The Research On Book-Tax Difference And Its Influencing Factors

Because the relation between accounting principles and tax laws inclines to separation pattern in China, it has difference between accounting profits and taxable income consequentially. The book-tax difference is inherent, but at the same time, it provides space for firms’earnings management and income tax dodging. Because of the book-tax difference, firms do not need to pay income tax for illusory profits consequentially. In fact, plenty of firms pay little or nothing. Therefore, it becomes a remarkable problem that how to recognize and deal with book-tax difference correctly. The purpose of this thesis is to analyze the book-tax difference and their influencing factors, and the correlation between them.This thesis does research on the influence factors of book-tax-difference theoretically and empirically. The main components of this thesis are as follows:Part one is the introduction. This part mainly introduces the background, significance, research method and components of the paper. Then this thesis takes a retrospect on the current home and abroad research achievement in this field, and makes a simple comment on them. Finally, the text illustrates the contribution.Part two is the theoretical basis. This part makes a theoretical analysis mainly from three aspects, namely institutional factor that influences book-tax-difference, earnings management factors and tax avoidance. Firstly, this thesis introduces the background of book-tax-difference and development history of separation modes of accounting principles and taxation laws from institution angle, illustrates the treatment of income tax under the current accounting principles. Then this thesis proposes that institution factor is the main cause of book-tax-difference. Secondly, the thesis makes theoretical analysis from the angle of earnings management behavior. It introduces the motivation and measuring method of earnings management. All above is the theoretical basis of empirical research on the relationship between book-tax-difference and earnings management behavior. Part three is the research design. Firstly, on the basis of theories in Part2, the thesis put forwards the hypothesis. Secondly, the text introduces the model used in the analysis. Thirdly, the text introduces the variables definition (dependent variable, independent variables and control variables). Finally, the paper illustrates the sample selection and data resources.Part four is the empirical analysis. This part provides the descriptive statistics analysis, correlation analysis and multiple regression analysis, then displays and analyzes the results. The results show that institution factor, earnings management behavior and tax avoidance have significant relationship with book-tax-difference, which shows that earnings management behavior based on the motivation of financial report and that based on the motivation of tax both exist in the listed companies.Part five is the conclusion and prospect. According to the theories and conclusions, the thesis puts forward related policies and suggestions. First, control the institutional factor by strengthening the cooperation of accounting principles and taxation laws. Second, to control earnings management and tax avoidance behavior which form the book-tax difference.The studies of this thesis have significant theoretical meanings that help to deepen the study extent of differences between accounting principles and tax laws, as well as to widen the study field of earnings management. They also have significant practical meanings in enhancing the cooperation of accounting principles and tax laws, leading listed companies’earning management to a reasonable mode, making the disclosure more transparent.