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Title: The implementation of IAS 12 : income taxes in Greece: evidence on compliance value relevance and discretionary use of deferred taxation
Author: Samara, Aggeliki D.
Awarding Body: University of Surrey
Current Institution: University of Surrey
Date of Award: 2013
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The implementation of International Financial Reporting Standards (IFRS) aimed at providing higher quality financial statements has undoubtedly been one of the most critical changes in the field of accounting in the European Union (EU). However, under the presence of incentives for earnings management, the adoption of high-quality accounting standards may not provide an adequate set of conditions for the improved quality of financial reporting (Ball et al. , 2003; Holthausen, 2003, Kothari et al., 2010). The present thesis examines the adoption of IAS 12: Income Taxes in Greece, which is a country that does not offer the ideal conditions for the implementation of , quality accounting standards (Li, 2010). The research analysis examines (a) the level of compliance with the disclosure requirements of IAS 12 and the associated factors that affect it, (b) the value relevance of tax components and (c) the likely discretionary use of deferred tax components for earnings management purposes in Greece. The results of the thesis reveal a number of interesting findings . First, the level of conformity to IAS 12 by Greek companies is increasing and seems to be affected by firm characteristics. To be specific, growth, auditing firm (Big4 vs. non-Big4) and size are useful in explaining changes in the level of conformity, while leverage and profitability are also useful; however, only for some of the disclosures. Second, tax components seem to be value relevant. Current tax is significant under every research setting examined and has a positive coefficient, while net deferred tax liabilities are significant and have a negative coefficient. On the other hand, the results on deferred tax expenses are mixed and show that they have a negative slope coefficient, yet they are significant for some particular procedures employed for correcting the standard errors. Third, the relation between discretionary accruals and deferred tax expenses is further examined. The results show that deferred tax expenses seem to be related to earnings management under some research settings. However, the main finding of the thesis is that even under a severe institutional setting that does not offer ideal circumstances for implementation, the adoption of a new standard that ensures high-quality accounting helps in providing high-quality accounting information to investors, even though under some research settings the presence of incentives may lead to the discretionary use of deferred tax components.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available