JIT adoption: The effects of LIFO reserves and financial reporting and tax incentives

• 成果类型: Article
• 署名作者: Kinney, MR; Wempe, WR
• 署名单位: Texas A&M University System; Texas A&M University College Station; Texas Christian University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1506/WYAW-JLGF-XU60-E8CQ
• 发表日期: 2004
• 页码: 603-638
• 关键词: earnings management; accounting choices; FIRMS

摘要

Using matched samples of JIT adopters and nonadopters, we examine the association of JIT adoption with firms' financial reporting and tax incentives, earnings-management histories, and LIFO reserve levels. We find evidence that adoption decisions are influenced by the interaction of firms' LIFO reserves with their income smoothing, debt covenant, and tax incentives. We also find that adoption is less likely for firms historically engaging in high degrees of earnings management, particularly when such firms have no substantial LIFO reserves. Our study extends earlier research demonstrating a relation between inventory valuation method and year-end inventory transactions, and documents a relation between earnings-management incentives and a fundamental supply-chain design choice.