The Effects of Financial Reporting Standards on Tax Avoidance and Earnings Quality: A Case of an Emerging Economy

Authors

  • Mohammed Amidu University of Ghana Business School, Ghana
  • Sally Mingle Yorke University of Ghana Business School, Ghana
  • Simon Harvey University of Ghana Business School, Ghana

Keywords:

Accounting, Finance, IFRS, Tax, Economics

Abstract

This paper analyses the implications of adoption of International Financial Reporting Standards (IFRS) for accounting information quality and tax avoidance. It employs a sample of 119 firms after the implementation of IFRS to test for two related hypotheses. First, IFRS reduces the incidence of tax avoidance as the level of earnings quality increases when firms use internal funding to increase their profitability levels. Building on these results, the second test suggests that the relatively high quality earnings and low incidence of tax avoidance among firms in Ghana is attributed to the adoption of IFRS and the interaction of firm size to equity capital and the strategy of firms in Ghana to finance their operations with debt.

Downloads

Published

2019-03-12

How to Cite

Amidu, M., Yorke, S. M., & Harvey, S. (2019). The Effects of Financial Reporting Standards on Tax Avoidance and Earnings Quality: A Case of an Emerging Economy. Journal of Accounting and Finance, 16(2). Retrieved from https://articlegateway.com/index.php/JAF/article/view/1013

Issue

Section

Articles