A study on the effects of tax expense surprise on future stock returns under IFRS and US GAAP
Date of Publication
Bachelor of Science in Accountancy
Ramon V. Del Rosario College of Business
Defense Panel Member
Aeson Dela Cruz
Alloysius Joshua Paril
The researchers investigate the effects of tax expense surprise on future stock returns under two different accounting standards, namely IFRS and US GAAP, while controlling for other documented stock price anomalies. Previous studies have shown that seasonally differenced quarterly tax expense, the researchers' proxy for tax expense surprise, is positively related to future stock returns. Moreover, the difference between the two accounting standards, as documented by prior studies, allows the researchers to hypothesize that there might be a difference in the unexpected changes of tax expense on future stock returns under the two standards. They have found that, in general, most of the documented factors have an insignificant effect on future stock returns under both accounting standards. This may be due to five reasons: the effect of technology and the increased accuracy of forecasts, the diminishing applicability of earnings management on stock models, and the improvements in valuation models that place more emphasis on forward-looking rather than historical data.
Archives, The Learning Commons, 12F, Henry Sy Sr. Hall
xiii, 174, 4 leaves : llustrations (some color) ; 28 cm. + 1 disc ; 4 3/4 in.
Stocks--Taxation; Price-earnings ratio
Andrade, S., Baluyot, L. B., Carino, J. S., & Dave, Jose Lorenzo C.. (2016). A study on the effects of tax expense surprise on future stock returns under IFRS and US GAAP. Retrieved from https://animorepository.dlsu.edu.ph/etd_bachelors/9056