Does a common set of accounting standards affect tax-motivated income shifting for multinational firms?

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dc.contributor.advisorMills, Lillian F.
dc.creatorDe Simone, Lisa Nicoleen
dc.date.accessioned2013-10-25T17:53:14Zen
dc.date.accessioned2017-05-11T22:35:14Z
dc.date.available2017-05-11T22:35:14Z
dc.date.issued2013-05en
dc.date.submittedMay 2013en
dc.date.updated2013-10-25T17:53:15Zen
dc.descriptiontexten
dc.description.abstractI examine an unintended consequence of countries permitting or requiring a common set of accounting standards for unconsolidated financial reporting. Specifically, I test whether adoption of IFRS facilitates income tax-motivated profit shifting by multinational entities (MNEs). MNEs often justify transfer prices to tax authorities by benchmarking intercompany profit allocations against a range of profit rates reported by economically comparable, independent firms that use similar accounting standards. A larger set of qualifying benchmark firms resulting from IFRS adoption could allow opportunistic managers to support more tax-advantaged transfer prices. I use a database of EU unconsolidated financial and ownership information to identify tax-motivated income shifting over 2001 to 2010. I estimate a statistically and economically significant 17.5 percent tax-motivated change in reported pre-tax profits following affiliate IFRS adoption, relative to no change in income shifting behavior for non-adopters. The magnitude of this effect increases in expansions to the set of potential benchmark firms upon affiliate IFRS adoption.en
dc.description.departmentAccountingen
dc.format.mimetypeapplication/pdfen
dc.identifier.urihttp://hdl.handle.net/2152/21764en
dc.language.isoen_USen
dc.subjectInternationalen
dc.subjectIFRSen
dc.subjectTaxen
dc.subjectIncome shiftingen
dc.titleDoes a common set of accounting standards affect tax-motivated income shifting for multinational firms?en

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