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Relationship Between Deferred Tax Category and Stock Prices in Pharmacy

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  • Petr Habanec

    (Department of Accounting and Taxes, Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic)

Abstract

The paper deals with relationship between stock prices and deferred tax category. Joos, Pratt and Young provided evidence that book-tax differences are correlated with earning management. In this paper is confirmed negative relationship between stock prices and deferred tax. The relationship is assessed on sample of companies making business in pharmacy (CZNACE-C-21). The relationship between deferred tax category and stock prices is assessed on a sample of companies in the time series from 2005 to 2015. Sample consists of companies listed on Frankfurt stock exchange and reporting in accordance with international accounting standards IAS/IFRS. The stock prices dataset is based on Morningstar database. The results are compared with the results of author 's previous study concerning the deferred tax materiality.

Suggested Citation

  • Petr Habanec, 2018. "Relationship Between Deferred Tax Category and Stock Prices in Pharmacy," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 66(6), pages 1469-1475.
    • Handle: RePEc:mup:actaun:actaun_2018066061469
    DOI: 10.11118/actaun201866061469
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    References listed on IDEAS

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    1. Mihir A. Desai, 2003. "The Divergence between Book Income and Tax Income," NBER Chapters, in: Tax Policy and the Economy, Volume 17, pages 169-208, National Bureau of Economic Research, Inc.
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    4. Poterba, James M. & Rao, Nirupama S. & Seidman, Jeri K., 2011. "Deferred Tax Positions and Incentives for Corporate Behavior Around Corporate Tax Changes," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(1), pages 27-57, March.
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