Tóm tắt: ẢNH HƯỞNG CỦA CHÊNH LỆCH GIỮA LỢI NHUẬN KẾ TOÁN VÀ THU NHẬP CHỊU THUẾ ĐẾN TÍNH ỔN ĐỊNH CỦA LỢI NHUẬN TẠI CÁC CÔNG TY NIÊM YẾT TRÊN THỊ TRƯỜNG CHỨNG KHOÁN VIỆT NAMCỦA CHÊNH LỆCH GIỮA LỢI NHUẬN KẾ TOÁN VÀ THU NHẬP CHỊU THUẾ ĐẾN TÍNH ỔN ĐỊNH CỦA LỢI

MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
*********

LE THI BAO NHU

THE EFFECT OF BOOK – TAX DIFFERENCES ON
EARNINGS PERSISTENCE
AT VIETNAM-LISTED COMPANIES

Major : Accounting
Code : 9340301

SUMMARY OF THE THESIS

HO CHI MINH CITY – 2022


The Thesis is prepared at:
University of Economics Ho Chi Minh City

Thesis supervisor:
Associate Professor, PhD. Mai Thi Hoang Minh

Reviewer 1:
...................................................................................................
Reviewer 2:
...................................................................................................
Reviewer 3:
...................................................................................................

The thesis will be presented to the Thesis Board at the
University of Economics Ho Chi Minh City.
At…….hours……...day…….month………year………


This Thesis can be found at the library of University of
Economics Ho Chi Minh City.


LIST OF RESEARCH WORKS OF AUTHOR
Le Thi Bao Nhu. The Impact of IFRS on Book – Tax Differences
and

Income

Tax

in

Vietnam,

International

Conference

Proceedings: Vietnam Accountancy Future and Prospects, 2019,
ISBN: 978-604-60-3012-6, pp. 315 – 318
Mai Thi Hoang Minh & Le Thi Bao Nhu. Book-tax differences
and Accounting conservatism – Evidence from Vietnam,
Vietnam's Social-economic Develop, ISSN: 0868-359X, Volume

24, Issue 2, Number 98 July 2019, pp. 47 – 62.
Le Thi Bao Nhu, Nguyen Thi Thu Hau & Nguyen Thi Khanh
Van. Impact of Book – tax differences on the settlement and audit
of corporate income tax, Review of Finance, ISSN: 2615-8973,
Issue 2, 2020 (739), pp. 52-54.
Le Thi Bao Nhu, Nguyen Thi Thu Hao & Nguyen Thi Hong
Hanh. Factors affecting the corporate income tax compliance in
private enterprises in Ba Ria – Vung Tau province, A sub-journal
of VNUHCM Journal of Science and Technology Development,
5(2), 2021, pp. 1576 – 1588.
Bui Quang Hung, Mai Thi Hoang Minh, Le Thi Bao Nhu. Discuss
the persistence of earnings and its components in enterprises,
Review of Finance, ISSN: 2615-8973, Issue 2, 2021 (761), pp. 4043.


1
INTRODUCTION

1. The necessity of the topic
Earnings quality has been extensively researched in the literature
(Kousenidis et al., 2013). Earnings persistence is regarded as a proxy
for earnings quality (P. Dechow et al, 2010; Mohammady, 2010;
Kousenidis et al, 2013). The difference between book income and
taxable income affects the earnings quality on financial statements,
so this information can help users forecast future earnings (Hanlon,
2005; Tang, 2006; Lev and Nissim, 2004; H. Choi et al, 2020). Some
policymakers and journalists argue that disclosure of information on
book-tax differences (BTD) and companies with large BTD is
required because these companies may be manipulating data for the
accounting, tax, or both purposes (Hanlon and Heitzman, 2010).

Many recent studies on the relationship between BTD and
persistence of earnings and accruals, such as Mills and Newberry
(2001), have provided evidence that the magnitude of BTD has a
positive relationship with many financial statement items. Phillips et
al. (2003) expand on this study, demonstrating that deferred tax
expense provides useful information about earnings management via
total accruals and discretionary accruals from the Jones (1991) and
Modified Jones (1991) models (Patricia M. Dechow et al., 1995).
According to Joos et al. (2000), when BTD (in absolute value) is
large, the relationship between pre-tax and after-tax earnings is
weaker, indicating that the manager should use BTD as an
opportunity for earnings management.
Investors will recognize that earnings have been managed, lowering


2
their confidence in reported earnings. BTD affects earnings and
accruals quality (Blaylock et al, 2012; Hanlon, 2005; Xie, 2001).
Similarly, Blaylock et al. (2012) demonstrate that BTD sources from
earnings management, tax avoidance, and differences between
accounting and tax regulations all affect the persistence of earnings
and accruals. Tang (2007) provides some empirical evidence that
BTD is useful for earnings management and tax management after
accounting and tax differences in data recognition on reports are
removed. It can be seen that previous studies focused on managers'
perceptions of recording accruals without considering cash flow
persistence; this issue was mentioned in (Hanlon, 2005) but did not
conduct experimental research (Jeong and Choi, 2019).
Since 2013, Vietnam's tax policy has been regularly revised not only
to help businesses but also to improve corporate income tax

compliance (Loan et al., 2018). Tax evasion is becoming more
common, as both foreign and domestic businesses use loopholes and
incentives in Vietnam's corporate income tax law to reduce their tax
obligations. This situation reduces the state's revenue, which can lead
to inequitable social resource allocation and have a negative impact
on the economy (Ha et al., 2021). Due to concerns about tax evasion,
corporate income tax inspection is becoming more interested and
enhanced, thereby increasing government revenue and increasing tax
rates for taxpayers.
At the same time, the problem of data differences before and after the
audit is emerging in Vietnam's stock market, particularly in earnings
(Nguyễn Việt and Nguyễn Văn Hưng, 2017). Therefore, it is also
necessary to analyze and comprehend information about BTD, such
as the distinction between book and taxable income, the persistence


3
of earnings, and their components. Although there have been
extensive studies on BTD and its relationship with the persistence of
earnings and accruals around the world, there has been little research
to clarify the above issue for enterprises in developing countries like
Vietnam.
At the same time, Vietnam is gradually integrating into international
accounting, moving closer to IFRS, with Circular No. 200/2014/TTBTC (Circular 200) being promulgated for the presentation of
financial statements since 2015 (Phan et al., 2018).
From the foregoing, the thesis' main contribution is to address the
shortcomings of previous studies based on (Blaylock et al., 2012;
Hanlon, 2005) to examine the influence of BTD on the persistence of
earnings and earnings components at companies listed on the
Vietnam stock exchange over the last ten years.

As previously stated, BTD is the difference between book and
taxable income. The study differs from previous studies in three
ways: (1) it compares the persistence of earnings and their
components before and after the implementation of Circular 200; (2)
it considers the effect of BTD and its source on the persistence of
cash flow, thereby assessing earnings persistence; and (3) it
compares the effects of BTD and its source on the persistence of
earnings and their components over the two research periods.
Furthermore, the method for calculating BTD, as well as identifying
observations in the group of earnings management or tax avoidance,
is all based on new approaches that are appropriate in the Vietnam
context and eliminate the influence of the corporate tax rate changes
in recent years.
2. The economic context of Vietnam


4
3. Research objective
This thesis aims to measure the persistence of earnings and their
components and determine the influence of BTD and the source of
BTD on this persistence. The thesis also explores the difference
between the persistence of earnings and their components under the
influence of BTD through the period of applying the accounting
regime in Vietnam.
4. Research questions
The thesis focuses on answering the following questions in order to
achieve the research goal:
Question 1: How is the persistence of earnings and their components
in Vietnam? Is there a difference in persistence before and after the
application of Circular 200?

Question 2: How does BTD affect earnings persistence and its
components? Is there a difference between this effect before and
after the application of Circular 200?
Question 3: How do the sources of BTD affect earnings persistence
and its components? Is there a difference between this effect before
and after the application of Circular 200?
5. Subjects and scope of the research
5.1 Research subjects
Research subjects include: The persistence of earnings, the
persistence of earnings components, BTD, source of BTD at
Vietnam-listed companies
5.2 The scope of research
Vietnam listed companies, including the Ho Chi Minh Stock
Exchange (HOSE) and Hanoi Stock Exchange (HNX) with data
collected from 2010 to 2019. This is the time when listed companies'


5
financial statements are made available in their entirety. At the same
time, the company's operations are hampered by an adverse
operating environment, such as the Covid-19 epidemic that ravaged
Vietnam in 2020 and 2021, affecting earnings and financial targets.
Therefore, the author did not update this study period over the course
of two years.
Excluded from the sample of companies: (1) There are few
observations collected due to the new listing, (2) companies in the
banking, finance, and insurance industries due to their specific
operating regulations, (3) companies that do not collect the necessary
data in their financial statements for three consecutive years, (4)
companies do not apply 200 after 2014.

6. Research methodology
7. The thesis’ contribution
Theoretical contributions
The study adds to the theory by incorporating four factors. First, the
thesis validates the literature on BTD, earnings persistence, and
earnings components in the context of Vietnam. Second, the study
provides evidence on the effect of BTD on earnings persistence and
its components in Vietnam. Third, employ the partition approach to
examine the impact of BTD source on the persistence of earnings
and earnings components. Finally, the thesis demonstrates the effect
of the accounting regime on earnings persistence by comparing
results before and after the application of Circular 200. This
accounting regime's impact on earnings persistence is also
demonstrated in the thesis. These are important for accounting and
tax research, as well as broadening understanding of the relationship
between BTD and earnings persistence, as well as its components, in


6
the Vietnamese context. The study also serves as a foundation for
future research on BTD, their source, earnings persistence, and its
components.
Practical contributions
The findings contribute to improving the quality of predicting future
earnings by clarifying the persistence of earnings and their
components; as a result, it is important for investors and shareholders
to analyze the future financial position in order to make effective
investment decisions and competitive strategies...
Managers and chief accountants have more information to manage
earnings and improve earnings quality, update tax-accounting

regulations, and comply with the regulations of recording
transactions in periods of applying different accounting regimes after
studying the influence of BTD and its source on the persistence of
earnings and its components.
Furthermore, the findings will be used to provide state agencies and
policymakers with more information to help them manage businesses
and develop scientific accounting and tax principles and regimes that
adhere to international accounting standards.
8. Structure of the thesis
Chapter 1: Research overview
Chapter 2: Theoretical basis and research hypothesis
Chapter 3: Research methodology
Chapter 4: Research results and discussion
Chapter 5: Conclusion and implications


7

CHAPTER 1: RESEARCH OVERVIEW
1.1. Relevant studies
1.1.1. Research on the persistence of earnings and their
components
1.1.2. Research on the effect of BTD on the persistence of
earnings and its components
1.1.3. Effects of BTD’s source on the persistence of earnings and
its components
1.2. Results from previous studies
Research on the persistence of earnings and their components
So early on, studies on the persistence of earnings and their
components were conducted (since 1969). The researchers mostly

proved that earnings are persistent, with current year earnings
influencing future year earnings using a variety of methods. At the
same time, the components of current year earnings affect future
earnings, with the cash flow component being more persistent and
having a greater impact on future earnings than the accruals
component.
Research on the effect of BTD on the persistence of earnings and
its components
The relationship between BTD and earnings quality has primarily
been studied in two directions, which will be the basis for many
future studies:


8
In the first direction, Lev and Nissim (2004) demonstrate that total
BTD provides information about future earnings, whereas temporary
BTD is unrelated to earnings change.
The second direction shows that temporary BTD has a negative
effect on the persistence of pre-tax earnings (Hanlon, 2005; Phillips
et al., 2003).
Following these two lines of inquiry, the authors later classified
BTDs and investigated their impact on earnings persistence.
Depending on the research perspective and the institutional
environment, each of the above categories has different implications
for the persistence of earnings and their components. The majority of
studies found that BTD has a positive (or negative) impact on
earnings and accruals persistence. However, when controlling for
factors such as years of operation, each country's legal system, and
shareholder information needs, the results are inconsistent. There are
very few studies on the relationship between BTD and the cash flow

component, and the results of these studies are also heterogeneous,
mainly concentrated in developed countries with relatively stable
accounting and tax systems. There is rarely a paper on the impact of
BTD on the persistence of earnings and its components in developing
countries.
Study on the influence of the BTD’s source on the persistence of
earnings and its components
According to global studies, the source of BTD is tax avoidance,
earnings management, or the difference between accounting
regulation and tax law. Depending on the sample and research
method, the influence of the aforementioned sources on the
persistence of earnings and accruals components can be positive or


9
negative. There have been few studies on the effects of BTD sources
on cash flow persistence.
There are few published reports in Vietnam on the effects of BTD
and the sources of BTD on earnings persistence and its components.
However, there have been some studies on the persistence of
earnings and its components, as well as other studies on the factors
influencing earnings quality and how BTD affects financial
statement information. Furthermore, a few studies discuss how
factors such as earnings management, tax avoidance, and the
disparity between accounting regulations and tax law affect
performance. There are few articles on this topic, and the research
method is still simple, but it provides some evidence and directions
for future research. There are still gaps in the literature in Vietnam
and other developing countries regarding earnings persistence and
earnings prediction under the influence of BTD that need to be

investigated.
1.3. Research gap
For starters, there is rarely research that provides a comprehensive
view of the persistence of earnings and their components for
Vietnam-listed companies over the last ten years.
Second, there has been little research on the impact of BTD on the
accruals and cash flow components.
Third, there has been little research on the effects of BTD on the
persistence of earnings and its components in developing countries,
including Vietnam.
Fourth, there have been few papers on the effects of BTD sources on
earnings persistence and its components in developing countries such
as Vietnam.


10

CONCLUSION CHAPTER 1

CHAPTER 2: THEORETICAL BASIS AND RESEARCH
HYPOTHESIS
2.1. Research concepts
2.1.1. Book income
A period's book income is the gain or loss before deducting corporate
income tax. According to accounting regulations, book income is
calculated as the difference between total revenue and total cost for
the period.
2.1.2. Income taxes
The gain (or loss) in the period used to calculate the amount of CIT
that the business must pay is referred to as taxable income (or

recovery). The provisions of tax law are used to determine these
gains (or losses).
2.1.3. Persistence of earnings
Earnings persistence is an indicator of earnings quality. Earnings
persistence means that earnings from the current year can be
maintained and persisted in earnings from the following year.
Earnings are persistent in terms of econometrics if the value is
constant or if the value over time follows the probability distribution.
2.1.4. Persistence of earningscomponents
Earnings components are persistent, which means that their value in
the current year will be maintained and persisted in the future.


11
According to Wells (2007), if the earnings components have different
persistence, the earnings persistence will be affected; thus, these
components all provide predictive information about future earnings.
2.1.5. Difference between accounting earnings and taxable
income
BTD is the difference between data recognized under accounting
principles and data recognized under current tax law.
2.1.6. Sources of BTD
Earnings management (EM), tax avoidance (TAXAVOIDER), and
differences arising from differences in accounting and tax
recognition (BASE) all contribute to temporary BTD (Hanlon, 2005;
Frankel and Litov, 2009; Blaylock et al, 2012).
2.2. Background theory
2.2.1. Decision usefulness theory
Decision usefulness theory builds on financial accounting's
informational ability to assist users in making informed decisions

(Scott, 2015; Gray et al., 1995). According to this theory, the primary
purpose of financial statements is to provide useful and relevant
information to users for them to make economic decisions. The
concept of profit-cost balance is also addressed by decision
usefulness theory, which is an important factor to consider when
establishing accounting standards (J. Godfrey et al., 2003).
2.2.2. Stakeholder theory
Stakeholder

theory

originated

from

Freman's

(1984)

on

organizational governance and business ethics. According to this
theory, the organization must treat its stakeholders fairly, and if an
interesting conflict arises, the business must strike an optimal
balance between the parties.


12
2.2.3. Agency theory
The agency theory (or the theory between the principal and the

agent) is a classical theory in economics, first mentioned by Ross
(1973). This theory explains the relationship between two parties,
namely the principal (such as shareholders, owners, etc.) and
representatives (such as managers, executives, etc.), in which the
principal hires the representative to perform some work based on the
contract and the binding conditions in order to minimize the potential
negative consequences (Jensen and Meckling, 1976).
2.2.4. Positive accounting theory
Positive accounting theory focuses on the relationships that exist
between the various individuals involved in providing resources to
an organization, as well as the accounting methods that can be used
to support these relationships (Deegan et al. Unerman, 2006).
According to (Deegan and Unerman, 2006), managers will take
advantage of the benefit themselves, and organizations will
implement rules to align managers' interests with the owner's.
2.3. Formulation of research hypothesis
2.3.1. Persistence of earnings and earnings components
H1: Earnings are persistent and can explain future earnings
H2: Among the earnings components, cash flow is more persistent
than accruals
2.3.2. BTD affects the earnings persistence
H3: Firms with a large BTD have a lower earnings persistence than
firms with a small BTD
2.3.3. BTD affects the persistence of earnings components
H4a: Firms with large BTD have lower persistence of accruals than
firms with small BTD.


13
H4b: A company with a large BTD has a lower persistence of the

cash flow than a company with a small BTD.
2.3.4. Effects of BTD’s sources on the persistence of earnings and
its components
H5a: For firm-years with large positive BTD, the persistence of
earnings for the earnings management (EM) subsample is lower than
for the BASE subsample.
H5b: For firm-years with large positive BTD, the persistence of
accruals and cash flow for the earnings management (EM)
subsample are lower than for the BASE subsample.
H6a: For firm-years with large positive BTD, the persistence of
earnings for the tax avoider (TAXAVOIDER) subsample is higher
than for the BASE subsample.
H6b: For firm-years with large positive BTD the persistence of
accruals and cash flow for the tax avoider (TAXAVOIDER) is higher
than for the BASE subsample.
2.4. Background in Vietnam
In the context of integration, Vietnam made significant changes to
reform the legal framework in order to develop the accounting-audit
service industry, such as the adoption of the Accounting Law in
2015. Circular 200, which went into effect on January 1, 2015, had a
significant impact on the entire accounting system, assisting in the
updating of the most popular international regulations to reflect
reality in Vietnam, thereby improving transparency and promoting
business investment. This circular demonstrates a shift in Vietnam's
accounting regime toward integration with international practices,
such as valuing nature over form and flexibility in accounting
documents, separating accounting and tax regulations… (Tran Thi


14

Quyen, 2020).
The impact of the new accounting regime on Vietnamese accounting
has also been studied by many authors.
CONCLUSION CHAPTER 2
CHAPTER 3: RESEARCH METHODOLOGY

3.1. Research methods and research process
3.1.1. Research methods
The author employs a quantitative method, which is also employed
by (Hanlon, 2005; Blaylock et al., 2012), based on the thesis
objective, the thesis contribution, and the approach to measuring the
variables. Stata software was used for quantitative analysis.
3.1.2. Research process
3.2. The persistence of earnings and earnings components
PTBIt+1 = β0 + β1PTBIt + εt+1

(1)

PTBIt+1 = γ0 + γ1PTCFt + γ2PTACCt + εt+1

(2)

In there,
PTBIt is the pretax accounting income scaled by average total assets
in year t,
PTBIt

+1

is the pretax accounting income scaled by average total

assets in year t+1
PTCFt is the pre-tax cash flow scaled by average total assets in year t
PTACCt is the pretax accruals scaled by average total assets year t
3.3. The effect of BTD on the persistence of earnings and
earnings components


15
PTBIt+1 = γ0 + γ1LNBTDt + γ2LPBTDt + γ3PTBIt + γ4PTBIt*LNBTDt +
γ5PTBIt*LPBTDt + ε t+1
PTBI
+

t+1

(3)

= γ0+ γ1LNBTDt + γ2LPBTDt + γ3PTCFt + γ4PTCFt*LNBTDt

γ5PTCFt*LPBTDt

+

γ6PTACCt

+

γ7PTACCt*LNBTDt

+

γ8PTACCt*LPBTDt + εt+1 (4)
LPBTD (large positive BTD), namely group 1: are firm-years with
accounting income > taxable income, have an average BTD/TS ratio
greater than 0 and in 1/3 of the sample from the top group.
LNBTD (large negative BTD), namely group 3: are firm-years with
accounting income < taxable income, have an average BTD/TS ratio
less than 0 and account for about 1/3 of the sample from the bottom
group.
SBTD (small BTD), namely group 2: are the remaining firm-years,
whose average BTD/TS ratio fluctuates around 0 and is not in group
1 or group 3.
3.4. Partitioning LPBTD firms based on sources of BTD
Firm years in the earnings management (EM) subsamples are those
with the highest positive discretionary accruals (DAs) (accounting
for 20% of the sample), belong to the LPBTD group, and are coded
as EM.
Tax avoidance group (TAXAVOIDER)
Approach 1: Firm-years with the largest cash effective tax rate
difference (CASHETR_D) (accounting for 1/3 of the sample,
belonging to the LPBTD group and coded as TAXAVOIDER).
Approach 2: Being firm-years in the LPBTD group for 2 consecutive
years or more and not in the EM subsample.
The remaining (BASE) is which firm years whose LPBTD arises
from objective differences of accounting regulations and tax law and


16
do not belong to two sources and are coded as BASE. These are the

firm years that remain after the others have been coded as EM and
TAXAVOIDER.
3.5. Examining the sources of BTD to the persistence of earnings
and earnings components
3.5.1. Examining the sources of BTD to the earnings persistence
PTBIt+1 = γ0+ γ1EMt + γ2TAXAVOIDERt + γ3PTBIt + γ4PTBIt*EMt +
γ5PTBIt*TAXAVOIDERt + ε t+1

(5)

EM equals 1 when firm i firms in the earnings management (EM)
subsample in year t, and 0 otherwise
The TAXAVOIDER equals 1 when firm i firms in the tax avoider
(TAXAVOIDER) subsample in year t, and 0 otherwise
3.5.2. Examining the sources of BTD to the persistence of
earnings components
PTBIt+1 = γ0+ γ1EMt + γ2TAXAVOIDERt + γ3PTCFt + γ4PTCFt*EMt +
γ5PTCFt*TAXAVOIDERt

+

γ6PTACCt

+

γ7PTACCt*EMt

+

γ8PTACCt*TAXAVOIDERt + ε t+1 (6)

3.6. Data collection and analysis
3.6.1. Observational data and patterns
Except for those companies that did not meet the criteria, data was
collected on listed companies on the two stock exchanges in Ho Chi
Minh City (HOSE) and Hanoi (HNX) from 2009 to 2019. There are
558 companies in the sample.
3.6.2. Panel data
3.6.3. Data analysis process

CONCLUSION CHAPTER 3


17

CHAPTER 4: RESEARCH RESULTS AND DISCUSSION

4.1. Descriptive statistics
4.2. Correlation and multicollinearity testing
4.2.1. Pearson correlation analysis
4.2.2. Multicollinearity testing
4.3. Selection Method of Regression
4.3.1. POLS and FEM
4.3.2. POLS and REM
4.3.3. FEM and REM
Equations (1) and (2) are suitable for running OLS
Equations (3), (4), (5), and (6) are suitable for running FEM
4.4. Heteroskedasticity test
There are heteroskedastic equations (3), (4), (5), and (6) at a
significance level of 1%.
4.5. Residual autocorrelation test

Autocorrelation occurs at a significance level of 1% in equations (3),
(4), (5), and (6).
The author runs FGLS to overcome the defects of the research
model.


18
4.6. Regression analysis
Table 4.22. Summary of research results
Hypothesis H1: PTBI t+1 = β0 + β1PTBIt + ε t+1
Coefficient Expected
2010-2014
2015-2019
β0
x
x
x
β1
+
+
+
HypothesisH2: PTBI t+1 = γ0 + γ1PTCFt + γ2PTACCt + ε t+1
Coefficient Expected
2010-2014
2015-2019
γ0
x
x
x
γ1

+
+
+
γ2
+
+
+
HypothesisH3: PTBIt+1 = γ0 + γ1LNBTDt + γ2LPBTDt + γ3PTBIt +
γ4PTBIt*LNBTDt + γ5PTBIt*LPBTDt + ε t+1
Coefficient Expected
2010-2014
2015-2019
γ0
x
x
x
γ1
x
x
x
γ2
x
x
x
γ3
+
+
+
γ4
γ5

No effect
HypothesisH4a and H4b: PTBIt+1 = γ0 + γ1LNBTDt + γ2LPBTDt + γ3PTCFt
+ γ4PTCFt*LNBTDt + γ5PTCFt*LPBTDt + γ6PTACCt + γ7PTACCt*LNBTDt
+ γ8PTACCt*LPBTDt + εt+1
Coefficient Expected
2010-2014
2015-2019
γ0
x
x
x
γ1
x
x
x
γ2
x
x
x
γ3
+
+
+
γ4
γ5
No effect
+
γ6
+
+

γ7
γ8
No effect


19
HypothesisH5a and H5b: PTBI t+1 = γ0+ γ1EMt + γ2TAXAVOIDERt +
γ3PTBIt + γ4PTBIt*EMt + γ5PTBIt*TAXAVOIDERt + εt+1
2010-2014
2015-2019
Coefficient Expected
Apprach 1 Apprach 2 Apprach 1 Apprach 2
γ0
x
x
x
x
x
γ1
x
x
x
x
x
γ2
x
x
x
x
x

γ3
+
+
+
+
+
γ4
No effect No effect
γ5
+
+
+
HypothesisH6a and H6b: PTBIt+1 = γ0+ γ1EMt + γ2TAXAVOIDERt +
γ3PTCFt + γ4PTCFt*EMt + γ5PTCFt*TAXAVOIDERt + γ6PTACCt +
γ7PTACCt*EMt + γ8PTACCt*TAXAVOIDERt + ε t+1
2010-2014
2015-2019
Coefficient Expected
Apprach 1 Apprach 2 Apprach 1 Apprach 2
γ0
x
x
x
x
x
γ1
x
x
x
x

x
γ2
x
x
x
x
x
γ3
+
+
+
+
+
γ4
No effect No effect
γ5
+
No effect No effect
+
+
γ6
+
+
+
+
+
γ7
No effect No effect
γ8
+

No effect No effect
+
+

4.7. Discussing research results
CONCLUSION CHAPTER 4


20

CHAPTER 5: CONCLUSIONS AND MANAGEMENT
IMPLICATIONS

5.1. Conclusion
5.2. Contributions
5.2.1. Theoretical contributions
5.1.1.1. For research on the earnings persistence
The thesis adds to the body of evidence on earnings persistence and
has implications for earnings quality research.
5.1.1.2. For research on the effect of BTD on the persistence of
earnings and their components
The thesis adds to the body of evidence on the effect of BTD on
earnings persistence and its components, as follows:
• Earnings are influenced by BTD.
• BTD has an impact on earnings components.
• BTD sources and components influencing earnings persistence
5.1.1.3. For research on financial accounting in general
The thesis is one of the few studies to investigate the impact of BTD
and its sources on cash flow persistence to future earnings and to

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provide more evidence for judgment and decision-making based on
BTD.
The results also show that the earnings persistence and component
persistence did not change significantly when moving from Decision
15/2006/QD-BTC to Circular 200. However, the persistence is
significantly different for firm-years with book income that is
significantly greater than taxable income.
5.2.2. Contribution to practice
The findings provide evidence for policymakers to use in developing
relevant circulars and accounting regulations to improve earnings
persistence and quality; developing strategic plans for the
development of accounting and auditing systems to ensure effective
state governance; supervising accounting and auditing activities; and
enforcing accounting regulation and tax laws at enterprises.
The effect of BTD on earnings persistence and its components will
provide more information for investors to use in making decisions.
The findings are significant in raising awareness about the
importance of accounting indicators among chief accountants and
administrators. This information can be used by administrators for
executive management.
5.3. Some management implications
5.3.1. For policymakers
Professional associations need to actively contribute ideas to improve
financial statement presentation documents and disclose more
complete information to assist investors and analysts in evaluating
the persistence of current earnings and their components. Accounting
and tax information disclosure reduces the asymmetric information
situation between internal and external entities.