The Association Between Changes In Auditor Provided Tax Services And Long Term Corporate Tax Avoidance PDF Download
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| Author | : Brian Hogan |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2012 |
| Genre | : |
| ISBN | : |
Download The Association Between Changes in Auditor Provided Tax Services and Long-Term Corporate Tax Avoidance Book in PDF, ePub and Kindle
This study examines the long-term impact on taxes paid by firms in the time period following the passage of The Sarbanes-Oxley Act of 2002. Legislators, concerned about auditor independence impairment, eliminated the provision of certain non-audit services by auditing firms and required audit committee pre-approval for tax services. As a result, firms decreasingly engaged their audit firms for tax services, instead possibly turning to other accounting firms or internal tax planning, even though information efficiencies may exist by combining the audit-tax function (i.e. knowledge spillover (Gleason and Mills 2011)). Utilizing a sample of 2,240 unique firms covering 2003-2009, we find an economically and statistically significant long-term negative relationship between firm reductions in auditor-provided tax services (APTS) and taxes paid. Further, a portion of this benefit is lost for some firms when returning to their auditor for tax services after a short break. In summary, firms who engage their audit firms for tax services continue to obtain benefits. Firms that reduce or eliminate their APTS, even if retaining other accounting firms for tax engagements, on average pay more taxes over the long-term.
| Author | : Henry Aaron |
| Publisher | : Rowman & Littlefield |
| Total Pages | : 420 |
| Release | : 2004-05-20 |
| Genre | : Political Science |
| ISBN | : 9780815796565 |
Download The Crisis in Tax Administration Book in PDF, ePub and Kindle
People pay taxes for two reasons. On the positive side, most people recognize, even if grudgingly, that payment of tax is a duty of citizenship. On the negative side, they know that the law requires payment, that evasion is a crime, and that willful failure to pay taxes is punishable by fines or imprisonment. The practical questions for tax administration are how to strengthen each of these motives to comply with the law. How much should be spent on enforcement and how should enforcement be organized to promote these objectives and achieve the best results per dollar spent? Over the last few years, the U.S. Congress has restricted spending on tax administration, forcing the Internal Revenue Service to curtail enforcement activities, at the same time, that the number of individual filers has increased, tax rules have become more complex, and more business have become multinational operations. But if too many cases of tax evasion go undetected and unpunished, those who may have grudgingly paid their taxes may soon find it easier to join the scofflaws. These events in combination have created a genuine crisis in tax administration. The chapters in this volume evaluate the capacity of authorities to enforce the tax laws in a modern, global economy and examine the implications of failing to do so. Specific aspects of tax law, including tax shelters, issues relating to small businesses, tax software, role of tax preparers, and the objectives of tax simplification are examined in detail. The volume also builds a conceptual basis for future scholarship, with regard not only to tax administration, but also to such fundamental questions as whether taxpayers respond mostly to economic incentives or are influenced by their experiences with the filing process and what is the proper framework for evaluating the allocation of resources within the IRS.
| Author | : Kellie M. Carr |
| Publisher | : |
| Total Pages | : 145 |
| Release | : 2017 |
| Genre | : Auditing |
| ISBN | : |
Download Corporate Tax Aggressiveness, Auditor Provided Tax Services, and Audit Quality Book in PDF, ePub and Kindle
Using tax accrual quality as a proxy for audit quality, I investigate whether companies that significantly decreased APTS surrounding the effective date of the Public Company Accounting Oversight Board's 2006 Rules on Ethics, Independence, and Tax Services experienced an improvement in audit quality after the change. Given the specific target of the PCAOB 2006 restrictions is companies aggressively avoiding taxes with the assistance of APTS, I also investigate whether companies associated with tax aggressive services are also more likely to experience an improvement in audit quality following the reductions in APTS. Results suggest an increase in audit quality due to a reduction in economic bonding following APTS restrictions. Consistent with the economic bonding theory, companies that significantly reduced APTS experienced a larger improvement in audit quality after the change compared to companies that did not significantly reduce APTS. For tax aggressive companies, those that reduced APTS did experience a significant increase in audit quality after the change compared to tax aggressive companies that did not significantly reduce APTS. Moreover, companies considered important tax clients by their audit firms that significantly reduced APTS did experience a marginally greater increase in audit quality after the change compared to other important tax clients that did not significantly reduce APTS. Overall, my results indicate that the PCOAB 2006 restrictions were effective in decreasing APTS and economic bonding, thereby leading to improved audit quality, especially among companies associated with tax aggressive services. Accordingly, concerns for loss of knowledge spillover seem to be minimal. There are few studies that investigate the effectiveness of the PCAOB 2006 restrictions on audit quality. Therefore, my study fills this void by using a tax specific measure of audit quality, tax accrual quality, to specifically examine the target of the restrictions-- audit clients that are associated with aggressive tax services. My study confirms and expands APTS, economic bonding, audit quality, tax accrual quality, and tax aggressive research, and also provides insight into and support for current policy debates concerning APTS and tax aggressive services.
| Author | : Alan J. Auerbach |
| Publisher | : Cambridge University Press |
| Total Pages | : 401 |
| Release | : 2007-04-16 |
| Genre | : Business & Economics |
| ISBN | : 1139464515 |
Download Taxing Corporate Income in the 21st Century Book in PDF, ePub and Kindle
This book was first published in 2007. Most countries levy taxes on corporations, but the impact - and therefore the wisdom - of such taxes is highly controversial among economists. Does the burden of these taxes fall on wealthy shareowners, or is it passed along to those who work for, or buy the products of, corporations? Can a country with high corporate taxes remain competitive in the global economy? This book features research by leading economists and accountants that sheds light on these and related questions, including how taxes affect corporate dividend policy, stock market value, avoidance, and evasion. The studies promise to inform both future tax policy and regulatory policy, especially in light of the Sarbanes-Oxley Act and other actions by the Securities and Exchange Commission that are having profound effects on the market for tax planning and auditing in the wake of the well-publicized accounting scandals in Enron and WorldCom.
| Author | : Gopal V. Krishnan |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2011 |
| Genre | : |
| ISBN | : |
Download Is There an Association Between Earnings Management and Auditor-Provided Tax Services? Book in PDF, ePub and Kindle
The issue of whether auditor-provided nonaudit services enhance or exacerbate financial reporting quality has been intensely debated among the regulators, auditors, investors, academic researchers, and the media. In 2006, the SEC approved the rules proposed by the PCAOB limiting the tax services that incumbent auditors can offer to their clients. We contribute to this debate by examining whether auditor-provided tax services mitigate earnings management. We find a negative and significant relation between earnings management (loss avoidance) and tax fee paid to the incumbent auditor. Our results are consistent with knowledge spillover, i.e., when the same audit firm provides both audit and tax services insight learned from providing tax services can contribute to audit quality.
| Author | : Edward L. Maydew |
| Publisher | : |
| Total Pages | : 39 |
| Release | : 2005 |
| Genre | : Corporations |
| ISBN | : |
Download The Changing Role of Auditors in Corporate Tax Planning Book in PDF, ePub and Kindle
"This paper examines changes in the role that auditors play in corporate tax planning following recentevents, including the well-known accounting scandals, passage of the Sarbanes-Oxley Act, andregulatory actions by the SEC and PCAOB. On the whole, these events have increased thesensitivity to and scrutiny of auditor independence. We examine the effects of these events on themarket for tax planning, in particular the longstanding link between audit and tax services. Whilethe effects are recent, they are already being seen in the data. Specifically, there has already beena dramatic shift in the market for tax planning away from obtaining tax planning services from one'sauditor. We estimate that the ratio of tax fees to audit fees paid to the auditors of firms in the S&P500 decline from approximately one in 2001 to one-fourth in 2004. At the same time, we find noevidence of a general decline in spending for tax services. In sum, the evidence indicates adecoupling of the longstanding link between audit and tax services, such that firms are shifting theirpurchase of tax services away from their auditor and towards other providers"--National Bureau of Economic Research web site.
| Author | : Thomas C. Omer |
| Publisher | : |
| Total Pages | : |
| Release | : 2007 |
| Genre | : |
| ISBN | : |
Download Auditor-Provided Tax Services Book in PDF, ePub and Kindle
This study investigates auditor-provided tax services from 2000 to 2002, during which fees paid to auditors for nonaudit services (NAS) were disclosed, but separate disclosure of tax service fees was voluntary. We examine changes in the market for tax NAS in 2002, as Congress debated possible prohibition of these services. Using the Heckman MLE procedure to control for selection bias in tax fee disclosure, we find that a strong pre-2002 positive association between tax fees and higher than expected audit fees weakened significantly in 2002, suggesting that some companies paying high audit fees reduced or terminated auditor-provided tax services in 2002. Our findings also suggest that auditor-provided tax services were reduced among new or short-tenure clients. Controlling for tax complexity, we also find some evidence that early quot;returnsquot; (i.e., tax rate reductions) to companies from auditor-provided tax services were reduced in 2002. Finally, results of our selection model imply that the decision to voluntarily disclose fees paid to the auditor for tax services is positively associated with tax complexity and auditor tenure, and negatively associated with the proportion of NAS fees to total fees. Overall, our findings imply significant change in auditor-provided tax services prior to 2003, when separate disclosure of auditor-provided tax service fees was mandated.
| Author | : Kaushal Kumar Agrawal |
| Publisher | : Atlantic Publishers & Dist |
| Total Pages | : 384 |
| Release | : 2007-12 |
| Genre | : |
| ISBN | : 9788126909179 |
Download Corporate Tax Planning Book in PDF, ePub and Kindle
Primarily Written For The Students Of Commerce, The Present Book Is A Complete Study Of Tax Planning, Tax Procedures And Management, Wealth Tax, Value Added Tax And Service Tax. Upto The Fifth Edition The Book Was Entitled Direct Tax Planning And Management. Now It Is Entitled Corporate Tax Planning And Has 46 Chapters Divided Into Eleven Self-Contained Units Basics; Tax Planning Of Salary; Tax Holiday; Profits And Gains From Business Or Profession And Capital Gain; Corporate Tax In India; Financial Decisions; Setting Up Of New Business; Managerial Decisions; Tax Planning Others; Corporate Restructuring; And Non-Residents Taxation. The Book Comprehensively Covers The Latest Syllabus Prescribed By Most Of The Indian Universities. In Addition To The Detailed Explanation Of Each Of Its Topics, The Book Is Rich In Illustrations And Practice Exercises That Facilitate Easy Understanding And Quick Revision Of The Subject.The Book Will Undoubtedly Prove Useful To The Students Of B.Com., Cs (Final), Icwa (Final), M.Com., Mba, Mfc And Cfa. Besides Students, The General Readers Keen To Obtain Basic And In-Depth Knowledge Of Tax Planning Will Find This Book Highly Informative.
| Author | : Kevin A. Diehl |
| Publisher | : |
| Total Pages | : 18 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download Why Higher Levels of Auditor-Provided Tax Services Lower the Likelihood of Restatements Book in PDF, ePub and Kindle
Kinney et al. (2004) ask in the Journal of Accounting Research: Why do higher levels of auditor-provided tax services lower the chances of restatements? In resolving this question, this paper investigates the relationship between auditor-provided tax services and restatements with proxies to represent the motivations of the audit committee and chief financial officers. Because Sarbanes-Oxley requires audit committee preapproval for these tax services, the necessity for including these variables is obvious. Logistic regression of seven specifications show that higher levels of auditor-provided tax services, financial experts, and long-term compensation are inversely and statistically significantly related to all restatements and (more strongly) to tax-influential restatements. The cash effective tax rate directly and statistically significantly relates to those specifications, showing that just increasing spending on these tax services cannot signal high-quality financial reporting in the absence of effective utilization.
| Author | : Ahsan Habib |
| Publisher | : |
| Total Pages | : |
| Release | : 2016 |
| Genre | : |
| ISBN | : |
Download Auditor-Provided Tax Services and Stock Price Crash Risk Book in PDF, ePub and Kindle
This paper examines whether auditor-provided tax services affect stock price crash risk: an important consideration for stock investors. Provision of tax services by incumbent auditors could accentuate or attenuate crash risk depending on whether such services give rise to knowledge spillover or impair auditor independence. The study investigates two channels through which tax services might affect crash risk: earnings management in tax expenses, and tax avoidance. Also examined, is whether the association between tax services and crash risk is moderated by the particular business strategy that organizations pursue. A two-stage model is used to control for the potential endogeneity inherent in the selection of auditors for tax services. Empirical findings reveal that auditor-provided tax services attenuate crash risk by constraining both earnings management in tax expenses and tax avoidance. Further evidence shows that auditor-provided tax services reduce crash risk for firms following innovator business strategies. Taken together, empirical findings reported in this study support knowledge spillover benefits, i.e. insights gained from tax services can enhance audit effectiveness.
