The influence of institutional pressures on tax proof disclosure

Depoers, Florence (Université Paris Nanterre - CEROS) ; Jérôme, Tiphaine (Ecole hôtelière de Lausanne, HES-SO // University of Applied Sciences Western Switzerland)

Companies are increasingly targeted by stakeholders for their tax behavior. In this context, the IAS 12 standard requires the disclosure of a tax proof to reconcile the effective tax rate with the theoretical tax rate. The purpose of this paper is to examine the influence of institutional pressures on the information disclosed in the tax proof. We use archival data from a sample of 120 French listed firms over a 3-year period. First, we create an index to measure the degree of information compliance included in the tax proof. Second, we measure institutional pressures along three dimensions and use a regression to evaluate their respective influence on the index. We find that the three facets of isomorphism – coercive, mimetic, and normative – explain the degree of information compliance included in the tax proof. In particular, we show positive associations between our index and four proxy variables of isomorphic forces. While most studies on IFRS compliance rely on agency, signal, or governance theories, our results shed light on the role of institutional pressures on corporate reporting quality. Our findings suggest that tax proof may be of interest to various groups of stakeholders and not only the financial community. We show how firms may seek legitimacy via increased fiscal transparency, which is on the agenda of many international organizations. The research informs national and global discussions on the appropriateness of corporate reporting in the context of a debate on what is a “fair” tax.

Conference Type:
full paper
Economie et Services
St Andrews, Scotland, 28-31 August 2017
St Andrews, Scotland
28-31 August 2017
44 p.
Published in:
Proceedings of the 29th International Congress on Social and Environmental Accounting Research and Emerging Scholars Colloquium (CSEAR UK 2017)
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 Record created 2017-10-27, last modified 2020-10-27

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