Spillover effects of clients’ tax enforcement on financial statement auditors: Evidence from a discontinuity design

• Main Authors: CHOW, Travis K., PITTMAN, Jeffrey, WANG, Muzhi, ZHAO, Le
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2019
• Subjects: tax enforcement; audit fees; audit effort; auditor-client matching; Accounting; Taxation
• Online Access: https://ink.library.smu.edu.sg/soa_research/1842; https://ink.library.smu.edu.sg/context/soa_research/article/2869/viewcontent/SSRN_id3487193.pdf
• Institution: Singapore Management University

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 ef...