The German Accounting Law Modernization Act (BilMoG) of the year 2010 has been one of the most important reform acts in Germany in the last years and has constituted a change in paradigm with regard to the traditionally close relationship between financial and tax accounting. The abolishment of the reverse authoritative principle has implied the movement from a so-called one-book system towards a more two-book oriented system with two independent sets of accounting rules, whereas in the US a discussion on a stronger alignment of the two sets of accounts has been going on for many years. In that regard, the systemic change in the course of the BilMoG-Act constitutes an ideal and unique framework for research to make contributions to this ongoing discussion. Specifically, based on a unique matched tax return – financial statement dataset for the tax years 2008 to 2012, provided by Ernst & Young Germany, we aim to contribute to various research questions in the field of Tax Accounting. These in particular include the question whether the mandated change in book-tax conformity has altered German corporations’ reporting behavior, for instance with regard to earnings management or tax sheltering.
01.09.2014 - 29.02.2016
Corporate Taxation and Public Finance