Taxation Commons^™

Two Essays On The Tax Consequences Of Auditor Litigation Risk : Evidence From Quasi-Natural Experiments, Felix Owusu

Lingnan Theses and Dissertations (MPhil & PhD)

In the United States, auditors have legal liability to third parties under federal securities law and state common laws, which vary in the degree of liability. Whereas auditors are liable to security traders for fraud under the federal securities law, they are liable for ordinary negligence under common law. Using a sample of company-year observations from 1982 to 2015, I examine the implications of the adoption of common law statutes on audit client tax outcomes. My thesis consists of two essays. The first one examines how the staggered adoption of these common law principles that increased third-party auditor legal liability …

Effects Of Management And Media Disclosures Of Corporate Tax Evasion On Investor Judgments, Ming Wei Gabriel Chua

Lingnan Theses and Dissertations (MPhil & PhD)

This study examines investor reactions to disclosures of corporate tax evasion by company management and the media. We were particularly interested in the issue of whether investors value corporate tax compliance from a moral perspective. We conducted an experiment in which we manipulate management disclosure strategies (no disclosure, symbolic disclosure, substantive disclosure) and the presence/absence of media disclosures in a 3 x 2 between-subjects design. Participants provided judgments of a hypothetical company’s short-term and long-term financial prospects and their willingness to maintain their investment in the company.

Media disclosure of tax evasion had a significant effect on all judgments. In …

The Danger Of Being Neighbors : Community Information And Corporate Tax Avoidance, Xiaowei Wang

Lingnan Theses and Dissertations (MPhil & PhD)

This paper examines the relationship between tax officers’ access to community information and the effectiveness of tax authorities in constraining tax avoidance in China. Numerous studies document that people can obtain valuable information in the community in which their daily activities take place (community information). Focusing on a valuable setting in China in which corporate taxes are collected by tax offices that are located very close to firms (with an average distance of 6.5 km), this study examines whether tax officers’ access to community information at a firm’s location can reduce the firm’s tax avoidance. I broadly define tax avoidance …