The impact of intangibles on accounting conservatism, audit pricing, and tax avoidance

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Authors
Hasan, Tahseen
Issue Date
2021-05
Type
Electronic thesis
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Language
ENG
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Management
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Abstract
In Chapter 1, I explore whether firms institute a higher degree of accounting conservatism in response to IRS monitoring. Utilizing textual analysis to obtain data on IRS acquisition of public firms’ 10-K financial disclosures in order to proxy for IRS attention, I find that when firms are under IRS attention, they tend to initiate higher levels of unconditional accounting conservatism. This effect holds for conditional accounting conservatism as well as several robustness tests and subsample analyses. The results also show a causal effect after using a difference-in-differences model with propensity score matching to match treatment firms that received an exogenous shock (IRS attention) to control firms that did not receive that shock within the sample period. This chapter provides insight into how firms attempt to mitigate the risk resulting from the IRS monitoring of their financial statements.
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May 2021
School of Management
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Rensselaer Polytechnic Institute, Troy, NY
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