01575nas a2200133   4500008004100000245008400041210006900125260000900194490000700203520108600210653001501296100001701311856011301328       2012                        eng d00aEmpirical Evidence on the Impact of External Monitoring on Book-Tax Differences0 aEmpirical Evidence on the Impact of External Monitoring on BookT  c20120 v283 aThis study investigates whether institutional ownership levels are associated with levels of and time-series variability in book-tax differences (BTDs). Firm and year fixed-effects regression results suggest that institutional ownership is negatively associated with total, permanent, and temporary BTDs. This effect is driven primarily by permanent BTDs in the pre-SOX era but is consistently present for both permanent and temporary BTDs post-SOX. Further, this negative association is present regardless of firms’ classification as “tax planners” and/or “earnings managers.” Finally, the results provide some evidence that stronger monitoring by the board and audit committee (i.e., a smaller and more independent board and a larger audit committee) is associated with lower permanent BTDs but is not consistently related with total or temporary BTDs. Overall, these findings are consistent with higher levels of institutional ownership equating to more effective monitoring of management, resulting in lower BTDs (both in terms of levels and time-series variability).10aAccounting1 aMoore, Jared  u/biblio/empirical-evidence-impact-external-monitoring-book-tax-differences-0