The potential for tax influence on unconsolidated financial reporting in Malta : the similarity to the UK

Abstract

This study examines the influence of taxation on the unconsolidated financial reporting of Maltese companies as compared to the UK, and any change in such influence with the onset of the national financial reporting standard for SMEs General Accounting Principles for Smaller Entities (GAPSE) for financial periods ending on or after 1 January 2009. It results that different taxation and financial reporting requirements are followed for their different purposes and this has remained so with the recent onset of GAPSE. Consequently, it has resulted that Malta's degree of disconnection is close to that of the UK. It can therefore be concluded that taxation has not influenced accounting in Malta. This conclusion could be of interest to other academics and policy-makers, in predicting and explaining the accounting requirements of Malta and other countries.