Abstract/Details

The spread of aggressive corporate tax reporting: A detailed examination of the corporate -owned life insurance shelter


2008 2008

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Abstract (summary)

This paper investigates the spread of aggressive corporate tax reporting by modeling a firm's decision to adopt the corporate-owned life insurance (COLI) shelter. I use a sample of known COLI participants to examine whether certain firm characteristics are associated with the decision to adopt a COLI shelter. I find some evidence that firms with higher performance-matched discretionary accruals are more likely to adopt a COLI shelter, suggesting a positive relation between aggressive financial reporting and aggressive tax reporting. I also find that firms with greater capital market visibility are less likely to adopt a COLI shelter, consistent with a potential reputational cost for being associated with aggressive tax avoidance activities. Further, my results suggest that COLI adopters are generally R&D intensive firms with low leverage and few foreign operations. In addition to firm specific characteristics, I consider two explanations for the spread of COLI adoption motivated by theory on diffusion of innovations and institutional isomorphism. I investigate whether firms imitate prior COLI adopters and whether COLI adoption spreads through common auditors. My results are not consistent with an imitation explanation. Further, my results suggest that having the same auditor as a prior COLI adopter does not increase the likelihood that a firm will adopt COLI.

Indexing (details)


Subject
Accounting;
Corporate tax planning;
Corporate owned life insurance;
Tax shelters;
Earnings management
Classification
0272: Accounting
Identifier / keyword
Social sciences; Corporate taxes; Insurance; Life insurance; Tax shelters
Title
The spread of aggressive corporate tax reporting: A detailed examination of the corporate -owned life insurance shelter
Author
Brown, Jennifer Lynn
Number of pages
144
Publication year
2008
Degree date
2008
School code
0227
Source
DAI-A 69/06, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
ISBN
9780549637943
Advisor
Robinson, John R.
University/institution
The University of Texas at Austin
Department
Accounting
University location
United States -- Texas
Degree
Ph.D.
Source type
Dissertations & Theses
Language
English
Document type
Dissertation/Thesis
Dissertation/thesis number
3315069
ProQuest document ID
250693779
Copyright
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
http://search.proquest.com/docview/250693779
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