国際会計研究学会年報 2005年度

Taxation Gap
The Introduction of Deferred Taxes Brings W hat to Japanese FirmsʼFinancial Reporting ?
Kevin Pan
Graduate School of Commerce
Waseda University, Japan

Abstract
This study examines ﬁnancial reporting of Japanese ﬁrms
from 1977 to 2004 to exploit if the introduction ofdeferred taxes
in March 2000 ﬁscal year mitigates the taxation gap ?I investigate net income and pretax income and ﬁnd that Japaneseﬁrmsʼreporting behaviors on tax expenses have signiﬁcantly
changed under the new tax accounting standard instituted in
March 2000 ﬁscal year. The evidence presented in this paper
shows that the taxation gap is not ameliorated with the introduction of deferred taxes to the Japanese GAAP.

99

1. Introduction
Researchers have built up a rich list ofing Practice ［SSAP］ No. 15, Accounting Standards Committee ［ASC］ 1999,
para. 12).

topics on earnings management using

The above papers present that how adeferred tax assets and valuation allow-

manager can manage ﬁrmsʼearnings util-

ance in the existing literature. Recently,

izing the valuation allowance against the

researchers switched their interests todeferred tax assets. Since the Japanese

focus on the management opportunism

ﬁrms started recognizing deferred taxes

related to the deferred tax assets, namely,and deferred tax assets in 2000, this paper

the valuation allowance. Such oppor-

should beneﬁt from conducting Schrandtunistic earnings management originatesand Wong (2003) type oftest byselectingfrom that the U.S. SFAS No.109 issued inﬁrms that record deferred tax assets and1992 that allows discretionary arbitrage

the valuation allowance against it imme-

over valuation allowance against deferred

diately after the standard was issued.

tax assets. Managers, thus, are able to

However, when examine Japanese ﬁrmsʼ

opportunistically create “hidden re-

ﬁnancial statement it requires a diﬀerent

serves” for future earnings managing.

setting of tests.

M iller and Skinner (1998) thus argue

The rest of this paper proceeds as fol-that level of ﬁrmsʼtax credit and tax loss

lows. Section 2 brieﬂy reviews the related

carryforwards is the most important vari-literature and discusses the problem ofable for valuation allowance of deferredtaxation gap. Section 3 describes the sam-tax assets. Schrand and Wong (2003)

ple selection and data, and reasons theﬁnd evidence of income smoothing using

credibility of adopted scaling factor. Sec-the deferred tax assets valuation allow-

tion 4 presents the visual evidence using

ance in banking industry.

distributions of earnings,shows the distri-Phillips,Pincus and Rego (2003) assertthat deferred tax expenses serve better inbution of eﬀective tax rates. Section 5
concludes the paper.

detecting earnings management than
Jones-type accrual models. Phillips, Pincus, Rego and Wan (2004) later ﬁnd that

2. Taxation Gap

deferred tax liabilities can also picture

Most of the researches study the before

earnings management activities. On aﬁscal year of 2000 Japanese ﬁrms because

slightly diﬀerent thread,Gordon and Joos

series of accounting reforms were institut-(2004) ﬁnd that U.K. managers under theed into Japanese GAAP in the ﬁscal year

partial method measure deferred taxes

in 2000. M ajor change in Japanese GAAP

opportunistically to manage balancethat might aﬀect the layouts of the Japa-

sheet (Statement of Standard Account-nese ﬁrmsʼﬁnancial statement including100

Taxation Gap

mandated cash ﬂow statement, market

ﬁscal years of March 2000, the Tax Eﬀect

price recognition of ﬁnancial commodi-

Accounting Standard allows Japaneseties, and the recognition of deferred tax

ﬁrms to record deferred tax assets on theassets.

balance sheet and to recognize deferred

Pan (2005) tries to ﬁnd out if the Japa-

taxes as tax credits to at least mitigate thenese ﬁrmsʼchanging reporting behaviors

temporary diﬀerences that will otherwise

on extraordinary items are associatedappear on the income statement. Require-with the deferred taxes. Another major

ments of the Japanese Tax Eﬀect Ac-

point being argued in Pan (2005) is thecounting standard are much parallel totaxation gap between pretax incomes andthe U.S. Statement of Financial Account-net incomes. Suppose that a ﬁrm reports

ing Standards No. 109 (SFAS No. 109 ),exactly zero net income, then their tax

Accounting for Income Taxes. The Japa-

amount due should be zero. In othernese Tax Eﬀect Accounting standard also

words, if there are two 200 ﬁrms reportrequires the publicly traded ﬁrms to rec-pretax losses of 1 million JPY, then we

ognize deferred tax assets for tax credits

should also expect 200 ﬁrms report net

and tax loss carryforwards, deferred tax

losses of 1 million. In Pan (2005), theassets are reduced by valuation allow-

evidence of the taxation gap between

ances. I conjecture that with the intro-

pretax incomes and net incomes isduction of the deferred taxes,the taxation

presented in the form of a deviation on

gap should be mitigated.

the Burgstahler and Dichev (1997) earn-

To following section will introduce theings distribution lines at zero, provided

data and sample to address the taxationthat both of the numerators (pretax in-

issue in this study.

comes and net incomes) are deﬂated by
the same denominator (market capitaliJapanese government has another set

3. Sample, Scaling, and
Descriptive Statistics

of taxation accounting system to deter-

I study the data of Japanese ﬁrms frommine how much amount of taxes a ﬁrm

the ﬁscal year of March 1977 to March 200

has to pay. Since the Japanese ﬁrms are

4. The rest of this section will put an

not taxed according to their accounting

eﬀort on introducing how the samples areincomes, this is the reason why the lines

selected and how the data are collected.

zation).

1)of the distribution of net income anddistribution of pretax income do not

Sample Selection, NEEDS-FinancialQue-

match to each other at zero.

st, and the Survivorship Bias

As Japan instituted the Tax Eﬀect

Financial statement data and stock

Accounting into Japanese GAAP in theprice data to be used in this study are101

obtained from the NEEDS-FQ (Nikkei

to survive until the deferred taxes is a

Economic Electronic Databank System -

viable option to appear on the annual

FinancialQUEST) on-line database ser-report, then it should not be included invice. Nikkei NEEDS (Nikkei Economic

the sample for that we will compare one

Electronic Databank System) is a widely

to nothing.Second reason that older ﬁrms

used databank system in Japan which

are preferable in this study is that older

provides access to ﬁnancial data of theﬁrms have higher possibility to recognize

listed Japanese ﬁrms. The on-line service

and realized deferred tax assets. We al-provided by Nikkei is the NEEDS-FQ.

ready know that ﬁrms asses proﬁts fromThe NEEDS-FQ is a handy on-line

the unrealized book-market diﬀerences;

databank service which contains not only

therefore, the longer the ﬁrms exist, theﬁrmʼ
s ﬁnancial data but also some otherlarger the book-market diﬀerences are.

statistics numbers from bond prices toSince older Japanese ﬁrms have moreindustrial data. The NEEDS-FQ, howev-

assets with unrealized losses; therefore,

er, is designed for the business purposes.

the more assets with unrealized losses,theThe users are not able to draw the histori-

more deferred taxes the ﬁrms will recog-

cal data of those ﬁrms once listed in thenize. Such survivorship bias of NEEDS-

market but no longer exist now.This thus

FQ instead provides the data advantages

creates a high degree of survivorship bias

to this study.

problem for anyone who wishes to use the
NEEDS-FQ for academic researches.

Scaling

By drawing ﬁnancial data from the

Scaling factor in this study is the

NEEDS-FQ, this study also includes its

beginning-of-the-year market value ofindigenous survivorship bias problem.

common equity. Beginning-of-the-year

However this survivorship bias shouldmarket value of common equity is calcu-

not be the subject matter in this study.

lated by the numbers of the year-end

Since the purpose of this study is to exam-

outstanding common shares (in this stud-ine if the deferred taxes will alter they, numbers of the common shares thatJapanese ﬁrmsʼﬁnancial reporting once

outstand on M arch 31st) multiplying the

introduced, it is advantageous to include

price of the beginning-of-the-year com-these older ﬁrms and insure that the data

mon shares (in this study, price of com-is available before and after the deferred

mon shares on April 1st or the price of thetaxes are introduced. If a ﬁrm is not able

ﬁrst trading day in April). Therefore, theThe current Japanese Commercial Code was amended and taken into effect in fiscal year of M arch
1977. I exclude the pre-1977 data from my sample to avoid comparing firms operated under two typesof commercial code system.

102

Taxation Gap

beginning-of-the-year market value ofmarket value of assets. M any ﬁrms may

common equity being deﬁned in this stud-

have ﬁxed assets, for example land, ac-

y is indeed the beginning-of-the-next-year

quired at very low price many years ago.

market value of equity when compared to

Now the market value of the land may be

the beginning-of-the-year market value ofworth 50 times to 300 times more thancommon equity deﬁned in most existing

when it was acquired ; however, such

literature.

book-market diﬀerences are not adjusted

2)

The basic thought of the model of earn-in the balance sheet of Japanese ﬁrms.

ings in study is that earnings are generat-

Herrmann, Inoue and Thomas (2003)

ed by assets. Therefore, it is argued that

also found that Japanese ﬁrms assess

the total assets of the ﬁrm should be asuch unrealized proﬁts from the book-more preferable scaling factor to its mar-market diﬀerences to manage earnings by

ket value ofcommon equity.Durtschi andselling their assets.

Easton (2005) also argue that the discon-On the other hand, Japanese ﬁrms also

tinuity in the frequency distribution ofhave many unrealized losses within theirearnings at zero found in most US baseassets. During the bubble economy, there

studies is actually a result of using thewas a lot of money being put into the real

lagged market capitalization as theestate market. M any lands were pur-deﬂator. Indeed, market value of thechased and numerous buildings wereﬁrmʼ
s common equity includes the mar-built during the over-heated economy

ket anticipation of the ﬁrmʼs futureperiod. Those lands and building may

proﬁtability, and thus, it is a noisy meas-

only be now worth less than half of its

ure of earnings. However, when study

original value. Other unrealized losses

Japanese ﬁrms using total assets toinclude seriously devalued securities anddeﬂate the earnings measures should beother ﬁnancial assets.

avoided because of the diﬀerent assets

Hence, beginning-of-the-year market

components of the Japanese ﬁrms to thecapitalization is a much preferable

U.S. ﬁrms.

deﬂator over total assets to be used in thisThe average ﬁrm age of the Japanesestudy.

ﬁrms is much higher than their US counterparts. M ost of the long-establishedAccounting Income Measures

Japanese ﬁrms have huge diﬀerences be-

To insure the consistency of the sam-tween their book value of assets andple, only ﬁrms that end their ﬁscal year in

Beginning-of-the-year market value of common equity being defined in most existing is the price ofthecommon shares in the beginning of the year multiplying the numbers of the outstanding shares in theend of the year ; thus, lagged price.

103

M arch are included in the sample. The

deferred taxes appeared on the income

sample includes all available observa-

statement in March 2000. I compare thetions for the ﬁscal years of M arch 1977 to

diﬀerence between

M arch 2004. Following the methodologies

the eﬀects of the tax expenses on theused in most prior empirical researches inearnings distributions.

andto determine

the literature, ﬁnancial institutions and

The main purpose of this paper is toutilities ﬁrms are excluded from the sam-evaluate how ﬁrmsʼﬁnancial reportingple.

are being aﬀected by the tax eﬀect ac-

Two earnings measures, net income

counting, I break the study period intoand pretax income are examined in thisthe pre-introductory period from 1977 topaper. These earning measures are scaled

1999 ﬁscal year and the post-introductoryby the beginning-of-the-year market value

period from 2004 to 2004 ﬁscal year. Dur-of common equity. M arket value of com-

ing the pre-introductory period, themon equity is calculated by ﬁrmʼs year-diﬀerences between

end outstandingItemshares (NEEDS-FQ

FE032) m ultiplying

beginning-of-the-year3)

income taxes.

andinclude only

Since March 2000, theﬁrmʼ
sdeferred income taxes emerged as a tax-

share priceamount-adjustment item on the income(NEEDS-FQ Item M OPEN).

statement.

The reason why this study chooses

Since the distributions of the earningsﬁrmʼ
s market value of common equity as

measures are what this paper focuses on,

scaling factor over ﬁrmʼs total asset isany observation that is missing any num-that some long-established Japanesebers out of the three earnings is excluded

ﬁrms might have assets with huge book-from the sample. This last criterion

market diﬀerences.

results in a total of 21,776 observations.

Net income (NI, NEEDS-FQ Item
FC058) is the after tax earnings measure.

Table 1 documents the descriptive statistics of the two variables.

Pretax income (PRETAX, NEEDS-FQ

From Table 1, we can ﬁnd that theItem FC048) is the before tax earnings

standard deviations of all three income

measure. Taxes include income taxes andmeasures drastically increased since 1998.

the deferred income taxes. Note that the

The is because ﬁrms were given the op-tax eﬀect accounting became mandatorytion to record deferred taxes and deferredin 2000 ﬁscal year ; therefore, thetaxes assets two years prior to the Tax

Some Japanese ﬁrms compose their annual reports based on the U.S. FASB standard. In such case,“Extraordinary Items and Gain/Loss from Discontinued Operations” comes in between NI and
PRETAX. However, this is a rare case and there are only twenty some Japanese ﬁrms ﬁnancially ﬁling
under the U.S. GAAP.

104

Taxation Gap

Table 1
Scaled values of earning measures. Sample of 21,776 observations for 19 77‑2004.
NI

PRETAX

Year

N

M ean

Median Std.Dev.

Mean

M edian Std.Dve.

1977
1978

590
600

0.02650.02490.04040.03740.0806
0.06700.06950.06400.08240.07400.10640.0918

1979
1980

617
623

0.03740.05900.04030.05610.04780.04590.07890.11780.08000.11020.07510.0865

1981

627

0.05070.04830.04000.1032

0.09490.0728

1982
1983
1984
1985
1986

633
637
643
649
656

0.05240.03420.02850.03670.02320.04850.03810.03070.03450.02370.05700.06160.04540.03430.02910.11590.08330.06860.0816
0.05530.10620.08320.06580.07500.05250.10130.10480.07180.06070.0491

1987
1988
1989
1990
1991

682
691
704
721
734

0.01790.01850.02260.02090.02310.01950.01900.02080.01990.02300.03020.01740.01490.01240.01830.0471
0.04270.04850.04350.04790.04390.04170.04370.04180.04550.05070.03150.03080.02360.0306

1992
1993

772
784

0.02440.01050.02590.01890.03230.04430.0547
0.03670.05430.04310.04750.0586

1994
1995

800
826

0.00500.01230.01380.02040.04340.04590.02490.03780.03120.04350.05420.0596

1996
1997
1998
1999

848
883
921
942

0.01640.02580.0213−0.01930.02070.02970.03230.0216

0.03350.04150.07370.12930.04050.05840.05970.01520.04280.05990.06520.05080.04620.0572
0.09170.157116583

0.02330.05820.05930.02690.05590.0579

2000
2001
2002

965
1010
1047

−0.0052
0.0046−0.0336

0.02630.03270.02310.12990.13460.20100.01670.0270−0.0147

0.0532
0.0611
0.04420.18040.19710.2518

2003
2004

1080
1091

−0.02150.03070.03890.04170.24930.07790.02390.06890.08010.07500.26850.0928

Total

5193

−0.01430.03010.18790.01310.05930.2294

Total

21776

0.01590.0272

0.09870.04930.05630.1257Total

NI represents Net Income (NEEDS-FinancialQUEST Item FC058); PRETAX represents Pretax Income (NEEDS-FinancialQUEST Item FC048); and ORDNI represents Ordinary Income (NEEDSFinancialQUEST Item FC029 ). All variables are scaled by beginning-of-year market capitalization.

105

Eﬀect Accounting Principle became man-of the ﬁrms) increase and the scaled

datory in March 2000. What is interesting

diﬀerences between pretax income andus is that the number of the standard

net income become insigniﬁcant, these

deviations of all three income measures

two distribution lines eventually con-peaked in March 2003 and fell back to theverge.

1998 level in March 2004. This might sug-

The following ﬁgures document thegest that the increased ﬂuctuation inmean and median of the eﬀective tax

standard deviation might be a transitory

rates conditional on the pretax income.

phenomenon. Also note that it is not until

The eﬀective tax rates are measured by

1999 that Japanese ﬁrms started to report-

the tax expenses divided by the pretax

ing negative incomes.

incomes. Figure 1 documents the mean
and median eﬀective tax rates conditional

4. Taxation Gap on Accounting Income andTaxation Incomeof the pretax income from 1977 to 1999.

Another major point to be argued in

tax rate between -1% and 0% is more than

this study, as in Pan (2005), is the taxa-

400% of the ﬁrmsʼpretax income.In othertion gap between pretax incomes and net

words,ﬁrms are paying more than 4 times

incomes. Suppose that a ﬁrm reports ex-of their pretax incomes government for

actly zero net income, then their tax

taxes.

It is very obvious that there is a big
spike in Figure 2. The peak of the spike
represents that the mean of the eﬀective

amount due should be zero. Both of the

However, such spike is the result of thenumerators (pretax incomes and net in-scaling problems. Since the Japanesecomes) are deﬂated by the same denomi-ﬁrms are not taxed on their reportednator (market capitalization), such devi-

accounting incomes but a diﬀerent set ofation of distribution lines at zero is thetaxation accounting, Japanese ﬁrms areevidence of the taxation gap.

still taxed by the Japanese government

Japanese government has another set

even if they are reporting losses. Hence ifof taxation accounting system to deter-

the ﬁrm reports JPY 1 million pretax

mine how much amount of taxes a ﬁrm

incomes but the taxation requires the ﬁrm

needs to pay.Since the Japanese ﬁrms areto pay JPY 10 million taxes, the realized

not taxed according to their accounting

eﬀective tax rate for this ﬁrm will beincomes, this is the reason why the lines

1000%. So, this is the reason why theof the distribution of net income andposition of the spike is around zero.

distribution of pretax income do notmatch to each other at zero. With thevalues of the numerator (reported losses
106

Taxation Gap

Figure 2 documents the mean andbeing performed. The gap still exists.

median eﬀective tax rates conditional of

Figure 2 also presents another impor-the pretax income from 2000 to 2004. Astant evidence that the loss ﬁrms are repor-

we can see, the spike still exists. One ofting an average of 20% of negative tax

the major functions given to the deferred

rates.If a ﬁrm reports negative tax rate,ittax (or the Tax Eﬀect Accounting Princi-mean this ﬁrm is decreasing its deferredple) when it was introduced into Japa-

tax assets to increase its earnings.

nese GAAP was to mitigate the taxation
gap of accounting income. The spike in
Figure 2 suggests that such function is not
107Distribution of Excess Eﬀective Tax

tics of the excess eﬀective tax rates.ThereRates

are 530 observations of excess ETR found

The following ﬁgures document thefrom the 1977 to 1999 sample period while

excess eﬀective tax rates conditional on

269 observations are found during thepretax incomes. The excess eﬀective tax

2000 to 2004 sample period. Figure 3 andrate is deﬁned as eﬀective tax rates that

Figure 4 document the distributions ofthe

exceed positive 100% or negative 100%.

excess ETR conditional on the pretax

Table 3 documents the descriptive statis-

income in each period respectively.

108

Taxation Gap

Table 2
Descriptive statistics for proﬁt and loss ﬁrmes
1977‑1999
Negative NI (1,970 obvs)
VariabeNI
ETR
PRETAX

Positive NI (14,613 obvs)

%≠0

%＞0

−0.0754 −0.0407 0.0962 100.00％

0.00％

M ean
0.9819Median Std.Dve.
0.0550 4.4194

88.42％ 77.91％−0.0694 −0.0355 0.1042 100.00％ 16.60％

M ean M edian Std.Dev.

%≠0

%＞0

0.0366 0.0303 0.0285 100.00％ 100.00％
0.5348 0.5217 2.8176

98.29％

97.68％

0.0754 0.0630 0.0565 100.00％

99.71％

2000‑2004
Negative NI (1,227 obvs)
VariableNI
ETR
PRETAX

Positive NI (3,966 obvs)

%≠0

%＞0

−0.2023 −0.1152 0.2600 100.00％

0.00％

M ean

Median Std.Dev.

0.7313 −0.0310 4.4601

99.73％ 47.71％−0.2241 −0.1313 0.2886 100.00％

9.37％

M ean M edian Std.Dev.

%≠0

%＞0

0.0562 0.0456 0.0437 100.00％ 100.00％
0.3780 0.4482 2.1065

99.92％

96.29％

0.1019 0.0868 0.0813 100.00％

99.19％

See Table 1 for deﬁnitions of NI and PRETAX. ETR represents the eﬀective tax rate, caculated as income tax
expenses (NEEDS-FinancialQUEST Item FCO052＋NEEDS-FinancialQUEST Item FC052) devided by
PRETAX.

The implication drawn from the aboveeﬀective tax rate. The realized eﬀective

ﬁgures are the ranges where the excess

tax rate is income tax expenses (NEEDS-ETRs are distributed. Excess ETR inten-

FQ Item FC052 ＋ NEEDS-FQ Itemsively distribute between -0.05 to 0.05 ear-

FC052) divided by pretax income. The

nings intervals around zero in Figure 3.

mean ETR of ﬁrms that report negative

On the other hand, excess ETR distributenet income during 1977 to 1999 is 98%

in a wider range from -0.2 to 0.2 in Figure

while its median is only 5.5%. Such skew-

4. The represent that after the deferred

ness of the reported ETR can largely betaxes and deferred taxed assets are recog-

attributed to the taxation gap between

nized in Japanese GAAP, the managers

accounting income and taxation income.

have more discretionary power to choose

The same situation is also found in the

how many tax they are going to payto the2000 to 2004 period where mean ETR ofgovernment.

ﬁrms that report negative net income is

Table 2 reports the descriptive statistics

73% while its median is -3.1%.In additionof the proﬁt and loss ﬁrms. The proﬁt-to-

to the taxation gap problem, the deferredloss ﬁrm ratio during 1977-1999 is about 7.

taxes also contribute to the skewness of

42 whereas it is 3.24 in 2000-2004. This

the ETR since more than half of the ﬁrms

conﬁrms that this sample does include

report negative ETR in the 2000 to 2004

certain degree of survivorship bias in-period. On the other hand, the mean-digoes to the NEEDS-FQ.

median diﬀerences of ETR of the ﬁrms

The ETR in Table 2 shows the realizedthat report positive net income also in109

Table 3
Descriptive statistics for excess eﬀective tax rates.
1977‑1999
N
ETR＜−100％
ETR＞100％

Mean

Median29 −2.97108123 −1.75510204
501

4.76460814

SD
2.9469969

1.7037037 16.9876071

Max

Min

−1.04672897 −12.3636364
321.894737

1.00048193

2000‑2004
N
ETR＜−100％
ETR＞100％

Mean

MedianSD

62 −4.86474494 −1.65686275 15.0064014
207

5.2687047

1.94078947 10.1373919

Max

Min

−1.00495751−117.6875

97.5744681

1.00917431

1977‑1999
N
NI＜0
NI＞0

Mean

MedianSD409 −0.01531638 −0.00996486 0.01745331
121
0.00940756
0.00592534 0.0137353

Max

Min

−0.00022772 −0.11607782
0.10960906 2.2387E‑05

2000‑2004
N
NI＜0
NI＞0

Mean

MedianSD

177 −0.10838219 −0.03001998 0.27000347
92

0.03789971

0.01615208 0.04648068

Max

Min

−0.00058075−1.8647561

0.19940039

6.9621E‑05

1977‑1999
N
PRETAX＜0
PRETAX＞0

Mean
163
367

Median

SD

Max

Min

−0.0089212 −0.00483214 0.0112708
0.01426351
0.00859399 0.01895827−8.3313E‑06 −0.08293922
0.17307649 5.1235E‑05

Mean

Max

2000‑2004
N
PRETAX＜0
PRETAX＞0MedianSD

102 −0.08129383 −0.02064324 0.20065246
167
0.0279743
0.01808337 0.0316162

Min−8.4179E‑05 −1.51735503
0.18176128
0.00011863

crease in this period. Please also note thattax spike and increased numbers ofexcess

the average ETR of the 2000 to 2004 peri-

ETRs, to some extent, suggest that theod is much lower than the 1977 to 1999

introduction of the deferred taxes does

period.

not mitigate the taxation gap that haslong existed in the Japanese GAAP. How-

5. Concluding Remarks
The evidences presented in this paper,
110

ever, this paper does not provide any
empirical evidence to insure the credibility of the above conclusions drawn from

Taxation Gap

the evidences presented in this paper.

Miller, G., and D. Skinner, 1998. “Determinants

Future study on the same scope should beof the Valuation Allowance for Deferred Tax
Assets under SFAS No. 109.” Accounting
Review 73, 213‑233.

beneﬁted from empirically examining the
subject matters raised in this paper.
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Durtschi, C., and P. Easton, 2005. “Earnings
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