The extent of the practice of earnings management for tax motives by Palestinian companies from the standpoint of income tax officials in Gaza Strip- a field study.

Abstract

This study aims to identify the extent of the
practice of earnings management for tax motives
by Palestinian companies in the Gaza Strip and
most commonly used techniques of earnings
management and the role of the income tax officials
to discover and reduce them. To achieve this goal,
a questionnaire designed and distributed to the
population of the study consisting of directors of
departments in income tax and employees in the
sections of senior financiers and companies and
their number is (35) . The population of the study was
limited because of the small size of the community.
) 32) of the questionnaires have been returned. The
questionnaire and test hypotheses have been analyzed
by statistical program SPSS. The most important
findings of this study were: there is a practice
for the earnings management for tax motives by
Palestinian companies in the Gaza strip regardless
of ownership type. And most public shareholding
companies practice for the management of profits
for motives of tax. The manipulation in putting loans
premiums and benefits on the financial periods,
and manipulation in foreign exchange rates in the
financial statements is the practice of earnings
management techniques commonly used by those
companies. This study recommended to work in
order to increase awareness of the accountants
for harmful effects that result from the practice of
earnings management in general and its practice for
motives of tax in particular through training courses
for accountants and auditors to establish the rules
and etiquette and behavior of the profession. The
authorities in the must work on issuing laws that
allow the imposition of material and moral sanctions
against companies that practice the management of
the profits. In addition, increasing the capacity of
income tax staff in detecting earnings management
through specialized training programs. Important
findings of this study were, there is a practice for the
earnings management for tax motives by Palestinian
companies in the Gaza strip regardless of ownership
type.