Abstract:

The discrepancy between accounting income and tax income, due to several factors, including the dependence on the accrual basis for preparing corporate financial statements. While the cash basis is adopted in determining the taxable income, and the extent to which this discrepancy affects the quality of the financial statements. Therefore, the importance of the research lies in knowing the effect of this discrepancy on the amount of tax for the research sample company. The research problem concluded with the inconsistency between the accounting methods used when preparing the financial statements and the tax laws, which affects the quality of the financial statements. Thus it affects the amount of the tax, to prove the research problem, the research relied on the hypothesis that the discrepancy between accounting income and tax income affects the quality of the financial statements.The research aims to identify the accounting income and tax income, and the effect of the difference between the two incomes on the quality of the company's financial statements, to prove the research hypothesis, the study and analysis of the company's financial statements for the research sample for the year 2017 was relied on. The researchers reached a set of conclusions and recommendations. The most important of them is that the surplus according to the assignments statement (accounting income) appears in an amount that differs from the new surplus after adding the rejected expenses (tax income).Therefore, researchers recommend the necessity of creating a legal ground that contributes to reducing the discrepancy between the accounting and tax income, by making amendments to the applicable tax laws and instructions.

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