I investigate whether management’s decision to release or maintain the valuation allowance for deferred tax assets provides incremental information regarding pretax earnings growth in the following earnings period. I classify firm-years into two categories; valuation allowance release firm-years and valuation allowance maintain firm-years. The results of this study suggest that a release of the valuation allowance in the current period is positively associated with pretax earnings growth in the following period. This paper also studies whether a release of the valuation allowance yields increased external monitoring, and finds evidence that suggests an association.
| Identifer | oai:union.ndltd.org:CLAREMONT/oai:scholarship.claremont.edu:cmc_theses-2510 |
| Date | 01 January 2017 |
| Creators | Ribal, Anthony James |
| Publisher | Scholarship @ Claremont |
| Source Sets | Claremont Colleges |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | CMC Senior Theses |
| Rights | © 2017 Anthony J Ribal, default |
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