Book Tax Differences (BTDS) and Financial Distress of Listed Consumer Goods Firms in Nigeria

The decrease in the level of book tax conformity that increases the level of corporate tax avoidance and the incessant corporate failures due to masqurading of financial statement, necessitated the research work on Book Tax differences (BTDs). The focus of this study is to examine the relationship between the four components of book-tax differences (BTDs) and financial distress surrogated by Altman's Z- scores of listed consumer goods firms in Nigeria. The study adopted the ex post facto research design. The population comprised of listed consumer goods firms on the Nigerian Stock Exchange. The sample was purposively determined as twenty one consumer goods firms. The study relied on secondary sources of data. The data were analysed using both descriptive and inferential statistical techniques. The hypotheses were analysed using the panel EGLS regression technique. The results showed a significant positive relationship between temporary BTD and total BTD with Altman's Z-score. Based on this the study recommends among others things that external auditors should place additional emphasis on book tax information because of its ability to signal firms facing financial constraint.