The problem of compatibility between the financial accounting system and taxation

Abstract

The aim of this research is to demonstrate the necessity of independence between accounting and taxation as each has its own goals, theoretical framework, methods of measurement, and perceptions that may sometimes agree or disagree in many aspects. Therefore, it is necessary to address the differences out of accounting in order to allow institutions to apply what is stated in the financial accounting system on one hand, and calculate the tax liability on profits on the other hand. We relied on a descriptive-analytic method to answer the following main question: Is it necessary to have consistency between the applicable tax laws and the financial accounting system?