Analysis Of Corporate Accounting Behavior Based On Book-tax Difference

Accounting and Taxation, as two different branches in economic systems, are inextricably linked. Historically, the relationship between accounting system and tax code has undergone the process of "unification---separation---coordination". The inevitable differences between the accounting system and the tax code caused by the separation between them in current China, resulting from the disagreement between formulating purposes, observing assumptions and applying rules, are named Book-tax Difference, thus acquiring the characteristics of naturalness and incurability. The two systems has experienced different changes to comply with the economic development, and with the implementation of New Corporate Accountancy Standard in 2007 and the New Corporate Income Tax in 2008, the differences between them has been increasingly intensified.The Book-tax Difference, undoubtedly, will result in the discrepancy between data of accounting profits in the accounting statements and those of taxable income in the tax return, and thus the dilemma between the benefits in the financial reporting and income tax bearing of the corporation as a rational economic participant. Consequently, to fulfill the motivation of corporate earnings management or income tax avoidance, it is necessary for the corporate to choose the accounting behavior to its advantage after weighing cost and benefit for the sake of its profit-gaining requirements. Furthermore, the Book-tax Difference makes it possible for the accounting behavior choices with different motivations as wellUnder the dual-influence of institutional discrepancy and corporate accounting behavior choice, the growing Book-tax Difference will effect the coordination and cooperation between accounting system and tax code, undermine the validity and usefulness of the accounting report, astray the taxation supervision, and consequently exert losses to the national public finance and taxation. Therefore, measures are supposed to be taken to narrow the Book-tax Difference of enhancing the coordination between accounting system and tax code, improving the administrative structure of the listed company, and strengthening anti-tax avoidance.This thesis, taking the New Corporate Accountancy Standard in 2007 and the New Corporate Income Tax in 2008 into account, adopting the perspective of cost-benefit rule of accounting behavior choice, employing the approaches of prescriptive study and case study, and based on institutional discrepancy between the New Standard the New Tax, explores the different accounting behaviors with different corporate motivations in context. The research observes that the growing discrepancy with the implementation of the New Standard and the New Tax is beneficial to the corporate accounting choice. In order to achieve its various kinds of purposes, such as sharing-rationing, supplemented issuance of new equity, turning from deficits to profit, or income tax avoidance, it will take maximum advantage of the Difference to choose accounting behavior to its advantage, intensifying the Book-tax Difference. The thesis, to some extent, may serve as an assistant in indentifying the corporate accounting behavior concerning the Book-tax Difference, as a reference for decision-making involving institutions on coordination between accounting and taxation, and shedding some light on the supervision of earnings management and the study of anti-tax avoidance.