Bank-Tax Conformity for Corporate Income: An Introduction to the Issues

This paper discusses the issues surrounding the proposals to conform financial accounting income and taxable income. The two incomes diverged in the late 1990s with financial accounting income becoming increasingly greater than taxable income through the year 2000. While the cause of this divergence is not known for certain, many suspect that it is the result of earnings management for financial accounting and/or the tax sheltering of corporate income. Our paper outlines the potential costs and benefits of one of the proposed "fixes" to the divergence: the conforming of the two incomes into one measure. We review relevant research that sheds light on the issues surrounding conformity both in the U.S. as well as evidence from other countries that have more closely aligned book and taxable incomes. The extant empirical literature reveals that it is unlikely that conforming the incomes will reduce the amount of tax sheltering by corporations and that having only one measure of income will result in a loss of information to the capital markets.

Districts Developing Leaders: Lessons on Consumer Actions and Program Approaches From Eight Urban Districts

Profiles eight Wallace-supported approaches to preparing future principals to succeed in improving troubled city schools, including establishing clear expectations so that university preparation programs can craft training accordingly

Lake Tagimaucia Montane Lake as a Potential Late Holocene Environmental Archive in Fiji\u27s Volcanic Highlands

Lake Tagimaucia, a montane volcanic lake on Taveuni Island, is Fiji\u27s only high-elevation lake. This study examined a lacustrine sediment core to explore the lake\u27s potential as a palaeoenvironmental archive through the Late Holocene. Dating reveals no simple age-depth relationship due to sediment age-reversals. However, phases of fire activity are evidenced by two distinct charcoal bands. Catchment burns were probably related to significant ENSO-driven drought, although fire ignition by volcanic eruptions on Taveuni cannot be ruled out. Above the dominant charcoal band, the sediment profile exhibits notable positive shifts in organic matter, bulk density, δ13C, and C:N ratio. These peaks suggest a phase of accelerated catchment erosion, possibly triggered by post-burn instability. We introduce a conceptual model to explain the influence of sedge peat swamps on lake sedimentation processes. Surrounding sedge-dominated peatlands have extensively encroached Lake Tagimaucia. Floating peat mats, gradually accumulating through time, act as a repository of organic material that is stored directly on the lake surface. Episodes of drought and fire release old organics directly into the lake itself, probably contributing to the complex chronological sequence in the Late Holocene stratigraphy

Influential Article Review - Internal Management’s Voluntary Transparency and Auditor's Declaration: China Proofs

This paper examines management. We present insights from a highly influential paper. Here are the highlights from this paper: We examine what determines a firm’s decision to disclose a self-assessment report on its internal control (IC) system and to further attain an auditor’s attestation on the report, using a sample of firms from the Shanghai Stock Exchange during the period 2006–2010. We hypothesize and find supporting evidence that the likelihood of having voluntary disclosure of IC self-assessment with an auditor’s attestation is positively related to future equity refinancing, mutual-fund shareholding, and whether the firm is controlled by the government, especially the central government. Our study also takes the identification problem into consideration, as our sample includes firms with IC weaknesses/deficiencies. Our study not only makes an incremental contribution to the literature, but also has practical implications, especially for regulators and investors in China. For our overseas readers, we then present the insights from this paper in Spanish, French, Portuguese, and German

Real Effects of Accounting Rules: Evidence from Multinational Firms' Investment Location and Profit Repatriation Decisions

We analyze survey responses from nearly 600 tax executives to better understand corporate decisions about real investment location and profit repatriation. Our evidence indicates that avoiding financial accounting income tax expense is as important as avoiding cash income taxes when corporations decide where to locate operations and whether to repatriate foreign earnings. This result is important in light of the recent research about whether financial accounting affects investment and in light of the decades of research on foreign investment that examines the role of cash income taxes but heretofore has not investigated the importance of financial reporting effects. Our analysis suggests that financial reporting is an important factor to be considered in the policy debates focused on bringing investment to the United States

Barriers to Mobility: The Lockout Effect of U.S. Taxation of Worldwide Corporate Profits

Using data from a survey of tax executives, we examine the corporate response to the one-time dividends received deduction in the American Jobs Creation Act of 2004. We describe the firms’ reported sources and uses of the cash repatriated and we also examine non-tax costs companies incurred to avoid the repatriation tax prior to the Act. Finally, we examine whether firms would repatriate cash again if a similar Act were to occur in the future. Overall, the evidence is consistent with a substantial lockout effect resulting from the current U.S. policy of taxing the worldwide profits of U.S. multinationals.Fuqua School of Business (Duke University)Michigan Ross School of Business (Paton Accounting Fund)University of Washington (Paul Pigott/PACCAR Professorship