The Possible Weakening of Financial Accounting from Tax Reforms

There are past and proposed tax law changes that contain provisions that affect financial reporting. These include calls for book-tax conformity, proposals to increase the links between financial accounting and taxable incomes, and actions by Congress that make direct alterations to U.S. GAAP. I sub...

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Bibliographic Details
Published in:The Accounting review 2021-09, Vol.96 (5), p.389-401
Main Author: Hanlon, Michelle
Format: Article
Language:English
Subjects:
Accountants
Accounting
Conformity
Financial reporting
Law
Proposals
Studies
Tax legislation
Tax reform
Taxation
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Summary:There are past and proposed tax law changes that contain provisions that affect financial reporting. These include calls for book-tax conformity, proposals to increase the links between financial accounting and taxable incomes, and actions by Congress that make direct alterations to U.S. GAAP. I submit that these tax law changes potentially threaten financial reporting quality. I discuss my concerns about why such provisions have not attracted attention from accountants to the extent they should and make a case for more awareness and more research going forward.
ISSN:0001-4826
1558-7967
DOI:10.2308/TAR-2021-0198