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ẢNH HƯỞNG CỦA CHÊNH LỆCH GIỮA LỢI NHUẬN KẾ TOÁN VÀ THU NHẬP CHỊU THUẾ ĐẾN TÍNH ỔN ĐỊNH CỦA LỢI NHUẬN TẠI CÁC CÔNG TY NIÊM YẾT TRÊN THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAM.ẢNH HƯỞNG CỦA CHÊNH LỆCH GIỮA LỢI NHUẬN KẾ TOÁN VÀ THU NHẬP CHỊU THUẾ ĐẾN TÍNH ỔN ĐỊNH CỦA LỢI NHUẬN TẠI CÁC CÔNG TY NIÊM YẾT TRÊN THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAM.ẢNH HƯỞNG CỦA CHÊNH LỆCH GIỮA LỢI NHUẬN KẾ TOÁN VÀ THU NHẬP CHỊU THUẾ ĐẾN TÍNH ỔN ĐỊNH CỦA LỢI NHUẬN TẠI CÁC CÔNG TY NIÊM YẾT TRÊN THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAM.ẢNH HƯỞNG CỦA CHÊNH LỆCH GIỮA LỢI NHUẬN KẾ TOÁN VÀ THU NHẬP CHỊU THUẾ ĐẾN TÍNH ỔN ĐỊNH CỦA LỢI NHUẬN TẠI CÁC CÔNG TY NIÊM YẾT TRÊN THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAM.ẢNH HƯỞNG CỦA CHÊNH LỆCH GIỮA LỢI NHUẬN KẾ TOÁN VÀ THU NHẬP CHỊU THUẾ ĐẾN TÍNH ỔN ĐỊNH CỦA LỢI NHUẬN TẠI CÁC CÔNG TY NIÊM YẾT TRÊN THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAM.ẢNH HƯỞNG CỦA CHÊNH LỆCH GIỮA LỢI NHUẬN KẾ TOÁN VÀ THU NHẬP CHỊU THUẾ ĐẾN TÍNH ỔN ĐỊNH CỦA LỢI NHUẬN TẠI CÁC CÔNG TY NIÊM YẾT TRÊN THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAM.ẢNH HƯỞNG CỦA CHÊNH LỆCH GIỮA LỢI NHUẬN KẾ TOÁN VÀ THU NHẬP CHỊU THUẾ ĐẾN TÍNH ỔN ĐỊNH CỦA LỢI NHUẬN TẠI CÁC CÔNG TY NIÊM YẾT TRÊN THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAM.ẢNH HƯỞNG CỦA CHÊNH LỆCH GIỮA LỢI NHUẬN KẾ TOÁN VÀ THU NHẬP CHỊU THUẾ ĐẾN TÍNH ỔN ĐỊNH CỦA LỢI NHUẬN TẠI CÁC CÔNG TY NIÊM YẾT TRÊN THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAM.
MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ********* LE THI BAO NHU THE EFFECT OF BOOK – TAX DIFFERENCES ON EARNINGS PERSISTENCE AT VIETNAM-LISTED COMPANIES Major : Accounting Code : 9340301 SUMMARY OF THE THESIS HO CHI MINH CITY – 2022 The Thesis is prepared at: University of Economics Ho Chi Minh City Thesis supervisor: Associate Professor, PhD Mai Thi Hoang Minh Reviewer 1: Reviewer 2: Reviewer 3: The thesis will be presented to the Thesis Board at the University of Economics Ho Chi Minh City At…….hours…… day…….month………year……… This Thesis can be found at the library of University of Economics Ho Chi Minh City LIST OF RESEARCH WORKS OF AUTHOR Le Thi Bao Nhu The Impact of IFRS on Book – Tax Differences and Income Tax in Vietnam, International Conference Proceedings: Vietnam Accountancy Future and Prospects, 2019, ISBN: 978-604-60-3012-6, pp 315 – 318 Mai Thi Hoang Minh & Le Thi Bao Nhu Book-tax differences and Accounting conservatism – Evidence from Vietnam, Vietnam's Social-economic Develop, ISSN: 0868-359X, Volume 24, Issue 2, Number 98 July 2019, pp 47 – 62 Le Thi Bao Nhu, Nguyen Thi Thu Hau & Nguyen Thi Khanh Van Impact of Book – tax differences on the settlement and audit of corporate income tax, Review of Finance, ISSN: 2615-8973, Issue 2, 2020 (739), pp 52-54 Le Thi Bao Nhu, Nguyen Thi Thu Hao & Nguyen Thi Hong Hanh Factors affecting the corporate income tax compliance in private enterprises in Ba Ria – Vung Tau province, A sub-journal of VNUHCM Journal of Science and Technology Development, 5(2), 2021, pp 1576 – 1588 Bui Quang Hung, Mai Thi Hoang Minh, Le Thi Bao Nhu Discuss the persistence of earnings and its components in enterprises, Review of Finance, ISSN: 2615-8973, Issue 2, 2021 (761), pp 4043 INTRODUCTION The necessity of the topic Earnings quality has been extensively researched in the literature (Kousenidis et al., 2013) Earnings persistence is regarded as a proxy for earnings quality (P Dechow et al, 2010; Mohammady, 2010; Kousenidis et al, 2013) The difference between book income and taxable income affects the earnings quality on financial statements, so this information can help users forecast future earnings (Hanlon, 2005; Tang, 2006; Lev and Nissim, 2004; H Choi et al, 2020) Some policymakers and journalists argue that disclosure of information on book-tax differences (BTD) and companies with large BTD is required because these companies may be manipulating data for the accounting, tax, or both purposes (Hanlon and Heitzman, 2010) Many recent studies on the relationship between BTD and persistence of earnings and accruals, such as Mills and Newberry (2001), have provided evidence that the magnitude of BTD has a positive relationship with many financial statement items Phillips et al (2003) expand on this study, demonstrating that deferred tax expense provides useful information about earnings management via total accruals and discretionary accruals from the Jones (1991) and Modified Jones (1991) models (Patricia M Dechow et al., 1995) According to Joos et al (2000), when BTD (in absolute value) is large, the relationship between pre-tax and after-tax earnings is weaker, indicating that the manager should use BTD as an opportunity for earnings management Investors will recognize that earnings have been managed, lowering their confidence in reported earnings BTD affects earnings and accruals quality (Blaylock et al, 2012; Hanlon, 2005; Xie, 2001) Similarly, Blaylock et al (2012) demonstrate that BTD sources from earnings management, tax avoidance, and differences between accounting and tax regulations all affect the persistence of earnings and accruals Tang (2007) provides some empirical evidence that BTD is useful for earnings management and tax management after accounting and tax differences in data recognition on reports are removed It can be seen that previous studies focused on managers' perceptions of recording accruals without considering cash flow persistence; this issue was mentioned in (Hanlon, 2005) but did not conduct experimental research (Jeong and Choi, 2019) Since 2013, Vietnam's tax policy has been regularly revised not only to help businesses but also to improve corporate income tax compliance (Loan et al., 2018) Tax evasion is becoming more common, as both foreign and domestic businesses use loopholes and incentives in Vietnam's corporate income tax law to reduce their tax obligations This situation reduces the state's revenue, which can lead to inequitable social resource allocation and have a negative impact on the economy (Ha et al., 2021) Due to concerns about tax evasion, corporate income tax inspection is becoming more interested and enhanced, thereby increasing government revenue and increasing tax rates for taxpayers At the same time, the problem of data differences before and after the audit is emerging in Vietnam's stock market, particularly in earnings (Nguyễn Việt and Nguyễn Văn Hưng, 2017) Therefore, it is also necessary to analyze and comprehend information about BTD, such as the distinction between book and taxable income, the persistence of earnings, and their components Although there have been extensive studies on BTD and its relationship with the persistence of earnings and accruals around the world, there has been little research to clarify the above issue for enterprises in developing countries like Vietnam At the same time, Vietnam is gradually integrating into international accounting, moving closer to IFRS, with Circular No 200/2014/TTBTC (Circular 200) being promulgated for the presentation of financial statements since 2015 (Phan et al., 2018) From the foregoing, the thesis' main contribution is to address the shortcomings of previous studies based on (Blaylock et al., 2012; Hanlon, 2005) to examine the influence of BTD on the persistence of earnings and earnings components at companies listed on the Vietnam stock exchange over the last ten years As previously stated, BTD is the difference between book and taxable income The study differs from previous studies in three ways: (1) it compares the persistence of earnings and their components before and after the implementation of Circular 200; (2) it considers the effect of BTD and its source on the persistence of cash flow, thereby assessing earnings persistence; and (3) it compares the effects of BTD and its source on the persistence of earnings and their components over the two research periods Furthermore, the method for calculating BTD, as well as identifying observations in the group of earnings management or tax avoidance, is all based on new approaches that are appropriate in the Vietnam context and eliminate the influence of the corporate tax rate changes in recent years The economic context of Vietnam Research objective This thesis aims to measure the persistence of earnings and their components and determine the influence of BTD and the source of BTD on this persistence The thesis also explores the difference between the persistence of earnings and their components under the influence of BTD through the period of applying the accounting regime in Vietnam Research questions The thesis focuses on answering the following questions in order to achieve the research goal: Question 1: How is the persistence of earnings and their components in Vietnam? Is there a difference in persistence before and after the application of Circular 200? Question 2: How does BTD affect earnings persistence and its components? Is there a difference between this effect before and after the application of Circular 200? Question 3: How the sources of BTD affect earnings persistence and its components? Is there a difference between this effect before and after the application of Circular 200? Subjects and scope of the research 5.1 Research subjects Research subjects include: The persistence of earnings, the persistence of earnings components, BTD, source of BTD at Vietnam-listed companies 5.2 The scope of research Vietnam listed companies, including the Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) with data collected from 2010 to 2019 This is the time when listed companies' financial statements are made available in their entirety At the same time, the company's operations are hampered by an adverse operating environment, such as the Covid-19 epidemic that ravaged Vietnam in 2020 and 2021, affecting earnings and financial targets Therefore, the author did not update this study period over the course of two years Excluded from the sample of companies: (1) There are few observations collected due to the new listing, (2) companies in the banking, finance, and insurance industries due to their specific operating regulations, (3) companies that not collect the necessary data in their financial statements for three consecutive years, (4) companies not apply 200 after 2014 Research methodology The thesis’ contribution Theoretical contributions The study adds to the theory by incorporating four factors First, the thesis validates the literature on BTD, earnings persistence, and earnings components in the context of Vietnam Second, the study provides evidence on the effect of BTD on earnings persistence and its components in Vietnam Third, employ the partition approach to examine the impact of BTD source on the persistence of earnings and earnings components Finally, the thesis demonstrates the effect of the accounting regime on earnings persistence by comparing results before and after the application of Circular 200 This accounting regime's impact on earnings persistence is also demonstrated in the thesis These are important for accounting and tax research, as well as broadening understanding of the relationship between BTD and earnings persistence, as well as its components, in the Vietnamese context The study also serves as a foundation for future research on BTD, their source, earnings persistence, and its components Practical contributions The findings contribute to improving the quality of predicting future earnings by clarifying the persistence of earnings and their components; as a result, it is important for investors and shareholders to analyze the future financial position in order to make effective investment decisions and competitive strategies Managers and chief accountants have more information to manage earnings and improve earnings quality, update tax-accounting regulations, and comply with the regulations of recording transactions in periods of applying different accounting regimes after studying the influence of BTD and its source on the persistence of earnings and its components Furthermore, the findings will be used to provide state agencies and policymakers with more information to help them manage businesses and develop scientific accounting and tax principles and regimes that adhere to international accounting standards Structure of the thesis Chapter 1: Research overview Chapter 2: Theoretical basis and research hypothesis Chapter 3: Research methodology Chapter 4: Research results and discussion Chapter 5: Conclusion and implications negative There have been few studies on the effects of BTD sources on cash flow persistence There are few published reports in Vietnam on the effects of BTD and the sources of BTD on earnings persistence and its components However, there have been some studies on the persistence of earnings and its components, as well as other studies on the factors influencing earnings quality and how BTD affects financial statement information Furthermore, a few studies discuss how factors such as earnings management, tax avoidance, and the disparity between accounting regulations and tax law affect performance There are few articles on this topic, and the research method is still simple, but it provides some evidence and directions for future research There are still gaps in the literature in Vietnam and other developing countries regarding earnings persistence and earnings prediction under the influence of BTD that need to be investigated 1.3 Research gap For starters, there is rarely research that provides a comprehensive view of the persistence of earnings and their components for Vietnam-listed companies over the last ten years Second, there has been little research on the impact of BTD on the accruals and cash flow components Third, there has been little research on the effects of BTD on the persistence of earnings and its components in developing countries, including Vietnam Fourth, there have been few papers on the effects of BTD sources on earnings persistence and its components in developing countries such as Vietnam 10 CONCLUSION CHAPTER CHAPTER 2: THEORETICAL BASIS AND RESEARCH HYPOTHESIS 2.1 Research concepts 2.1.1 Book income A period's book income is the gain or loss before deducting corporate income tax According to accounting regulations, book income is calculated as the difference between total revenue and total cost for the period 2.1.2 Income taxes The gain (or loss) in the period used to calculate the amount of CIT that the business must pay is referred to as taxable income (or recovery) The provisions of tax law are used to determine these gains (or losses) 2.1.3 Persistence of earnings Earnings persistence is an indicator of earnings quality Earnings persistence means that earnings from the current year can be maintained and persisted in earnings from the following year Earnings are persistent in terms of econometrics if the value is constant or if the value over time follows the probability distribution 2.1.4 Persistence of earningscomponents Earnings components are persistent, which means that their value in the current year will be maintained and persisted in the future 11 According to Wells (2007), if the earnings components have different persistence, the earnings persistence will be affected; thus, these components all provide predictive information about future earnings 2.1.5 Difference between accounting earnings and taxable income BTD is the difference between data recognized under accounting principles and data recognized under current tax law 2.1.6 Sources of BTD Earnings management (EM), tax avoidance (TAXAVOIDER), and differences arising from differences in accounting and tax recognition (BASE) all contribute to temporary BTD (Hanlon, 2005; Frankel and Litov, 2009; Blaylock et al, 2012) 2.2 Background theory 2.2.1 Decision usefulness theory Decision usefulness theory builds on financial accounting's informational ability to assist users in making informed decisions (Scott, 2015; Gray et al., 1995) According to this theory, the primary purpose of financial statements is to provide useful and relevant information to users for them to make economic decisions The concept of profit-cost balance is also addressed by decision usefulness theory, which is an important factor to consider when establishing accounting standards (J Godfrey et al., 2003) 2.2.2 Stakeholder theory Stakeholder theory originated from Freman's (1984) on organizational governance and business ethics According to this theory, the organization must treat its stakeholders fairly, and if an interesting conflict arises, the business must strike an optimal balance between the parties 12 2.2.3 Agency theory The agency theory (or the theory between the principal and the agent) is a classical theory in economics, first mentioned by Ross (1973) This theory explains the relationship between two parties, namely the principal (such as shareholders, owners, etc.) and representatives (such as managers, executives, etc.), in which the principal hires the representative to perform some work based on the contract and the binding conditions in order to minimize the potential negative consequences (Jensen and Meckling, 1976) 2.2.4 Positive accounting theory Positive accounting theory focuses on the relationships that exist between the various individuals involved in providing resources to an organization, as well as the accounting methods that can be used to support these relationships (Deegan et al Unerman, 2006) According to (Deegan and Unerman, 2006), managers will take advantage of the benefit themselves, and organizations will implement rules to align managers' interests with the owner's 2.3 Formulation of research hypothesis 2.3.1 Persistence of earnings and earnings components H1: Earnings are persistent and can explain future earnings H2: Among the earnings components, cash flow is more persistent than accruals 2.3.2 BTD affects the earnings persistence H3: Firms with a large BTD have a lower earnings persistence than firms with a small BTD 2.3.3 BTD affects the persistence of earnings components H4a: Firms with large BTD have lower persistence of accruals than firms with small BTD 13 H4b: A company with a large BTD has a lower persistence of the cash flow than a company with a small BTD 2.3.4 Effects of BTD’s sources on the persistence of earnings and its components H5a: For firm-years with large positive BTD, the persistence of earnings for the earnings management (EM) subsample is lower than for the BASE subsample H5b: For firm-years with large positive BTD, the persistence of accruals and cash flow for the earnings management (EM) subsample are lower than for the BASE subsample H6a: For firm-years with large positive BTD, the persistence of earnings for the tax avoider (TAXAVOIDER) subsample is higher than for the BASE subsample H6b: For firm-years with large positive BTD the persistence of accruals and cash flow for the tax avoider (TAXAVOIDER) is higher than for the BASE subsample 2.4 Background in Vietnam In the context of integration, Vietnam made significant changes to reform the legal framework in order to develop the accounting-audit service industry, such as the adoption of the Accounting Law in 2015 Circular 200, which went into effect on January 1, 2015, had a significant impact on the entire accounting system, assisting in the updating of the most popular international regulations to reflect reality in Vietnam, thereby improving transparency and promoting business investment This circular demonstrates a shift in Vietnam's accounting regime toward integration with international practices, such as valuing nature over form and flexibility in accounting documents, separating accounting and tax regulations… (Tran Thi 14 Quyen, 2020) The impact of the new accounting regime on Vietnamese accounting has also been studied by many authors CONCLUSION CHAPTER CHAPTER 3: RESEARCH METHODOLOGY 3.1 Research methods and research process 3.1.1 Research methods The author employs a quantitative method, which is also employed by (Hanlon, 2005; Blaylock et al., 2012), based on the thesis objective, the thesis contribution, and the approach to measuring the variables Stata software was used for quantitative analysis 3.1.2 Research process 3.2 The persistence of earnings and earnings components PTBIt+1 = β0 + β1PTBIt + εt+1 (1) PTBIt+1 = γ0 + γ1PTCFt + γ2PTACCt + εt+1 (2) In there, PTBIt is the pretax accounting income scaled by average total assets in year t, PTBIt +1 is the pretax accounting income scaled by average total assets in year t+1 PTCFt is the pre-tax cash flow scaled by average total assets in year t PTACCt is the pretax accruals scaled by average total assets year t 3.3 The effect of BTD on the persistence of earnings and earnings components 15 PTBIt+1 = γ0 + γ1LNBTDt + γ2LPBTDt + γ3PTBIt + γ4PTBIt*LNBTDt + γ5PTBIt*LPBTDt + ε t+1 PTBI + t+1 (3) = γ0+ γ1LNBTDt + γ2LPBTDt + γ3PTCFt + γ4PTCFt*LNBTDt γ5PTCFt*LPBTDt + γ6PTACCt + γ7PTACCt*LNBTDt + γ8PTACCt*LPBTDt + εt+1 (4) LPBTD (large positive BTD), namely group 1: are firm-years with accounting income > taxable income, have an average BTD/TS ratio greater than and in 1/3 of the sample from the top group LNBTD (large negative BTD), namely group 3: are firm-years with accounting income < taxable income, have an average BTD/TS ratio less than and account for about 1/3 of the sample from the bottom group SBTD (small BTD), namely group 2: are the remaining firm-years, whose average BTD/TS ratio fluctuates around and is not in group or group 3.4 Partitioning LPBTD firms based on sources of BTD Firm years in the earnings management (EM) subsamples are those with the highest positive discretionary accruals (DAs) (accounting for 20% of the sample), belong to the LPBTD group, and are coded as EM Tax avoidance group (TAXAVOIDER) Approach 1: Firm-years with the largest cash effective tax rate difference (CASHETR_D) (accounting for 1/3 of the sample, belonging to the LPBTD group and coded as TAXAVOIDER) Approach 2: Being firm-years in the LPBTD group for consecutive years or more and not in the EM subsample The remaining (BASE) is which firm years whose LPBTD arises from objective differences of accounting regulations and tax law and 16 not belong to two sources and are coded as BASE These are the firm years that remain after the others have been coded as EM and TAXAVOIDER 3.5 Examining the sources of BTD to the persistence of earnings and earnings components 3.5.1 Examining the sources of BTD to the earnings persistence PTBIt+1 = γ0+ γ1EMt + γ2TAXAVOIDERt + γ3PTBIt + γ4PTBIt*EMt + γ5PTBIt*TAXAVOIDERt + ε t+1 (5) EM equals when firm i firms in the earnings management (EM) subsample in year t, and otherwise The TAXAVOIDER equals when firm i firms in the tax avoider (TAXAVOIDER) subsample in year t, and otherwise 3.5.2 Examining the sources of BTD to the persistence of earnings components PTBIt+1 = γ0+ γ1EMt + γ2TAXAVOIDERt + γ3PTCFt + γ4PTCFt*EMt + γ5PTCFt*TAXAVOIDERt + γ6PTACCt + γ7PTACCt*EMt + γ8PTACCt*TAXAVOIDERt + ε t+1 (6) 3.6 Data collection and analysis 3.6.1 Observational data and patterns Except for those companies that did not meet the criteria, data was collected on listed companies on the two stock exchanges in Ho Chi Minh City (HOSE) and Hanoi (HNX) from 2009 to 2019 There are 558 companies in the sample 3.6.2 Panel data 3.6.3 Data analysis process CONCLUSION CHAPTER 17 CHAPTER 4: RESEARCH RESULTS AND DISCUSSION 4.1 Descriptive statistics 4.2 Correlation and multicollinearity testing 4.2.1 Pearson correlation analysis 4.2.2 Multicollinearity testing 4.3 Selection Method of Regression 4.3.1 POLS and FEM 4.3.2 POLS and REM 4.3.3 FEM and REM Equations (1) and (2) are suitable for running OLS Equations (3), (4), (5), and (6) are suitable for running FEM 4.4 Heteroskedasticity test There are heteroskedastic equations (3), (4), (5), and (6) at a significance level of 1% 4.5 Residual autocorrelation test Autocorrelation occurs at a significance level of 1% in equations (3), (4), (5), and (6) The author runs FGLS to overcome the defects of the research model 18 4.6 Regression analysis Table 4.22 Summary of research results Hypothesis H1: PTBI t+1 = β0 + β1PTBIt + ε t+1 Coefficient Expected 2010-2014 2015-2019 β0 x x x β1 + + + HypothesisH2: PTBI t+1 = γ0 + γ1PTCFt + γ2PTACCt + ε t+1 Coefficient Expected 2010-2014 2015-2019 γ0 x x x γ1 + + + γ2 + + + HypothesisH3: PTBIt+1 = γ0 + γ1LNBTDt + γ2LPBTDt + γ3PTBIt + γ4PTBIt*LNBTDt + γ5PTBIt*LPBTDt + ε t+1 Coefficient Expected 2010-2014 2015-2019 γ0 x x x γ1 x x x γ2 x x x γ3 + + + γ4 γ5 No effect HypothesisH4a and H4b: PTBIt+1 = γ0 + γ1LNBTDt + γ2LPBTDt + γ3PTCFt + γ4PTCFt*LNBTDt + γ5PTCFt*LPBTDt + γ6PTACCt + γ7PTACCt*LNBTDt + γ8PTACCt*LPBTDt + εt+1 Coefficient Expected 2010-2014 2015-2019 γ0 x x x γ1 x x x γ2 x x x γ3 + + + γ4 γ5 No effect + γ6 + + γ7 γ8 No effect 19 HypothesisH5a and H5b: PTBI t+1 = γ0+ γ1EMt + γ2TAXAVOIDERt + γ3PTBIt + γ4PTBIt*EMt + γ5PTBIt*TAXAVOIDERt + εt+1 2010-2014 2015-2019 Coefficient Expected Apprach Apprach Apprach Apprach γ0 x x x x x γ1 x x x x x γ2 x x x x x γ3 + + + + + γ4 No effect No effect γ5 + + + HypothesisH6a and H6b: PTBIt+1 = γ0+ γ1EMt + γ2TAXAVOIDERt + γ3PTCFt + γ4PTCFt*EMt + γ5PTCFt*TAXAVOIDERt + γ6PTACCt + γ7PTACCt*EMt + γ8PTACCt*TAXAVOIDERt + ε t+1 2010-2014 2015-2019 Coefficient Expected Apprach Apprach Apprach Apprach γ0 x x x x x γ1 x x x x x γ2 x x x x x γ3 + + + + + γ4 No effect No effect γ5 + No effect No effect + + γ6 + + + + + γ7 No effect No effect γ8 + No effect No effect + + 4.7 Discussing research results CONCLUSION CHAPTER 20 CHAPTER 5: CONCLUSIONS AND MANAGEMENT IMPLICATIONS 5.1 Conclusion 5.2 Contributions 5.2.1 Theoretical contributions 5.1.1.1 For research on the earnings persistence The thesis adds to the body of evidence on earnings persistence and has implications for earnings quality research 5.1.1.2 For research on the effect of BTD on the persistence of earnings and their components The thesis adds to the body of evidence on the effect of BTD on earnings persistence and its components, as follows: • Earnings are influenced by BTD • BTD has an impact on earnings components • BTD sources and components influencing earnings persistence 5.1.1.3 For research on financial accounting in general The thesis is one of the few studies to investigate the impact of BTD and its sources on cash flow persistence to future earnings and to 21 provide more evidence for judgment and decision-making based on BTD The results also show that the earnings persistence and component persistence did not change significantly when moving from Decision 15/2006/QD-BTC to Circular 200 However, the persistence is significantly different for firm-years with book income that is significantly greater than taxable income 5.2.2 Contribution to practice The findings provide evidence for policymakers to use in developing relevant circulars and accounting regulations to improve earnings persistence and quality; developing strategic plans for the development of accounting and auditing systems to ensure effective state governance; supervising accounting and auditing activities; and enforcing accounting regulation and tax laws at enterprises The effect of BTD on earnings persistence and its components will provide more information for investors to use in making decisions The findings are significant in raising awareness about the importance of accounting indicators among chief accountants and administrators This information can be used by administrators for executive management 5.3 Some management implications 5.3.1 For policymakers Professional associations need to actively contribute ideas to improve financial statement presentation documents and disclose more complete information to assist investors and analysts in evaluating the persistence of current earnings and their components Accounting and tax information disclosure reduces the asymmetric information situation between internal and external entities 22 To provide a legal framework, policymakers can compare regulations on the presentation and disclosure of financial statements around the world, particularly when disclosing information related to accounting income and taxable income As a result, it assists stakeholders in better understanding the operating situation and evaluating the earnings quality To provide adequate and reliable information to stakeholders, tax policy and accounting standards must be harmonized to ensure compliance with reality in the new accounting emigrate application 5.3.2 For chief accountants and managers The thesis has provided the necessary information to help chief accountants and managers control the difference in revenue and expense recognition between accounting and tax, which is useful for business decision-making and analysis The influence of BTD on earnings persistence and their components in earnings is different, especially between periods of applying different accounting regimes, so managers must pay attention to making decisions when using relevant information Managers can also use BTD to alert investors to the quality of information on financial statements, particularly the quality of earnings and their components 5.3.3 For investors The findings provide a foundation for investors to consider the longterm difference between cash flow and accruals in current earnings, and investors can also use BTD to forecast future earnings Tax avoidance firms can reduce investor risk, and future cash flows are less likely to be disrupted Earnings management can be considered a risk to a company's operations, and investors should 23 reconsider investing in these companies 5.4 Limitations and future research directions To begin, the topic only considers the impact of BTD on one aspect of earnings quality without considering other aspects Second, BTD encompasses both temporary and permanent BTD The author only examines the effect of total BTD in this study and does not consider the effect of different BTD on the persistence of earnings and their components Third, the data is updated to 2019 to ensure that the research results are not influenced by the Covid-19 pandemic Future research may expand on the impact of BTD on stock value or investigate whether investors use BTD information and the sources of BTD to evaluate earnings quality, thereby measuring investors' reactions Future studies can examine the effect of each type of BTD on earnings to provide more detailed information about BTD and earnings quality on financial statements BTD can be divided into temporary BTD and permanent BTD (or normal and abnormal BTD) CONCLUSION CHAPTER ... Board at the University of Economics Ho Chi Minh City At…….hours…… day…….month………year……… This Thesis can be found at the library of University of Economics Ho Chi Minh City LIST OF RESEARCH... The necessity of the topic Earnings quality has been extensively researched in the literature (Kousenidis et al., 2013) Earnings persistence is regarded as a proxy for earnings quality (P Dechow... earnings quality, thereby measuring investors'' reactions Future studies can examine the effect of each type of BTD on earnings to provide more detailed information about BTD and earnings quality on financial