<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This paper aims to investigate the impact of deferred tax, as a technique adopted to support the economic orientation of financial statements over their legal form, on earnings quality as a required attribute to achieve the objective of financial reporting. The study used the model of Sloan (1996) through 280 firm-year observations that concern 40 Algerian companies from 2013 to 2019. Employing persistence and predictive ability as proxies for earnings quality, the results indicated that earnings of Algerian companies present a high level of persistence and a weak level of predictive ability. However, the deferred tax does impact neither the persistence of earnings nor their predictive ability. Therefore, accounting regulators in Algeria must simplify accounting for the deferred tax to encourage its application by companies and improve earnings quality.</p>
</abstract>

This paper aims to investigate the impact of deferred tax, as a technique adopted to support the economic orientation of financial statements over their legal form, on earnings quality as a required attribute to achieve the objective of financial reporting. The study used the model of Sloan (1996) through 280 firm-year observations that concern 40 Algerian companies from 2013 to 2019. Employing persistence and predictive ability as proxies for earnings quality, the results indicated that earnings of Algerian companies present a high level of persistence and a weak level of predictive ability. However, the deferred tax does impact neither the persistence of earnings nor their predictive ability. Therefore, accounting regulators in Algeria must simplify accounting for the deferred tax to encourage its application by companies and improve earnings quality.

The Impact of Deferred Tax on Earnings Quality: Evidence from Algerian Companies

Zagreb International Review of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"The Impact of Deferred Tax on Earnings Quality: Evidence from Algerian Companies"}

This paper aims to investigate the impact of deferred tax, as a technique adopted to support the economic orientation of financial statements over their legal...

The Impact of Deferred Tax on Earnings Quality: Evidence from Algerian Companies

Published Online: Jun 14, 2022

Page range: 133 - 148

DOI: https://doi.org/10.2478/zireb-2022-0009

Keywords
Earnings quality, Earnings persistence, Earnings predictive ability, Deferred tax, Algerian companies

© 2022 Bilal Kimouche, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The Impact of Deferred Tax on Earnings Quality: Evidence from Algerian Companies

Published Online: Jun 14, 2022

Page range: 133 - 148

DOI: https://doi.org/10.2478/zireb-2022-0009

KeywordsEarnings quality, Earnings persistence, Earnings predictive ability, Deferred tax, Algerian companies

© 2022 Bilal Kimouche, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
Earnings quality, Earnings persistence, Earnings predictive ability, Deferred tax, Algerian companies