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This paper examines the relationship between tax avoidance and accounting comparability. The authors argue that aggressive tax behavior impairs the comparability of financial statements by altering the accounting function, which maps economic events into accounting data.

The empirical analysis is based on a large sample of United States (US) firms. The authors use raw and industry-adjusted effective tax rates (ETRs) to proxy tax avoidance. The authors use the measure of accounting comparability developed by De Franco et al. (2011), which aims to capture the similarity of the accounting function.

The authors find that firms with more aggressive tax avoidance strategies have substantially lower accounting comparability. The evidence also shows that the negative effect of tax avoidance on accounting comparability is driven by firms with aggressive tax planning strategies beyond the industry norm. Furthermore, using an alternative measure of accounting comparability as a function of pre-tax income, the authors continue to find evidence of the negative effect of tax avoidance behavior. Importantly, this provides evidence that the effect of aggressive tax planning is not limited to the reported tax expense, but affects the comparability of the overall financial reporting system.

The authors identify a new potential cost of tax aggressive activities, being the loss of accounting comparability as driven by tax aggressive activities. The results contribute to the literature on the costs of tax avoidance and on the determinants of accounting comparability.

This paper aims to study the impact of tax avoidance on corporate risk. It also examines the moderating impact of tax risk on the relationship between tax avoidance and firm risk.

Based on available information in the DATASTREAM database about a sample of French firms listed in the CAC 40 from 2010 to 2022, the study uses the feasible generalized least squares method to investigate the impact of tax avoidance on firm risk and the moderating impact of tax risk. To check the robustness of our results, the authors changed the measurement of variables to identify potential biases and they significantly mitigated the endogeneity concerns using instrumental variable regression. Additional estimations were performed, first by using book-tax differences (BTD) and its components, i.e. temporary and permanent, and second by retesting hypotheses of years before the outbreak of the corona virus disease 2019 (COVID-19) pandemic.

The results show that tax avoidance negatively affects the firm risk while tax risk has a positive effect on firm risk. More importantly, tax risk moderates the negative impact of tax avoidance on the firm risk. When tax avoidance is associated with a high level of tax risk, it leads to a high firm risk. Accordingly, tax avoidance should be considered in conjunction with tax risk when studying the effect put on the firm risk. Further analyses indicate that tax risk moderates the negative relationship between permanent BTD and firm risk.

The major limitation of this study is that it focuses only on French-listed firms, which make it difficult to generalize the results. Furthermore, the authors did not introduce governance variables into our models. An effective governance system and transparent information can reduce some of the perverse effects of risky tax avoidance by reducing the tax avoidance costs. The obtained results are of great interest to researchers who need to include the tax risk concept in their examination of the tax avoidance impacts.

The results are useful for investors wishing to make sound decisions regarding risky tax avoidance practices. Furthermore, the results may signal the need for French policymakers to make more efforts to reduce risky tax avoidance activities that are harmful to investors. They must enforce the existence and the reporting of a tax risk management strategy by firms.

This study contributes to the growing body of literature on the tax avoidance effects with a special focus on firm risk. This study provides the first French evidence of the role of tax risk in the relationship between tax avoidance and firm risk.

This paper aims to examine the effect of contractual factors and noncontractual factors on tax avoidance (TA).

The sample comprises 400 firm-year observations of 67 companies listed on the HDAX during the period 2008–2017. The generalized least square panel regression is applied.

The study results confirm a significant effect of long-term chief executive officer (CEO) compensation incentives and CEO attributes on TA. Findings exhibit a significant impact of foreign CEO on TA, whereas an insider CEO mitigates TA. The results hold for several robustness tests, with lag effective tax rate as dependent variable and with splitting foreign CEO into European and non-European origin.

First, the sample is limited to 400 firm-year observations and to the German context. For shareholders, the study provides first evidence on relationships between the geographical and internal versus external labor market for CEOs and TA. For researchers, the findings underline the importance of integrating behavioral approaches like place attachment theory and the rooting theory in the theory of TA.

To the best of the authors’ knowledge, this is the first study to examine the impact of both contractual determinants and behavioral determinants on TA in the German context as an emerged economy with a dualistic corporate governance. This study contributes to the existing literature regarding the scientific debates about the impact of CEOs and CEO attributes on TA. It also analyses the balance between the place attachment theory and the rooting theory in the face of the compensation outcomes of agency theory.

This study aims to propose a new conforming tax measure based on the work of Badertscher et al. (2019).

This study divides total tax avoidance/management (TM) into nonconforming and conforming portions through a regression. The residual of the regression is treated as the conforming tax measure. In addition, the new conforming tax measure is validated via three approaches. Then, this study examines the moderating effect of nonconforming earnings management (EM) on the relationship between conforming TM and firm performance.

The empirical results show that the model has stronger explanatory power than the model proposed by Badertscher et al. (2019). Additionally, the validation results show that the mean value of the conforming tax measure is lower in quasi-private corporations (financially constrained companies) than in matched public corporations (nonfinancially constrained companies), and firms under high market capital pressure are less motivated to engage in conforming tax practices. Furthermore, nonconforming EM positively moderates the conforming tax–ROA association, implying that nonconforming EM can reduce financial reporting costs resulting from conforming tax practices.

This study contributes to conforming tax research in the following ways. First, this study proposes a new conforming tax measure by substituting the cash book tax difference (BTD) for the BTD in the model of Badertscher et al. (2019) (“BKRW”). Second, this study demonstrates theoretically why the cash BTD should outperform the BTD in computing the BKRW conforming tax measure and confirm this empirically. Third, this study presents a three-way conceptual schema that divides corporations into two groups along each of three tax-relevant dimensions. The group of firms that use both conforming and nonconforming tax strategies have different characteristics compared to the other group. This study also validates the conforming tax measure across the two-group dichotomies.

This paper aims to examine the influence of the International Financial Reporting Standards (IFRS) adoption on corporate tax avoidance (CTA). In addition, this study aims to explore whether family ownership moderates the impact of IFRS adoption on CTA.

The authors used a sample of 1,856 firms from various countries around the world, covering the period between 2010 and 2022. To estimate the proposed econometric models, the authors applied both fixed and random effects regression methods.

The present findings show that IFRS adoption has a negative impact on CTA, as measured by the effective tax rate and book-tax differences. This negative impact is more pronounced in “common law” countries than in “civil law countries.” Additionally, the authors found that family ownership plays a moderating role by positively affecting the impact of IFRS adoption on CTA.

The findings have practical, regulatory and academic implications for fostering accountability and fairness in taxation. This study suggests that implementing IFRS reduces tax avoidance and emphasizes the need for firms to evaluate the implications of IFRS adoption on their tax-planning strategies. It highlights the importance of aligning financial reporting practices with international standards to enhance transparency and minimize tax avoidance opportunities. The differential impact of IFRS adoption between “common law” and “civil law” countries underscores the role of legal and regulatory frameworks. In addition, family ownership plays a significant role in shaping tax-planning strategies. From an academic perspective, this research provides a foundation for further exploration into the relationship between IFRS adoption and tax avoidance.

The existing literature has predominantly concentrated on examining the effect of IFRS adoption on CTA, and the empirical findings have been inconsistent. This study introduces a novel perspective by considering the moderating influence of family ownership in determining the impact of IFRS adoption on CTA.

The purpose of this paper is to investigate the relationship between tax avoidance and earnings persistence in the light of a developing economy, with the main focus on China.

In the analysis, the author conducts a survey on the tax avoidance situation of Chinese listed companies from 2012 to 2020. Then, a multivariate regression analysis is performed in order to analyse the relationship between corporate tax avoidance and earnings persistence.

The findings of the present study show that tax avoidance has a significant positive effect on earnings persistence. However, when the degree of tax avoidance is high, the “risk effect” of tax avoidance exceeds the “value effect”, and tax avoidance will reduce the persistence of earnings. This conclusion is even more prominent when the company is non-state-owned. Further research shows the increase of institutional investors’ shareholding ratio can improve “value effect” of tax avoidance, lessen “risk effect” of tax avoidance, and positively affect the relationship between tax avoidance and earnings persistence.

This study provides evidence for investors to understand the dual effect of tax avoidance on earnings persistence. The results may have implications for regulatory bodies. They can provide a better understanding of the corporate governance role of institutional investors in curbing opportunistic tax avoidance.

This study enriches the research on tax avoidance effects by analysing the impact of tax avoidance on earnings persistence. This study also compensates for the shortcomings of analysing earnings persistence mainly from the perspective of tax differences in the past, and promotes the study of the corporate governance effects of institutional investors under different levels of tax avoidance.

This study aims to investigate the relationship between corporate tax avoidance and stock price crash risk and the moderating effects of corporate governance.

This study investigates the relationship between corporate tax avoidance and stock price crash risk using the sample consisting of listed firms in Vietnam for the period of 2011–2020 using panel regressions.

The authors find that there is a positive relationship between tax avoidance and stock price crash risk. Foreign ownership weakens the impacts of tax avoidance on stock price crash risk, while managerial ownership strengthens the impacts. Female Chief Executive Officers (CEOs) and female chairpersons weaken this relationship. Board gender diversity and state ownership have insignificant moderating impacts.

These findings could help the stock market build better internal monitoring mechanisms to reduce the impacts of tax avoidance on future stock price crash risk. Investors can recognize the characteristics of corporate governance, especially foreign ownership, managerial ownership, female CEOs and female chairpersons when making investment decisions. The policy makers should consider policies to attract foreign investment and support women entrepreneurship.

This paper contributes to the literature on the impacts of tax avoidance on stock price crash risk in emerging countries. This paper is the first to investigate the influence of corporate governance mechanisms including state ownership, foreign ownership, female CEOs and chairpersons and board gender diversity on this relationship.

Some researchers regard discretionary accrual (DA) as one of the factors that drive corporate managers to conduct tax planning (Scott, 2009; Basri and Buchari, 2017). Based on agency theory and positive accounting theory, corporate managers can transform accounting information and manipulate firm earnings to reduce tax liability. There is a lot of research concerning earnings management and tax planning in the developed economy. These studies include Wang and Chen (2012) and Pettersson and Wu (2015). In the emerging economies, it includes Jamei and Khedri (2016), Kurniasih and Sulardi Suranta (2017), Prastiwi (2017), Almashaqbeh et al. (2018), Bayunanda et al. (2018), Rani et al. (2018) and Kałdoński and Jewartowski (2019). It is important to note that none of the research mentioned above has evaluated the impact of real earnings management (REM) on tax planning in Nigeria. While in the developed economy only Kałdoński and Jewartowski (2019) used REM as an explanatory variable, while the majority of studies used DA. Consequently, no study has used REM to moderate the relationship between financial attributes and tax planning. Despite the widespread notion, as well as positive accounting theory, tax planning theory that financial attributes (profitability, leverage, liquidity and firm growth), REM and DA motivate tax planning, previous investigations have produced mixed results (Dwenger and Steiner, 2009; Wang and Chen, 2012; Chen and Zolotoy, 2014; Aghouei and Moradi, 2015; Pettersson and Wu, 2015; Ribeiro, 2015; Chen et al., 2016; Jamei and Khedri, 2016; Ogbeide, 2017; Yuniawati et al., 2017; Chen and Lin, 2017; Firmansyah and Febriyanto, 2018; Prastiwi, 2018; Rani et al., 2018; Kibiya and Aminu, 2019; Kałdoński and Jewartowski, 2019 and Siyanbonla, 2021). This study aims to use REM as a moderator to examine the relationship between financial attributes and tax planning whether it will strengthen or weaken the relationship.

The study examines the impact of financial attributes on the corporate tax planning of listed manufacturing firms in Nigeria. It also tests for the moderating effect of REM on the relationship between financial attributes and tax planning. Data for the study was sourced from the annual reports of sampled manufacturing firms. The study used the panel data methodology for analysis. The study used fixed effect estimation to interpret the parsimonious model and random effect was used to interpret the moderated model. The study documented that financial leverage has a positive significant influence on the tax planning of the sampled manufacturing firms. While firm growth has a negative significant impact on the tax planning of listed manufacturing firms in Nigeria. REM has a positive significant impact on tax planning. Also, REM moderate significantly the relationship between financial attributes on one hand and tax planning on the other. The study recommends that firms should go for more debt to take advantage of the tax shield of interest on the debt. Also, firm management should use non-current debt to finance non-current assets and use current debt to finance current assets to avoid the risk of taking over or liquidation. The study also recommends that firm management should engage in intercompany and intracompany transactions by selling their goods to affiliates in countries with low prices and low tax rates. A firm should also overproduce goods to have high production costs and high closing inventory since real earning management significantly reduces tax liabilities by deferring income into a later year.

The study documented that financial leverage has a positive and significant influence on the tax planning of the sampled manufacturing firms. While firm growth has a negative but significant impact on the tax planning of listed manufacturing firms in Nigeria. REM has a positive and significant impact on tax planning. Also, REM moderate significantly the relationship between financial attributes on one hand and tax planning on the other.

There is a lot of research concerning earnings management and tax planning in the developed economy. These studies include Wang and Chen (2012) and Pettersson and Wu (2015). In the emerging economies, it includes Jamei and Khedri (2016), Kurniasih and Sulardi Suranta (2017), Prastiwi (2017), Almashaqbeh et al. (2018), Bayunanda et al. (2018), Rani et al. (2018) and Kałdoński and Jewartowski (2019). It is important to note that none of the research mentioned above has evaluated the impact of REM on tax planning in Nigeria. While in the developed economy only Kałdoński and Jewartowski (2019) used REM as an explanatory variable, while the majority of studies used DA. Consequently, no study has used REM to moderate the relationship between financial attributes and tax planning.

This study aims to investigate the relation between corporate social responsibility (CSR) and disclosure transparency by examining over 12,000 disclosures of financial statements extending over 20 years. The purpose is to understand how CSR ratings relate to the level of disaggregation in financial statement line items. The study considers additional factors, such as firm size and governance, that can accentuate or moderate this relation.

This study applies regression analysis, including interactions, to test the magnitude of the relation between CSR ratings and disclosure transparency. CSR is measured as a composite score that ranks firms on their reputation over numerous indicators compiled by Morgan Stanley Capital International. Disclosure transparency is measured as the level of disaggregation in financial statement line items.

The study reveals evidence consistent with the notion that firms which are more CSR conscious are also more transparent with financial statements. Evidence shows that the level of transparency is more sensitive to changes in CSR for firms less CSR conscious. Firm size is found to moderate this relation, whereas enhanced governance accentuates it.

There is limited research on the relation between CSR ratings and disclosure transparency. To the best of the authors’ knowledge, this is the first empirical evidence on the relation between CSR ratings and the disaggregation of financial statement line items. Results from this study help us understand the drivers of disclosure transparency, which can aid regulators, investors and other stakeholders in knowing how such drivers impact managerial decisions on the disaggregation of financial statements. Accountants play a central role in producing transparent and disaggregated accounting disclosures, and their role is pivotal in effectively integrating CSR into accounting and reporting models.

This study examines the effect of local government debt (LGD) on corporate earnings management using 25,624 firm-year observations from 2007 to 2019.

Pooled ordinary least squares (OLS) regression is used to examine the impact of LGD on earnings management. A difference-in-differences (DID) method is also used to alleviate potential endogeneity.

Results show that LGD motivates firms to increase earnings management, especially income-decreasing earnings management. Findings are robust to DID method and robustness tests. Heterogeneity analyses show that the positive effect of LGD on earnings management is pronounced in firms with political dependence and moderated by external governance mechanisms. Further discussions indicate that tax enforcement is an underlying channel for LGD to affect earnings management. Firms engage in downward real earnings management by increasing their abnormal discretionary expenditures and higher LGD leads to a greater book-tax difference in those firms that manipulate income-decreasing earnings management.

This study contributes towards examining the political costs hypothesis, the microeconomic effects of LGD and the determinants of earnings management.