Tax avoidance that reduces transfers from shareholders to the government is traditionally viewed as value enhancing to shareholders. The agency perspective of tax avoidance, however, suggests that opportunistic managers may exploit the obfuscatory nature of tax avoidance to mask rent extraction....

This study reexamines the evidence underlying the prior conclusion that investors overreact to accruals accruals are negatively associated with subsequent abnormal returns (i.e., the accrual anomaly). This study shows that the two features of the research design used to document the accrual...