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Chairs Research Seminar Series: Dan Dhaliwal : University of Arizona : March 22, 2013
noon to 1:30 PM
Dan Dhaliwal is the Francis McClelland Endowed Chair Professor at the University of Arizona. He is an acclaimed scholar with numerous publications in top accounting and finance journals. His research areas are capital market research in accounting, taxes and economic behavior, and management's choice of disclosure and accounting policies. He has served as Senior Editor for The Accounting Review and is on the editorial board of Journal of Accounting Research and The Accounting Review. He received the American Accounting Association Educator of the Year Award in 2004.
Title: Taxable Income Properties, Predictability of Book Income, and Firm Risk.
Abstract: Previous research has examined whether taxable income contains incremental information about the persistence of book income. In this study we argue that taxable income (in the form of its second moment properties of the over-time variance of taxable income and covariance of book and taxable incomes) contains information about the uncertainty associated with future book income and about firm risk. Our empirical analysis demonstrates that the second moment properties of taxable income provide information about earnings predictability, stock return variability, beta, and the cost of capital. We find that information contained in our taxable income properties are incremental to that provided by book income properties, cash flow properties, and control variables associated with risk as well as book-tax differences. Our findings should be of interest to regulators, investors, and academics because we provide new evidence on the risk-relevance and the incremental information contained in taxable income.
Business School Dean's Office
Melissa SimsTel 408-554-4578