Cookie Jar Accounting for Foreign Subsidiaries

15 Pages Posted: 9 Jul 2015

See all articles by Virginia Fullwood

Virginia Fullwood

Texas A&M University (TAMU), Commerce

Tim Wilson

Columbus State University

Date Written: 2012

Abstract

Current tax policy encourages U.S. corporations to use an accounting method, “cookie jar accounting”, to report income. For financial accounting, cookie jar accounting is generally associated with financial statement fraud and concealing illegal acts. For tax purposes, cookie jar accounting is accepted as tax avoidance. The purpose of this paper is to compare cookie jar accounting for financial and tax reporting, consider the consequences of tax cookie jars, and suggest an end to current tax policies favoring tax cookie jars.

Suggested Citation

Fullwood, Virginia and Wilson, Tim, Cookie Jar Accounting for Foreign Subsidiaries (2012). Journal of Applied Financial Research, Vol II, 2012, 23-36, Available at SSRN: https://ssrn.com/abstract=2627845

Virginia Fullwood (Contact Author)

Texas A&M University (TAMU), Commerce ( email )

2600 South Neal Street
Commerce, TX 75428
United States

Tim Wilson

Columbus State University ( email )

Columbus, GA 31907-5645
United States

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