Profitable companies that pay little in income taxes aren’t necessarily indulging in risky management practices with their tax strategies, according to a new academic study.
The study, by professors David A. Guenther and Steven R. Matsunaga of the University of Oregon and Brian M. Williams of Indiana University, found tax avoidance activities that lower a company’s tax rate are not associated with a greater degree of risk. The study appears in the January/February issue of The Accounting Review, published by the American Accounting Association.
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