International Journal of Accounting and Taxation

Research on Tax Expense Surprise
Minwoo Lee

Abstract
Accounting for income taxes is one of the most complex and emerging areas in financial reporting. This area has a vast number of studies encompassing various aspects of tax reporting. Among those, this paper performs a comprehensive survey of studies in the realm of the pricing of tax expense information asone of the newest topics the accounting for income taxes research. Central to the tax expense research is tax expense surprise effect that results in a positive relationship between tax expense surprise and future, not contemporaneous, stock returns. This paper discussesnot only relevant studies on thiseffect and but possible causes of the effect. Although a number of studies confirm this effect, its cause is not clear. Given seemingly mixed and inconclusive evidence as to the cause, a cleaner test is proposed as a possible future research direction in this area.

Full Text: PDF     DOI: 10.15640/ijat.v9n1a2