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The Influence of Tax on IFRS Consolidated Statements: The Convergence of Germany and the UK

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  • Maria Gee
  • Axel Haller
  • Christopher Nobes

Abstract

The literature on the links between tax and financial reporting suggests that the strength of those links varies over time and from one jurisdiction to another. The links in Germany were seen to be particularly strong, and those in the UK rather weak. Previous literature was largely set in the context of unconsolidated statements but authors have suggested that their findings were relevant for consolidated reporting. This paper examines the scope for tax influence on IFRS consolidated financial reporting in the two above countries. We find that the overall position for Germany and the UK is now similar, that is, that the potential for tax influence is much weaker in Germany than recorded in previous studies. We also find that, even for unconsolidated reporting under domestic accounting rules, the extreme positions recorded for the two countries in the 1990s have been modified.

Suggested Citation

  • Maria Gee & Axel Haller & Christopher Nobes, 2010. "The Influence of Tax on IFRS Consolidated Statements: The Convergence of Germany and the UK," Accounting in Europe, Taylor & Francis Journals, vol. 7(1), pages 97-122, June.
  • Handle: RePEc:taf:acceur:v:7:y:2010:i:1:p:97-122
    DOI: 10.1080/17449480.2010.485382
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    Citations

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    Cited by:

    1. Luca Menicacci, 2022. "Financial reporting and book-tax conformity: A review of the issues," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2022(1), pages 41-77.
    2. Kim Ittonen & Karla Johnstone & Emma-Riikka Myllym�ki, 2015. "Audit Partner Public-Client Specialisation and Client Abnormal Accruals," European Accounting Review, Taylor & Francis Journals, vol. 24(3), pages 607-633, September.
    3. Ioan Pop & Szilveszter Fekete & Dan Dacian Cuzdriorean, 2013. "Relationship Between Accounting And Taxation In Romania: A Behavioral Analysis," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(15), pages 1-7.
    4. Adela Deaconu & Dan Dacian Cuzdriorean, 2016. "Accounting and the state in post-communist Romania," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 5(1), pages 59-93.
    5. Cuzdriorean Dan Dacian & Albu Catalin Nicolae & Albu Nadia, 2012. "The Relationship Between Accounting And Taxation - The Romanian Accounting Environment," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 894-900, July.
    6. Barbe, Odile & Didelot, Laurent & Ashta, Arvind, 2014. "From Disconnected to Integrated tax and financial systems A post-IFRS evaluation of evolution of Tax and Financial Reporting relationships based on the French case," Research in Accounting Regulation, Elsevier, vol. 26(2), pages 242-256.
    7. Ioana-Laura Tibulca, 2014. "Fiscal Convergence in the European Union in the Context of the Global Financial Crisis," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 152-158, April.
    8. Cuzdriorean - Vladu Dan Dacian & Albu Catalin Nicolae & Albu Nadia & Fekete Szilveszter, 2011. "A Longitudinal Analysis Regarding The Evolution Of Profit Tax Regulations In Romania - An Empirical View," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 594-601, July.
    9. Wehrfritz, Martin & Haller, Axel, 2014. "National influence on the application of IFRS: Interpretations and accounting estimates by German and British accountants," Advances in accounting, Elsevier, vol. 30(1), pages 196-208.
    10. Dan Dacian Cuzdriorean & Dumitru MatiÅŸ, 2012. "The Relationship Between Accounting And Taxation Insight The European Union: The Influence Of The International Accounting Regulation," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-2.
    11. Nobes, Christopher, 2018. "Lessons from misclassification in international accounting," The British Accounting Review, Elsevier, vol. 50(3), pages 239-254.
    12. Arif Ayluctarhan, 2022. "An Assessment of the Equity Method in Subsidiaries and Its Ability for Use in Tax Applications," Muhasebe Enstitusu Dergisi - Journal of Accounting Institute, Istanbul University Business School, vol. 0(67), pages 15-25, July.
    13. Haller, Axel & Wehrfritz, Martin, 2013. "The impact of national GAAP and accounting traditions on IFRS policy selection: Evidence from Germany and the UK," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 22(1), pages 39-56.
    14. Ulf Br&?ggemann & J?rg-Markus Hitz & Thorsten Sellhorn, 2013. "Intended and Unintended Consequences of Mandatory IFRS Adoption: A Review of Extant Evidence and Suggestions for Future Research," European Accounting Review, Taylor & Francis Journals, vol. 22(1), pages 1-37, May.
    15. Palea Vera, 2013. "Capital Market Effects of the IFRS Adoption for Separate Financial Statements: Evidence from the Italian Stock Market," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201309, University of Turin.

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