Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26257
Authors: 
Goerke, Laszlo
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2212
Abstract: 
A strictly risk-averse manager makes joint decisions on a firm's tax payments and book profit declarations according to accounting standards. It is analysed how the incentives to overpay or evade taxes and to inflate book profits are influenced by (1) the composition of the manager's remuneration, (2) the ability to control the manager's actions, (3) the costs of making untruthful profit declarations, and (4) the tax rate. If the firm's owner or the government takes into account these effects when pursuing his own objectives, the changes in tax payments and book profit declarations become theoretically more ambiguous.
Subjects: 
executive compensation
financial accounting
tax evasion
JEL: 
H25
H26
M52
Document Type: 
Working Paper

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