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Sonja Rego - Indiana University, Kelley School of Business. Bloomington, IN, US

Sonja Rego Sonja Rego

Professor of Accounting | Indiana University, Kelley School of Business

Bloomington, IN, UNITED STATES

Professor Rego specializes in taxes and business strategy

Secondary Titles (1)

  • Deloitte Foundation Accounting Faculty Fellow

Social

Industry Expertise (3)

Accounting Education/Learning Research

Areas of Expertise (6)

Taxes and Business Strategy Tax Avoidance Accounting for Income Taxes Earnings Management Agency Theory Corporate Finance

Accomplishments (4)

Teaching Award (professional)

2015

Awarded by Kelley School of Business Trustees

Distinguished Teaching Award

2014

Awarded by Doctoral Student Association Faculty, Kelley School of Business, Indiana University

Citations of Excellence Award (professional)

2013

Awarded by Emerald Publishing

Tax Manuscript Award (professional)

2011

Awarded by the American Taxation Association

Education (4)

University of Michigan: Ph.D., Accounting 1999

University of Michigan: M.A.E., Economics 1999

University of Illinois at Chicago: M.B.A., Accounting and International Business 1991

University of Illinois at Urbana-Champaign: B.S., Finance 1989

Articles (5)

Material Weaknesses in Tax-Related Internal Controls and Last Chance Earnings Management The Journal of the American Taxation Association

2016

We investigate the consequences of tax-related internal control material weaknesses (ICMWs) for financial reporting. We hypothesize that the presence of ineffective controls over the tax function makes earnings management through the income tax accrual (both income-increasing and income-decreasing) easier to implement relative to firms with effective controls. We also predict that the remediation of tax-related ICMWs has the effect of constraining earnings management through the tax accrual. The results provide support for our predictions. We also find that last chance ...

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The Impact of Increased Disclosure Requirements and the Standardization of Accounting Practices on Earnings Management Through the Reserve for Income Taxes Review of Accounting Studies

2015

We examine whether the regulatory changes required by the Sarbanes–Oxley Act of 2002 (SOX) and Financial Accounting Standards Board Interpretation No. (FIN) 48 reduced the propensity for earnings management through the reserve for income taxes. Given prior evidence that firms use this reserve to manage earnings to beat the consensus analyst forecast, the regulatory changes implemented by both SOX and FIN 48 allow us to study the effects of accounting regulation on earnings management. We find that neither SOX nor FIN 48 reduced earnings ...

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The Separation of Ownership and Control and Corporate Tax Avoidance Journal of Accounting and Economics

2013

We examine whether variation in the separation of ownership and control influences the tax practices of private firms with different ownership structures. Fama and Jensen (1983) assert that when equity ownership and corporate decision-making are concentrated in just a small number of decision-makers, these owner-managers will likely be more risk averse and thus less willing to invest in risky projects. Because tax avoidance is a risky activity that can impose significant costs on a firm, we predict that firms with greater concentrations of ownership and control, and ...

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Equity Risk Incentives and Corporate Tax Aggressiveness Journal of Accounting Research

2012

This study examines equity risk incentives as one determinant of corporate tax aggressiveness. Prior research finds that equity risk incentives motivate managers to make risky investment and financing decisions, since risky activities increase stock return volatility and the value of stock option portfolios. Aggressive tax strategies involve significant uncertainty and can impose costs on both firms and managers. As a result, managers must be incentivized to engage in risky tax avoidance that is expected to generate net benefits for the firm and its shareholders. We predict that ...

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Tax Reporting Aggressiveness and Its Relation to Aggressive Financial Reporting The Accounting Review

2009

We investigate the association between aggressive tax and financial reporting and find a strong, positive relation. Our results suggest that insufficient costs exist to offset financial and tax reporting incentives, such that nonconformity between financial accounting standards and tax law allows firms to manage book income upward and taxable income downward in the same reporting period. To examine the relation between these aggressive reporting behaviors, we develop a measure of tax reporting aggressiveness that statistically detects tax shelter activity at least as well as, and ...

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