Publication Type
Working Paper
Version
publishedVersion
Publication Date
8-2018
Abstract
This study investigates whether network ties via sharing the same individual auditor influences the diffusion of tax avoidance knowledge. We find that firms with greater connection to low-tax firms through audit partners have lower effective tax rates (ETRs), consistent with tax avoidance knowledge being shared among firms through individual auditor network. The influence of audit network ties on tax avoidance at focal firms is stronger when partners’ tenure in low-tax firms is longer, and when partners have social connection with the top executives of focal firms. In addition, audit fees of focal firms with auditor network ties to low-tax firms are significantly higher if their executives are not socially connected to partners, suggesting that audit partners benefit from sharing the tax avoidance knowledge with clients without social ties.
Keywords
Network ties, audit partner, tax avoidance, school ties separated
Discipline
Accounting | Asian Studies
Research Areas
Corporate Reporting and Disclosure
First Page
1
Last Page
57
Publisher
SSRN
Citation
LIM, Chee Yeow; SHEVLIN, Terry; WANG, Kun; and XU, Yanping.
Tax knowledge diffusion through individual auditor network ties: Evidence from China. (2018). 1-57.
Available at: https://ink.library.smu.edu.sg/soa_research/1858
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.2139/ssrn.3229564