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Incentives for Tax Planning and Avoidance: Evidence from the field

Publication ,  Journal Article
Graham, JR; Hanlon, M; Shevlin, T; Shroff, N
Published in: Accounting Review
January 1, 2014

We analyze survey responses from nearly 600 corporate tax executives to investigate firms' incentives and disincentives for tax planning. While many researchers hypothesize that reputational concerns affect the degree to which managers engage in tax planning, this hypothesis is difficult to test with archival data. Our survey allows us to investigate reputational influences and, indeed, we find that reputational concerns are important-69 percent of executives rate reputation as important and the factor ranks second in order of importance among all factors explaining why firms do not adopt a potential tax planning strategy. We also find that financial accounting incentives play a role. For example, 84 percent of publicly traded firms respond that top management at their company cares at least as much about the GAAP ETR as they do about cash taxes paid and 57 percent of public firms say that increasing earnings per share is an important outcome from a tax planning strategy.

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Published In

Accounting Review

DOI

ISSN

0001-4826

Publication Date

January 1, 2014

Volume

89

Issue

3

Start / End Page

991 / 1023

Related Subject Headings

  • Accounting
  • 3502 Banking, finance and investment
  • 3501 Accounting, auditing and accountability
  • 1501 Accounting, Auditing and Accountability
 

Citation

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Graham, J. R., Hanlon, M., Shevlin, T., & Shroff, N. (2014). Incentives for Tax Planning and Avoidance: Evidence from the field. Accounting Review, 89(3), 991–1023. https://doi.org/10.2308/accr-50678
Graham, J. R., M. Hanlon, T. Shevlin, and N. Shroff. “Incentives for Tax Planning and Avoidance: Evidence from the field.” Accounting Review 89, no. 3 (January 1, 2014): 991–1023. https://doi.org/10.2308/accr-50678.
Graham JR, Hanlon M, Shevlin T, Shroff N. Incentives for Tax Planning and Avoidance: Evidence from the field. Accounting Review. 2014 Jan 1;89(3):991–1023.
Graham, J. R., et al. “Incentives for Tax Planning and Avoidance: Evidence from the field.” Accounting Review, vol. 89, no. 3, Jan. 2014, pp. 991–1023. Scopus, doi:10.2308/accr-50678.
Graham JR, Hanlon M, Shevlin T, Shroff N. Incentives for Tax Planning and Avoidance: Evidence from the field. Accounting Review. 2014 Jan 1;89(3):991–1023.

Published In

Accounting Review

DOI

ISSN

0001-4826

Publication Date

January 1, 2014

Volume

89

Issue

3

Start / End Page

991 / 1023

Related Subject Headings

  • Accounting
  • 3502 Banking, finance and investment
  • 3501 Accounting, auditing and accountability
  • 1501 Accounting, Auditing and Accountability