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Full-Text Articles in Business
Spillover Effects Of Clients’ Tax Enforcement On Financial Statement Auditors: Evidence From A Discontinuity Design, Travis K. Chow, Jeffrey Pittman, Muzhi Wang, Le Zhao
Spillover Effects Of Clients’ Tax Enforcement On Financial Statement Auditors: Evidence From A Discontinuity Design, Travis K. Chow, Jeffrey Pittman, Muzhi Wang, Le Zhao
Research Collection School Of Accountancy
We examine the impact of clients’ tax enforcement on financial statement auditors. In a regression discontinuity design, we exploit the firm-registration-date-based application of a new rule that assigns firms to two different tax enforcement regimes. Our analysis implies that auditors exert less effort–evident in lower audit fees and shorter audit report lags–when their clients are monitored by the more stringent tax authority. In results supporting that audit quality improves in this situation despite the fall in auditor effort, we report that clients subject to tougher tax enforcement exhibit a lower incidence of accounting restatements and tax-related restatements. Additionally, we find …
The Minimum Wage And Corporate Tax Planning, Xiaoxi Li, Chee Yeow Lim, Yanping Xu
The Minimum Wage And Corporate Tax Planning, Xiaoxi Li, Chee Yeow Lim, Yanping Xu
Research Collection School Of Accountancy
This paper investigates the impact of the minimum wage (MW) on corporate tax planning. By exploiting heterogeneity in the MW level across cities and over time in China, we find that increases in the MW are associated with greater tax planning by firms. Our results are robust to the consideration of a sample of contiguous firms in two adjacent cities subject to different MWs, a change specification and a difference-in-differences research design that exploits the enactment of the Labor Contract Law in 2008 as an exogenous shock to the MW. In cross-sectional analyses, we find that the positive impact of …
Corporate Tax Aggressiveness And Insider Trading, Sung Gon Chung, Beng Wee Goh, Kiat Bee Jimmy Lee, Terry Shevlin
Corporate Tax Aggressiveness And Insider Trading, Sung Gon Chung, Beng Wee Goh, Kiat Bee Jimmy Lee, Terry Shevlin
Research Collection School Of Accountancy
We examine the association between corporate tax aggressiveness and theprofitability of insider trading under the assumption that insider tradingprofits reflect managerial opportunism. We document that insider purchaseprofitability, but not sales profitability, is significantly higher on average inmore tax aggressive firms. We also find that the positive association between taxaggressiveness and insider purchase profitability is attenuated for firms withmore effective monitoring and is accentuated for firms with a more opaqueinformation environment.In addition, we provide empirical evidence that tax aggressiveness issignificantly associated with greater insider sales volume in the fiscal yearprior to a stock price crash. Finally, we find that the association …
How Tax Rates Can Achieve Greater Savings For Married Couples, Teng Aun Khoo, Kai Guan Clement Tan
How Tax Rates Can Achieve Greater Savings For Married Couples, Teng Aun Khoo, Kai Guan Clement Tan
Research Collection School Of Accountancy
In the second of our two-part guide, Khoo Teng Aun and Clement Tan Kai Guan look at how to use tax rates to achieve greater savings for married couples.
The Economics Of Managerial Taxes And Corporate Risk-Taking, Chris Armstrong, Stephen Glaeser, Sterling Huang, Daniel Taylor
The Economics Of Managerial Taxes And Corporate Risk-Taking, Chris Armstrong, Stephen Glaeser, Sterling Huang, Daniel Taylor
Research Collection School Of Accountancy
We examine the relation between managers’ personal income tax rates and their corporate investment decisions. Using plausibly exogenous variation in federal and state tax rates, we find a positive relation between managers’ personal tax rates and their corporate risk-taking. Moreover—and consistent with our theoretical predictions—we find that this relation is stronger among firms with investment opportunities that have a relatively high rate of return per unit of risk, and stronger among CEOs who have a relatively low marginal disutility of risk. Importantly, our results are unique to senior managers’ tax rates––we do not find similar relations for middle-income tax rates. …