이익조정에 대한 재무보고비용과 세금비용의 상충관계에 대한 연구 = A Study on the Trade-Offs between Financial Reporting Costs and Tax Costs in Earnings Management

다국어 초록 (Multilingual Abstract)

The prior studies on earnings management have focused on the incentives and the accruals of earnings management. However, in the case of assuming managers maximize firm value, the earnings of managers is likely to be equivalent with their efforts to maximize firm values. Therefore, in addition to the prior studies on earnings management, we need to consider the costs induced by this management. If the managers are rational decision makers, they will consider not only the benefits of the earnings management but also the costs of the earnings management and then decide the magnitude of it. However, prior studies on earnings management have dealt only with the benefits of earnings management but haven`t dealt with the costs explicitly. Therefore, to understand the managers` earnings management accurately, we need to consider the costs of the earnings management, as well as the benefits of it. This is equivalent to the Sholes-Wolfson`s paradigm that, in tax planning, to minimize the tax costs, non-tax costs must be necessarily considered. The empirical results are as follows. Assuming that the earnings management is induced by financial reporting costs and its costs are tax costs, managers manage earnings after considering tax costs as well as financial reporting costs. This means that the costs of earnings management, which has never been considered explicitly in prior studies, is related to the earnings management directly and there is an inverse relation between financial reporting costs and tax costs in earnings management. Therefore, we conclude that earnings management is the managers` decision-making based on incentives and costs simultaneously.