이연법인세의 손익효과와 발생액의 질

This paper examines whether earnings effect of deferred taxes affect accrual quality. Under current GAAP, firms are allowed to report deferred tax assets only when future tax expenses related to deferred tax assets are highly realizable. However, whether the realizability of future tax expenses is high enough to report deferred tax assets depends on manager's subjective judgment. Accordingly, accounting for deferred taxes provide managers with opportunistic incentives for managing earnings by exercising their discretion in recognizing deferred tax assets. In this paper, we attempt to evaluate such opportunistic behavior by examining earnings effect and/or accrual quality. Specifically, it is hypothesized that accrual quality are lower for firms with higher earnings effect of deferred taxes. We adopt the measures of accrual quality from Dechow and Dichev (2002). Empirical analysis is performed for the sample of 628 non-banking firms listed on Korean Stock Exchange that report deferred tax assets over 2000-2001. Empirical findings show that earnings of firms with higher earnings effect of deferred taxes have lower quality of accrual. To the extent that deferred taxes reflect managers' discretion in the realizability of future tax expenses when determining deferred tax assets, these results suggest that earnings effect of deferred taxes are exploited as an important means to earnings management and that such opportunistic earnings management is in turn evaluated by examining accrual quality. Thus, financial statement users could rely on such information to evaluate quality of earnings and make their investment decision and standard-setters and auditors should pay more attention to earnings effect of deferred taxes.