THE EFFECTS OF TAX PLANNING ON EARNINGS MANAGEMENT OF THAI LISTED COMPANIES

Abstract

This article discusses the extent of tax planning, earnings management, and the impact of TP on EM. The quantitative analysis utilized probability sampling to collect 901 company-year performance reports from 354 publicly traded firms in seven industry groupings between 2015 and 2017: AGRO, CONSUMP, PROCON, INDUST, RESOURCE, SERVICE, and TECH (exclude Finance Ind.). The EM was computed using the Kothari, Leone, and Wasley (2005) equation and Multiple Regression Analysis (MRA). They stated that, compared to the first year, the EM grew overall, with the INDUS group following the market trend. Conversely, the groups with rising EM are SERVICE and TECH, whereas AGRO and CONSUMP have declining EM. Concerning the three TPs, Effective Tax Rate: TP(ETR) discovered overall market fluctuations, declining trends in AGRO and INDUS, and rising trends in SERVICE. Cash Flow from Operations: TP(TAX/CFO) discovered general market volatility, growing trends in PROPCON and TECH, rising trends in INDUS and SERVICE, and a declining trend in PROPCON. Test of TP's effect on EM using MRA Model 2 demonstrated statistically significant negative effects of TP(TAX/CFO) and positive effects of controlling factors CONSUMP, INDUST, and PROPCON.