TY - UNPB

T1 - Determinants of voluntary accounting policy choices by Australian life insurers

AU - Klumpes, P J M

PY - 1997

Y1 - 1997

N2 - This paper empirically examines various incentives facing managers of Australian life insurers to voluntarily use actuarial-based income smoothing techniques (AIS). AIS were subsequently incorporated into jointly-developed Australian and New Zealand life insurance accounting standards (LIAS) issued in 1997. The propensity of managers to voluntarily use AIS is predicted to be related to the firm s tax rate, ownership structure, size, expense ratio and solvency. These predictions were tested on a sample of 28 firms during the period 1992-93. Empirical results suggest that firms using AIS tend to be larger, pay higher levels of income tax and are less likely to contravene minimum solvency requirements.

AB - This paper empirically examines various incentives facing managers of Australian life insurers to voluntarily use actuarial-based income smoothing techniques (AIS). AIS were subsequently incorporated into jointly-developed Australian and New Zealand life insurance accounting standards (LIAS) issued in 1997. The propensity of managers to voluntarily use AIS is predicted to be related to the firm s tax rate, ownership structure, size, expense ratio and solvency. These predictions were tested on a sample of 28 firms during the period 1992-93. Empirical results suggest that firms using AIS tend to be larger, pay higher levels of income tax and are less likely to contravene minimum solvency requirements.

KW - Actuarial income-smoothing techniques

KW - life insurance

M3 - Working paper

T3 - Accounting and Finance Working Paper Series

BT - Determinants of voluntary accounting policy choices by Australian life insurers

PB - The Department of Accounting and Finance

CY - Lancaster University

ER -