Tax certified individual auditors and effective tax rates

Frey, Lisa

doi:10.1007/s40685-017-0057-8

Cited by 14 publications

(17 citation statements)

References 77 publications

(136 reference statements)

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“…We also found that the longer the auditor-client working relationship is, the more auditors can help clients to reduce tax expenditures. In fact, the outcomes of our second hypothesis are similar to Jeong and Bae (2013), Serafat and Barzegar (2015), Khajavi and Kiamehr (2015), Bae (2017), and Frey (2018). It seems that since most Iranian firms had financial stress due to pressures from economic sanctions between 2012 and 2017, they preferred to work with auditors for a long time so that auditors can provide appropriate mechanisms to reduce tax expenses because auditors have a better understanding of the client's working environment over time.…”

Section: Resultssupporting

confidence: 85%

The effect of auditor characteristics on tax avoidance of Iranian companies

Salehi

Tarighi

Shahri

2020

JABES

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Purpose The purpose of this paper is to investigate the relationship between auditor characteristics and the level of tax avoidance in an emerging market. Design/methodology/approach In this regard, the effect of various factors such as auditor tenure, auditor industry specialization, audit reports and audit fees on tax avoidance was examined. The study sample includes listed companies in the Tehran Stock Exchange. The time period of study is six years from 2011 to 2016. Also in this study, firm size, leverage, firm age and auditor size were controlled. Findings The results of this research were determined in four hypotheses. First and second hypotheses that explore the relationship between auditor tenure and auditor industry specialization with tax avoidance were not confirmed. But the results showed a significant relationship between the type of audit opinions and audit fees with tax avoidance. Originality/value The current study investigates the auditor characteristics on tax avoidance in a developing nation of Iran and the results may helpful the developing countries.

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Section: Resultssupporting

confidence: 85%

The effect of auditor characteristics on tax avoidance of Iranian companies

Salehi

Tarighi

Shahri

2020

JABES

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“…This argument is the result of research by Salehi (2011), Habib (2012). However, some other studies such as Fengju et al (2013), Frey (2018) show a different result indicating that debt to total assets ratio (DAR) does not influence income smoothing. Habib (2012) states that the occurrence of income smoothing practices is also influenced by conflicts of interest between internal parties (management) and external parties (shareholders, creditors, and government).…”

Section: Introductionmentioning

confidence: 84%

Can effective tax rates mediate the effect of profitability and debts on income smoothing?

Savitri

2019

Problems and Perspectives in Management

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The management of the company must be capable of providing better financial information for the users of the financial report. The users of the financial report notice the performance of the management from the financial report. The financial report provides information related to financial positions, performance, as well as the changes in financial positions that are beneficial for decision-making. Income smoothing is generally conducted by the company to see the company’s capability and show the investors or investor candidates that the company is in stable condition in generating profits for the increase of share value and giving dividends, so that the investors are attracted to invest in that company. Income smoothing has been a debatable topic, especially among practitioners and academicians. This study analyzes both the direct and indirect effects of profitability and corporate debt on income smoothing. It also examines whether tax rates mediates the effects of profitability and debt on income smoothing. The sample consists of 12 property and real estate companies on the Indonesia Stock Exchange in 2013–2017. The sample was selected using purposive sampling technique. Data were analyzed using Partial Least Squares (PLS) analysis tool with the WarpPls application. The results show that profitability and debt, as well as effective tax rates, affect income smoothing. The effective tax rates can mediate the relationship between profitability and debt and income smoothing.

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“…The latter result, although theoretically convincing due to independence regulations on audit services, is somewhat surprising given the large literature on auditors trespassing their limited scope of function (Aobdia, 2015;Cai et al, 2016;Dhaliwal et al, 2016;McGuire, Omer, and Wang, 2012). Calibrating from the audit-firm level to the individual audit engagement partner, Frey (2018) suggests that the engagement of a German tax certified auditor, who signals high competency in taxes, is associated with higher effective tax rates at client firms. In contrast, Lim et al (2018), find that Chinese firms with stronger connections to low-tax firms through individual audit partners show lower effective tax rates.…”

Section: Channels For Tax Knowledge Diffusionmentioning

confidence: 98%

“…By examining a potential determinant of crosssectional variation in tax planning practices among firms, we follow the calls for contributions to the understanding of this matter (Cen et al, 2018;Dyreng and Maydew, 2017;Wilson, 2009). Recent research has turned to cross-firm connections, analyzing board ties (Brown, 2011;Brown and Drake, 2014), banks (Gallemore, Gipper, and Maydew, 2018), human capital turnover (Barrios and Gallemore, 2018), auditors (Frey, 2018;Lim et al, 2018) and the supply chain (Cen et al, 2017(Cen et al, , 2018. We extend this literature by analyzing the role of strategic alliances in tax knowledge diffusion.…”

Section: Introductionmentioning

confidence: 98%

Tax Knowledge Diffusion via Strategic Alliances

Mueller

Weinrich

2020

SSRN Journal

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This study examines strategic alliances as channels for tax knowledge diffusion between firms. Despite solid insights on within-firm determinants of tax planning, little is known about tax knowledge diffusion via cross-firm connections. Since theory suggests that the role of strategic alliances in tax knowledge diffusion is ambiguous, we test our notion empirically. To tease out potential tax knowledge diffusion, we analyze changes in the tax planning behavior of high-tax firms in strategic alliances with low-tax firms in comparison to high-tax firms in strategic alliances with other high-tax firms. We apply a multivariate regression model, a difference-indifferences approach and use basic textual analysis to identify the main business purpose of a strategic alliance. We find a substantial increase in the tax planning behavior of high-tax firms in strategic alliances with low-tax firms relative to high-tax firms in high-tax strategic alliances. Additionally, our results suggests that high-tax firms are able to adjust their tax planning behavior within two years of network initiation when cooperating with low-tax firms. Because we are also able to provide a series of robustness checks, we interpret the identified responses to be consistent with existing tax knowledge diffusion via strategic alliances.

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Tax certified individual auditors and effective tax rates

Cited by 14 publications

References 77 publications

The effect of auditor characteristics on tax avoidance of Iranian companies

The effect of auditor characteristics on tax avoidance of Iranian companies

Can effective tax rates mediate the effect of profitability and debts on income smoothing?

Tax Knowledge Diffusion via Strategic Alliances

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