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The research aims to determine if corporate earnings are manipulated due to adjustments in statutory tax rates following the Tax Reform Act of 1986.

Earnings Management in Response to Corporate Tax Rate Changes: Evidence from the 1986 Tax Reform Act.

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The research aims to determine if corporate earnings are manipulated due to adjustments in statutory tax rates following the Tax Reform Act of 1986.
Analysis of accounting earnings for American corporations pre- and post-TRA
Examination of changes in statutory corporate income tax rates
Evaluation of earnings management practices in relation to tax reductions
Identified a significant decrease in the maximum corporate tax rate from 46% to 34%
Found evidence of earnings management in response to the tax rate change
Corporations demonstrated shifts in accounting practices aligned with lowered tax liabilities

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Investigates the impact of the 1986 Tax Reform Act on corporate earnings management in America, indicating a response to tax rate reductions.

David A. Guenther (1994) studied this question.

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Investigates the impact of the 1986 Tax Reform Act on corporate earnings management in America, indicating a response to tax rate reductions.