Publication Type

Journal Article

Publication Date

11-2016

Abstract

Using an international sample of firms from 31 countries, we study the relation between auditor quality and corporate tax aggressiveness. Employing an indicator variable for tax aggressiveness when the firm's corporate tax avoidance measure is within the top quintile of each country-industry combination, we find strong evidence that auditor quality is negatively associated with the likelihood of tax aggressiveness, even after controlling for other institutional determinants such as home-country tax system characteristics. We also find that the negative relation between auditor quality and the likelihood of tax aggressiveness is more pronounced in countries where investor protection is stronger, auditor litigation risk is higher, the audit environment is better, and capital market pressure is higher.

Keywords

auditor quality, corporate tax aggressiveness, investor protection, litigation risk, audit environment, capital market pressure

Discipline

Accounting | Corporate Finance | International Business

Research Areas

Corporate Governance, Auditing and Risk Management

Publication

Auditing: A Journal of Practice and Theory

Volume

35

Issue

4

First Page

105

Last Page

135

ISSN

0278-0380

Identifier

10.2308/ajpt-51417

Publisher

American Accounting Association

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://doi.org/10.2308/ajpt-51417

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