doi: http://dx.doi.org/10.1590/1808-057x201501480.
TANG, T. Y. H. Does book-tax conformity deter opportunistic book and tax reporting? An international analysis. European Accounting Review, 24(3), 441-469, 2015. Doi: http://dx.doi.org/10.1080/09638180.2014.932297.
ATWOOD, T. J., DRAKE, M. S., MYERS, J. N., & MYERS, L. A. Home country tax system characteristics and corporate tax avoidance: international evidence. The Accounting Review, 87(6), 1831-1860, 2012. Doi: https://doi.org/10.2308/accr-50222.
BLAYLOCK, B.; GAERTNER, F. B.; SHEVLIN, T. Book-tax conformity and capital structure. Review of Accounting Studies, 2017. Doi: 10.1007/s11142-017-9386-2.
BOUZOUITA, R.; YOUNG, A. J. A Probit Analysis of Best Ratings. Journal of Insurance Issues, v. 21, n. 1, p. 23–34, 1998. Doi: n/d.
BRAGA, R. N. Efeitos da adoção das IFRS sobre o tax avoidance. Revista de Contabilidade & Finanças. São Paulo, v. 28, n. 75, p. 407-424, set./dez. 2017. Doi: 10.1590/1808-057x201704680.
BROWN, L. D. CAYLOR, M. L. Temporal Analysis of Quarterly Earnings Thresholds: Propensities and Valuation Consequences. The Accounting Review, Vol. 80, No. 2 pp. 423-440, 2005. Doi: n/d.
CALLADO, A. A. C.; VASCONCELOS, M. M. F. RODRIGUES, R. N. LIBONATI, G. O impacto da primeira emissão de conceito de risco de crédito sobre o preço das ações: um estudo empírico sobre a reação do mercado acionário brasileiro para o setor bancário. Revista Ciências Administrativas. Fortaleza, v. 14, n. 1, p. 80-88, ago. 2008. Doi: n/d.
CHAN, K. H.; LIN KENNY Z., K. Z.; MO, P. L. L. Will a departure from tax-based accounting encourage tax noncompliance? Archival evidence from a transition economy. Journal of Accounting and Economics, v. 50, n. 1, p. 58–73, 2010. Elsevier. Doi: http://dx.doi.org/10.1016/j.jacceco.2010.02.001.
CHEN, E.; GAVIOUS, I. The roles of book-tax conformity and tax enforcement in regulating tax reporting behaviour following International Financial Reporting Standards adoption. Accounting and finance, 2015. Doi://dx.doi.org/10.1111/acfi.12172.
COMPRIX, J.; GRAHAM, R. C.; MOORE, J. A. Empirical Evidence on the Impact of Book-Tax Differences on Divergence of Opinion among Investors. The Journal of the American Taxation Association, v. 33, n. 1, p. 51–78, 2011. Doi: https://doi.org/10.2308/jata.2011.33.1.51.
COSTA, P. S; LOPES, A. B. Implicações da adoção das IFRS sobre as book-tax differences: O caso do Brasil. 1. ed. Alemanhã: Novas Edições Acadêmicas, 2015.
CRABTREE, A.; MAHER, J. J. The Influence of Differences in Taxable Income and Book Income on the Bond Credit Market. The Journal of the American Taxation Association, v. 31, n. 1, p. 75–99, 2009. Doi: https://doi.org/10.2308/jata.2009.31.1.75.
DAFYDD, M.; JONG-SEO, C. Does Earnings Management Influence Credit Rating Changes in Subsequent Periods?: An Analysis of KRX Firms. Korea International Accounting Review. v 67, 2016. Doi: http://dx.doi.org/10.21073/kiar/2016..67.001.
DAMASCENO, D. L.; ARTES, R.; MINARDI, A. M. A. Determinação de rating de crédito de empresas brasileiras com a utilização de índices contábeis. Revista da Administração, v. 43, n. 4, p. 344–355, 2008. Doi: n/d.
DANTAS, J. A.; PAULO, E.; MEDEIROS, O. R. DE. Conditional Conservatism in the Brazilian Banking Industry in Situations of Higher Risk Perception. Revista Universo Contábil, p. 83–103, 2013. Doi: https://dx.doi.org/10.4270/ruc.2013214.
DEMIRTAS, K. O.; CORNAGGIA, K. R. Initial credit ratings and earnings management. Review of Financial Economics, v 22, 2013. Doi: http://dx.doi.org/10.1016/j.rfe.2013.05.003.
DESAI, M. The degradation of corporate profits. Journal of Economic Perspectives. v. 19, n. 4, p. 171–192, 2005. Doi: https://doi.org/10.2307/2225251.
FÁVERO, L. P. BELFIORE, P. Análise de dados: estatística e modelagem multivariada com Excel, SPSS e Stata. 1 ed. Elsevier, São Paulo, 2017.
FRANK, M. M; LYNCH, L. J.; REGO, S. O. Tax Reporting Aggressiveness and Its Relation to Aggressive Financial Reporting. The Accounting Review, v. 84, p. 467-496, 2009. Doi: http://dx.doi.org/10.2139/ssrn.647604.
GOMES NETO, J. T. Determinantes do rating de instituições financeiras: uma análise em países emergentes e não emergentes, 2017, 105 f. Dissertação (Mestrado em Ciências Contábeis) - Programa de Pós-Graduação em Ciências Contábeis da UnB. 2017.
GRAY, S.; MIRKOVIC, A.; RAGUNATHAN, V. The Determinants of Credit Ratings: Australian Evidence. Australian Journal of Management, v. 31, n. 2, p. 333–354, 2006. Doi: https://doi.org/10.1177/031289620603100208.
HEALY, P. M.; PALEPU, K. G. Information asymmetry, corporate disclosure, and the capital markets: a review of the empirical disclosure literature. Journal of Accounting and Economics. v. 31. p.405-440, 2001.
HEALY, P. M.; WAHLEN, J. M. A Review of the Earnings Management Literature and Its Implications for Standard Setting. Accounting Horizons, v. 13, n. 4, p. 365–383, 1999. Doi: https://doi.org/10.2308/acch.1999.13.4.365.
IFRS. Adoção das IFRS, 2018. Disponível em: https://www.ifrs.org/use-around-the-world/use-of-ifrs-standards-by-jurisdiction/. Acesso em: janeiro de 2018.
KARAMPINIS, N. I.; HEVAS, D. L. Effects of IFRS adoption on tax-induced incentives for financial earnings management: evidence from Greece. The International Journal of Accounting, 48(2), 218-247, 2013. Doi: https://doi.org/10.1016/j.intacc.2013.04.003.
KIM, H.; GU, Z. Financial Determinants of Corporate Bond Ratings: An Examination of Hotel and Casino Firms. Journal of Hospitality and Tourism Research, v. 28, n. 1, p. 95–108, 2004. Doi: https://doi.org/10.1177/1096348003261217.
KIM, Y. S.; KIM, Y.; SONG, K. R. Credit Rating Changes and Earnings Management. Asia Pacific Journal of Financial Studies, v 42, p. 109 –140, 2013. Doi:10.1111/ajfs.12007.
KISGEN, D. J. Credit Ratings and Capital Structure. The Journal of Finance, v 61, p. 1035–1072, 2006. Doi: https:// http://doi.org/10.1111/j.1540-6261.2006.00866.x.
JENSEN, M. C.; MECKLING, W. H. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, v. 3, n. 4, p. 305–360, 1976. Doi: https://doi.org/10.1016/0304-405X(76)90026-X.
LIMA, F. G; FONSECA, C. V. C.; SILVEIRA, R. L. F.; ASSAF NETO, A. Os Determinantes dos Ratings de Crédito dos Bancos Brasileiros. Revista de Administração Contemporânea, v 22, 2018. Doi: http://dx.doi.org/10.1590/1982 -7849rac2018160373.
LOPES, A. B.; MARTINS, E. Teoria da Contabilidade: uma nova abordagem. São Paulo: Atlas, 2005.
MARTINEZ, A. L.; PASSAMANI, R. R. Book-tax differences e sua relevância informacional no mercado de capitais no brasil. Revista de Gestão, Finanças e Contabilidade, ISSN 2238-5320, UNEB, Salvador, v. 4, n. 2, p. 20-37, maio./ago., 2014. Doi: http://dx.doi.or/10.180828/rgfc.v4i2.615.
MIILLER, D.; MARTINEZ, A. Book-Tax Difference, Earnings Management and Bond Ratings in the Brazilian Market. Revista Universo Contábil, p. 91–109, 2016. Doi: https://doi.org/10.4270/ruc.2016323.
MURCIA, F. C. S. Rating de crédito no brasil: Fatores Determinantes e Impacto de Anúncios nos Preços das Ações. 2013, 155 f. Tese (Doutorado em Administração) - Universidade Federal de Santa Catarina, 2013.
MURCIA, F. C.; MURCIA, F. D. R.; ROVER, S.; BORBA, J. A. The determinants of credit rating: Brazilian evidence. BAR - Brazilian Administration Review, v. 11, n. 2, p. 188–209, 2014. Doi: http://dx.doi.org/10.1590/S1807-76922014000200005.
NARDI, P. C. C.; NAKAO, S. H. Gerenciamento de resultados e a relação com o custo da dívida das empresas brasileiras abertas. Revista Contabilidade & Finanças, v. 20, n. 51, p. 77–100, 2009. Doi: http://dx.doi.org/10.1590/S1519-70772009000300006.
SCOTT, W. R. Financial Accounting Theory. Toronto: Pearson, 2009.
S&P GLOBAL. Ratings de Crédito nas Escalas Nacionais e Regionais, 2014. Disponível em:
SHACKELFORD, D. A.; SLEMROD, J.; SALLEE, J. M. Financial reporting, tax, and real decisions: Toward a unifying framework. International Tax and Public Finance, v. 18, n. 4, p. 461–494, 2011. Doi: 10.1016/j.jacceco.2010.10.001.
SHENG, H. H. Ensaios sobre emissões de corporate bonds (debêntures) no mercado brasileiro. 2005, 92 f. Tese (Doutorado em administração de empresas) - Escola de Administração de Empresas de São Paulo da Fundação Getulio Vargas, 2005.
SILVA, E. S.; SANTOS, J. F.; ALMEIDA, M. A. Os efeitos dos mecanismos de Governança Corporativa sobre os ratings de crédito das Debêntures. Revista de Negócios, Blumenau, v.17, n.3, p. 80-93, 2012. Doi: n/d.
SOARES, G. O. G.; COUTINHO, E. S.; CAMARGOS, M. A. Determinantes do Rating de Crédito de Companhias Brasileiras. Contabilidade Vista & Revista, 23(3), 109-143, 2012. Doi: https://doi.org/10.1017/CBO9781107415324.004.
SOUZA, F. E., LEMES, S. Comparability of accounting choices in subsequent measurement of fixed assets, intangible assets, and investment property in South American companies. Revista Contabilidade e Finanças, 27(71), 169-184, 2016. Doi: http://dx.doi.org/10.1590/1808-057x201501480.
TANG, T. Y. H. Does book-tax conformity deter opportunistic book and tax reporting? An international analysis. European Accounting Review, 24(3), 441-469, 2015. Doi: http://dx.doi.org/10.1080/09638180.2014.932297.
Published
2022-05-03
How to Cite
Barbosa, J. da S., & de Souza Costa, P. (2022). Book-tax differences and rating: analysis in pre and post-IFRS periods. Enfoque: Reflexão Contábil, 41(2), 63-85. https://doi.org/10.4025/enfoque.v41i2.54498
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