Abstract

The relationship between tax and financial reporting has deferred widely over time. The connection between accounting and taxation can provide negative effects; such as earnings management for fiscal purposes and value relevance distortion. This leads to an optimal and efficient looking on the nature of the relation that should bring them together. Few studies have focused on this relationship in some countries, but no research has been applied in the context of Tunisia using an empirical model. In this paper, we analyze within this framework the Tunisian case. We specified a longitudinal dimension of tax and financial reporting association through the separation of two periods of evolution. We collected information about the different accounting and fiscal treatments of seventeen substantial accounting topics from 1968 to 2013, and we assessed them using five cases of connection or disconnection. The results show that even in the case of the lack of accounting standards, there is a total disconnection between accounting and taxation in Tunisia. We also found that the relationship between accounting and taxation in this country was a typical of continental European countries before accounting normalization. After the Tunisian accounting system implementation, the nature of this relationship has changed to the Anglo-Saxon system.

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