Pub Date : 2025-12-13DOI: 10.1016/j.intaccaudtax.2025.100742
Wenbin Cao , Rong Ding , Chih-Chieh Hsieh
In this study, we examine the association between double taxation treaties (DTTs) and United States multinational enterprises’ (MNEs) disclosure of offshore activities. Using a dataset consisting of 890,746 firm-subsidiary-year observations between 1999 and 2017, we find that the establishment of DTTs reduces a firm’s voluntary disclosure of their offshore activity. Additional tests suggest that tax avoidance incentives with DTTs is one factor causing the reduction in disclosure of a firm’s offshore activity. We find that the reduction of the disclosure of offshore activity is concentrated in firms with operations in high statutory tax rate countries, lower income mobility, and a higher likelihood of using a tax shelter. Our findings have implications for policymakers and tax authorities around the world.
{"title":"Double taxation treaties and disclosure of offshore activities: evidence of tax avoidance incentive","authors":"Wenbin Cao , Rong Ding , Chih-Chieh Hsieh","doi":"10.1016/j.intaccaudtax.2025.100742","DOIUrl":"10.1016/j.intaccaudtax.2025.100742","url":null,"abstract":"<div><div>In this study, we examine the association between double taxation treaties (DTTs) and United States multinational enterprises’ (MNEs) disclosure of offshore activities. Using a dataset consisting of 890,746 firm-subsidiary-year observations between 1999 and 2017, we find that the establishment of DTTs reduces a firm’s voluntary disclosure of their offshore activity. Additional tests suggest that tax avoidance incentives with DTTs is one factor causing the reduction in disclosure of a firm’s offshore activity. We find that the reduction of the disclosure of offshore activity is concentrated in firms with operations in high statutory tax rate countries, lower income mobility, and a higher likelihood of using a tax shelter. Our findings have implications for policymakers and tax authorities around the world.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":"60 ","pages":"Article 100742"},"PeriodicalIF":3.7,"publicationDate":"2025-12-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145796605","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-04DOI: 10.1016/j.intaccaudtax.2025.100740
Zhangfan Cao , Steven Xianglong Chen , Yu-Lin Hsu , Edward Lee
This paper examines the influence of business strategy on firms’ discretionary disclosure of non-GAAP earnings. We find that innovation-oriented firms (i.e., prospectors) have a higher propensity of disclosing non-GAAP earnings, whereas efficiency-driven firms (i.e., defenders) are less likely to issue non-GAAP earnings. Subsequent tests reveal that the prospector managers are more likely to disclose non-GAAP earnings to ‘convert’ a GAAP loss into a non-GAAP profit and ‘meet and beat’ analyst forecasts, consistent with managers’ opportunistic use of non-GAAP earnings as a strategic device to engage in impression management. To corroborate the managerial opportunism behind non-GAAP earnings disclosure, we test the quality of non-GAAP exclusions and find that the managerial exclusions by prospectors are of lower quality. Cross-sectional analyses indicate that the positive relationship between business strategy and non-GAAP earnings disclosure is more pronounced amongst firms with higher levels of prior accruals management, firms facing higher agency costs, and firms with higher managerial ability. Our results are robust to a battery of robustness tests such as triple-differences analysis based on exogenous shocks, propensity-score-matching technique, and instrumental variable approach. Overall, our study documents the role of business strategy as an intrinsic and non-financial firm characteristic in shaping the voluntary disclosure of financial information.
{"title":"Strategy typology and non-GAAP earnings disclosure","authors":"Zhangfan Cao , Steven Xianglong Chen , Yu-Lin Hsu , Edward Lee","doi":"10.1016/j.intaccaudtax.2025.100740","DOIUrl":"10.1016/j.intaccaudtax.2025.100740","url":null,"abstract":"<div><div>This paper examines the influence of business strategy on firms’ discretionary disclosure of non-GAAP earnings. We find that innovation-oriented firms (i.e., prospectors) have a higher propensity of disclosing non-GAAP earnings, whereas efficiency-driven firms (i.e., defenders) are less likely to issue non-GAAP earnings. Subsequent tests reveal that the prospector managers are more likely to disclose non-GAAP earnings to ‘convert’ a GAAP loss into a non-GAAP profit and ‘meet and beat’ analyst forecasts, consistent with managers’ opportunistic use of non-GAAP earnings as a strategic device to engage in impression management. To corroborate the managerial opportunism behind non-GAAP earnings disclosure, we test the quality of non-GAAP exclusions and find that the managerial exclusions by prospectors are of lower quality. Cross-sectional analyses indicate that the positive relationship between business strategy and non-GAAP earnings disclosure is more pronounced amongst firms with higher levels of prior accruals management, firms facing higher agency costs, and firms with higher managerial ability. Our results are robust to a battery of robustness tests such as triple-differences analysis based on exogenous shocks, propensity-score-matching technique, and instrumental variable approach. Overall, our study documents the role of business strategy as an intrinsic and non-financial firm characteristic in shaping the voluntary disclosure of financial information.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":"60 ","pages":"Article 100740"},"PeriodicalIF":3.7,"publicationDate":"2025-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145747269","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-02DOI: 10.1016/j.intaccaudtax.2025.100741
Nikolaos I. Karampinis
This study examines the presence of fee stickiness in response to declines in audit effort. Potential drivers of reduced effort include changes in client characteristics, auditor learning, and lower audit quality with extended tenure. The asymmetric fee response to reductions in audit effort is conceptually grounded in the credence nature of audit services and the role of transaction costs. Using a proprietary dataset of audit hours from a large sample of public and private firms in Greece, I find that audit fees decrease less in response to reductions in audit hours than they increase with equivalent effort increases – an evidence of audit fee stickiness. This stickiness is most pronounced among the largest international accounting firm auditors with medium tenure. Audit fee stickiness is also positively associated with greater information asymmetry between the auditor and the client, larger changes in audit effort, and higher accounting quality. Collectively, the findings suggest that audit fee stickiness primarily reflects accumulated auditor learning rather than deteriorating audit quality, and that it is more attributable to the credence attributes of audit services than to transaction costs.
{"title":"Audit effort and audit fee stickiness","authors":"Nikolaos I. Karampinis","doi":"10.1016/j.intaccaudtax.2025.100741","DOIUrl":"10.1016/j.intaccaudtax.2025.100741","url":null,"abstract":"<div><div>This study examines the presence of fee stickiness in response to declines in audit effort. Potential drivers of reduced effort include changes in client characteristics, auditor learning, and lower audit quality with extended tenure. The asymmetric fee response to reductions in audit effort is conceptually grounded in the credence nature of audit services and the role of transaction costs. Using a proprietary dataset of audit hours from a large sample of public and private firms in Greece, I find that audit fees decrease less in response to reductions in audit hours than they increase with equivalent effort increases – an evidence of audit fee stickiness. This stickiness is most pronounced among the largest international accounting firm auditors with medium tenure. Audit fee stickiness is also positively associated with greater information asymmetry between the auditor and the client, larger changes in audit effort, and higher accounting quality. Collectively, the findings suggest that audit fee stickiness primarily reflects accumulated auditor learning rather than deteriorating audit quality, and that it is more attributable to the credence attributes of audit services than to transaction costs.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":"60 ","pages":"Article 100741"},"PeriodicalIF":3.7,"publicationDate":"2025-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145693762","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-29DOI: 10.1016/j.intaccaudtax.2025.100739
Erekle Pirveli , Jochen Zimmermann
This study augments the literature by systematically reviewing market- and firm-level effects of International Financial Reporting Standards (IFRS) adoption over the past two decades. Drawing on 181 articles from the Scopus database, our meta-analysis applies multivariate regression and Structural Equation Modeling (SEM) to simultaneously examine the relationships between accounting quality, accounting comparability, market effects, and the findings of IFRS adoption. The results show predominantly positive effects on market outcomes, such as reduced forecast errors, increased investment flows, and improved market liquidity, whereas findings on accounting quality and comparability remain mixed. Crucially, SEM reveals that these market improvements are not primarily driven by fundamental accounting enhancements in either accounting quality or comparability. Instead, market effects exert a strong direct influence on IFRS findings, whereas accounting dimensions exhibit weaker direct and significantly negative indirect effects. These insights challenge the common assumption that market-level improvements stem from enhanced accounting fundamentals. By offering a structured and quantitative synthesis, this study strengthens methodological rigor in IFRS literature and informs future research on standard-setting outcomes.
{"title":"Twenty years of IFRS ‘success’? A systematic review of Scopus literature","authors":"Erekle Pirveli , Jochen Zimmermann","doi":"10.1016/j.intaccaudtax.2025.100739","DOIUrl":"10.1016/j.intaccaudtax.2025.100739","url":null,"abstract":"<div><div>This study augments the literature by systematically reviewing market- and firm-level effects of International Financial Reporting Standards (IFRS) adoption over the past two decades. Drawing on 181 articles from the Scopus database, our <em>meta</em>-analysis applies multivariate regression and Structural Equation Modeling (SEM) to simultaneously examine the relationships between accounting quality, accounting comparability, market effects, and the findings of IFRS adoption. The results show predominantly positive effects on market outcomes, such as reduced forecast errors, increased investment flows, and improved market liquidity, whereas findings on accounting quality and comparability remain mixed. Crucially, SEM reveals that these market improvements are not primarily driven by fundamental accounting enhancements in either accounting quality or comparability. Instead, market effects exert a strong direct influence on IFRS findings, whereas accounting dimensions exhibit weaker direct and significantly negative indirect effects. These insights challenge the common assumption that market-level improvements stem from enhanced accounting fundamentals. By offering a structured and quantitative synthesis, this study strengthens methodological rigor in IFRS literature and informs future research on standard-setting outcomes.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":"60 ","pages":"Article 100739"},"PeriodicalIF":3.7,"publicationDate":"2025-11-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145693763","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-28DOI: 10.1016/j.intaccaudtax.2025.100738
Jamie Y. Tong , James Thewissen , Serene Xu Ni , Shimin Chen
Cost stickiness is a crucial concern in accounting research. Prior research sheds light on how cost asymmetry is shaped by managerial decisions in adjusting resources either for value maximization or self-interest. In this paper, we investigate the relationship between the degree of cost stickiness and intentional resource adjustments made by Chief Executive Officers (CEOs) approaching retirement age. Based on a sample of United States firms between 1993 and 2019, our findings indicate that CEOs approaching retirement tend to reduce their selling, general, and administrative (SG&A) expenses in response to declining sales. This effect is more pronounced when motivating and monitoring mechanisms are weaker. We also explore the influence of cultural differences on corporate decision making and find that the reduction in SG&A costs is more substantial among CEOs coming from countries with a stronger future oriented language. We conduct additional analyses to address endogeneity concerns and to check the robustness of our main findings.
{"title":"CEO retirement and cost stickiness","authors":"Jamie Y. Tong , James Thewissen , Serene Xu Ni , Shimin Chen","doi":"10.1016/j.intaccaudtax.2025.100738","DOIUrl":"10.1016/j.intaccaudtax.2025.100738","url":null,"abstract":"<div><div>Cost stickiness is a crucial concern in accounting research. Prior research sheds light on how cost asymmetry is shaped by managerial decisions in adjusting resources either for value maximization or self-interest. In this paper, we investigate the relationship between the degree of cost stickiness and intentional resource adjustments made by Chief Executive Officers (CEOs) approaching retirement age. Based on a sample of United States firms between 1993 and 2019, our findings indicate that CEOs approaching retirement tend to reduce their selling, general, and administrative (SG&A) expenses in response to declining sales. This effect is more pronounced when motivating and monitoring mechanisms are weaker. We also explore the influence of cultural differences on corporate decision making and find that the reduction in SG&A costs is more substantial among CEOs coming from countries with a stronger future oriented language. We conduct additional analyses to address endogeneity concerns and to check the robustness of our main findings.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":"60 ","pages":"Article 100738"},"PeriodicalIF":3.7,"publicationDate":"2025-11-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145796606","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-27DOI: 10.1016/j.intaccaudtax.2025.100736
Dong Chen , Yingwen Guo , Qiliang Liu , Phyllis L.L. Mo
This study examines whether academic directors on audit committees affect corporate tax avoidance. Using a sample of Chinese listed firms, we find that academic directors on audit committees reduce tax avoidance. Quantile regression analyses show that academic directors reduce tax avoidance for over-sheltered firms, but there is no evidence to support their impact on tax avoidance for under-sheltered firms. We also find that academic directors limit the use of income shifting and transfer pricing as tax avoidance strategies. Moreover, the negative relationship between academic directors and tax avoidance does not vary with the severity of agency conflicts measured by the separation of voting and cash flow rights. These results imply that academic directors are effective monitors in curbing aggressive tax avoidance, but they do not play an advisory role in tax planning, probably due to a lack of tax-related industry experience. Our results are robust to endogeneity concerns. This study contributes to the literature on board diversity and sheds light on the influence of corporate governance on tax avoidance.
{"title":"Do academic directors on audit committees affect corporate tax avoidance?","authors":"Dong Chen , Yingwen Guo , Qiliang Liu , Phyllis L.L. Mo","doi":"10.1016/j.intaccaudtax.2025.100736","DOIUrl":"10.1016/j.intaccaudtax.2025.100736","url":null,"abstract":"<div><div>This study examines whether academic directors on audit committees affect corporate tax avoidance. Using a sample of Chinese listed firms, we find that academic directors on audit committees reduce tax avoidance. Quantile regression analyses show that academic directors reduce tax avoidance for over-sheltered firms, but there is no evidence to support their impact on tax avoidance for under-sheltered firms. We also find that academic directors limit the use of income shifting and transfer pricing as tax avoidance strategies. Moreover, the negative relationship between academic directors and tax avoidance does not vary with the severity of agency conflicts measured by the separation of voting and cash flow rights. These results imply that academic directors are effective monitors in curbing aggressive tax avoidance, but they do not play an advisory role in tax planning, probably due to a lack of tax-related industry experience. Our results are robust to endogeneity concerns. This study contributes to the literature on board diversity and sheds light on the influence of corporate governance on tax avoidance.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":"60 ","pages":"Article 100736"},"PeriodicalIF":3.7,"publicationDate":"2025-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145693764","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-25DOI: 10.1016/j.intaccaudtax.2025.100737
Xiaoqi Chen , Haozhe Song , Albert Tsang , Yingying Xin
In this study, we investigate the impact of board gender diversity (BGD) reforms on corporate dividend policies. Leveraging BGD reforms enacted in 45 jurisdictions around the world from 1994 to 2019 and using a staggered difference-in-differences empirical approach, we observe that firms tend to decrease their dividend payouts following these reforms. Cross-sectional analyses further reveal that the adverse effect of BGD reforms on dividends is more pronounced for firms characterized by higher agency costs, a higher level of information asymmetry, and greater reliance on external finance. The effect is also amplified when BGD policies lead to a larger increase in the number of female directors on board. Overall, these findings suggest that BGD reforms and dividend payout policies probably play a substitutive role in safeguarding the interests of external investors.
{"title":"Board gender diversity and corporate dividend policy: International evidence","authors":"Xiaoqi Chen , Haozhe Song , Albert Tsang , Yingying Xin","doi":"10.1016/j.intaccaudtax.2025.100737","DOIUrl":"10.1016/j.intaccaudtax.2025.100737","url":null,"abstract":"<div><div>In this study, we investigate the impact of board gender diversity (BGD) reforms on corporate dividend policies. Leveraging BGD reforms enacted in 45 jurisdictions around the world from 1994 to 2019 and using a staggered difference-in-differences empirical approach, we observe that firms tend to decrease their dividend payouts following these reforms. Cross-sectional analyses further reveal that the adverse effect of BGD reforms on dividends is more pronounced for firms characterized by higher agency costs, a higher level of information asymmetry, and greater reliance on external finance. The effect is also amplified when BGD policies lead to a larger increase in the number of female directors on board. Overall, these findings suggest that BGD reforms and dividend payout policies probably play a substitutive role in safeguarding the interests of external investors.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":"60 ","pages":"Article 100737"},"PeriodicalIF":3.7,"publicationDate":"2025-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145624609","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-11-13DOI: 10.1016/j.intaccaudtax.2025.100734
Martin R.W. Hiebl , Dai Huu Nguyen
In this paper, we study the effect that incentive compensation has on meeting the stretch goals of an organization in the context of an emerging country. Our results differ from the conceptual insights into stretch goals presented by Sitkin et al. (2011), especially the suggested mechanisms and conditions that influence the facilitative and disruptive effects of stretch goals on organizational performance. By drawing on in-depth case studies of two Vietnamese organizations, we explore the potential and limitations of incentive compensation in realizing stretch goals and their facilitative and disruptive effects in an emerging-country setting. We find that apart from recent performance and the level of slack resources, incentive compensation plays an important role in influencing the facilitative and disruptive effects of using stretch goals. Our paper is among the first to explore the potential and limitations of stretch goals in an emerging-country setting, where Western management control concepts frequently face resistance from employees and other stakeholders. In addition, it is among the first to explore the role of incentive compensation in determining the effects of stretch goals on organizational performance.
本文研究了在新兴国家背景下，激励性薪酬对企业实现扩张目标的影响。我们的研究结果与Sitkin et al.（2011）提出的关于弹性目标的概念性见解不同，特别是提出了影响弹性目标对组织绩效的促进和破坏作用的机制和条件。通过对两个越南组织的深入案例研究，我们探讨了激励性薪酬在实现延伸目标方面的潜力和局限性，以及它们在新兴国家背景下的促进和破坏作用。我们发现，除了近期绩效和闲置资源水平外，激励薪酬在影响使用弹性目标的促进和破坏效应方面也起着重要作用。我们的论文是第一批在新兴国家背景下探索弹性目标的潜力和局限性的论文之一，在新兴国家，西方的管理控制概念经常面临员工和其他利益相关者的抵制。此外，它是第一个探索激励薪酬在确定弹性目标对组织绩效的影响中的作用。
{"title":"Meeting stretch goals via incentive compensation: Evidence from two emerging-country organizations","authors":"Martin R.W. Hiebl , Dai Huu Nguyen","doi":"10.1016/j.intaccaudtax.2025.100734","DOIUrl":"10.1016/j.intaccaudtax.2025.100734","url":null,"abstract":"<div><div>In this paper, we study the effect that incentive compensation has on meeting the stretch goals of an organization in the context of an emerging country. Our results differ from the conceptual insights into stretch goals presented by <span><span>Sitkin et al. (2011)</span></span>, especially the suggested mechanisms and conditions that influence the facilitative and disruptive effects of stretch goals on organizational performance. By drawing on in-depth case studies of two Vietnamese organizations, we explore the potential and limitations of incentive compensation in realizing stretch goals and their facilitative and disruptive effects in an emerging-country setting. We find that apart from recent performance and the level of slack resources, incentive compensation plays an important role in influencing the facilitative and disruptive effects of using stretch goals. Our paper is among the first to explore the potential and limitations of stretch goals in an emerging-country setting, where Western management control concepts frequently face resistance from employees and other stakeholders. In addition, it is among the first to explore the role of incentive compensation in determining the effects of stretch goals on organizational performance.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":"60 ","pages":"Article 100734"},"PeriodicalIF":3.7,"publicationDate":"2025-11-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145532567","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-17DOI: 10.1016/j.intaccaudtax.2025.100719
Gianluca Ginesti , Domenico Campa
This paper investigates the relationship between corporate social responsibility (CSR) board committees and tax disclosure. Using a unique hand-collected dataset from CSR board committees of European-listed companies, we provide several important contributions. First, we document that the presence of a CSR board committee is positively associated with tax disclosure. Second, we find that the membership of Chief Executive Officers (CEOs) on a CSR board committee is negatively associated with tax disclosure, while CSR board committees chaired by a female director are associated with increased levels of tax disclosure. We also show that firms with CSR board committees whose members have higher educational backgrounds are associated with enhanced tax disclosure levels. Additional analyses indicate that companies with better tax disclosure transparency are less likely to engage in aggressive tax avoidance strategies. All these results support the importance of a CSR board committee, as well as its members’ characteristics, for corporate transparency and more effective market discipline.
{"title":"Corporate social responsibility board committee and tax disclosure","authors":"Gianluca Ginesti , Domenico Campa","doi":"10.1016/j.intaccaudtax.2025.100719","DOIUrl":"10.1016/j.intaccaudtax.2025.100719","url":null,"abstract":"<div><div>This paper investigates the relationship between corporate social responsibility (CSR) board committees and tax disclosure. Using a unique hand-collected dataset from CSR board committees of European-listed companies, we provide several important contributions. First, we document that the presence of a CSR board committee is positively associated with tax disclosure. Second, we find that the membership of Chief Executive Officers (CEOs) on a CSR board committee is negatively associated with tax disclosure, while CSR board committees chaired by a female director are associated with increased levels of tax disclosure. We also show that firms with CSR board committees whose members have higher educational backgrounds are associated with enhanced tax disclosure levels. Additional analyses indicate that companies with better tax disclosure transparency are less likely to engage in aggressive tax avoidance strategies. All these results support the importance of a CSR board committee, as well as its members’ characteristics, for corporate transparency and more effective market discipline.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":"59 ","pages":"Article 100719"},"PeriodicalIF":3.7,"publicationDate":"2025-10-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145360987","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-15DOI: 10.1016/j.intaccaudtax.2025.100720
He Xiao , Jianqun Xi
This study examines the association between informal board hierarchy and corporate tax avoidance among Chinese listed firms. The empirical findings indicate that a clear informal board hierarchy can strengthen tax aggressiveness among listed Chinese firms. We also explore the economic mechanism underlying this finding. The path analysis shows the motivation of the impact, confirming that a clear board informal hierarchy promotes firm value for shareholders through corporate tax avoidance. Further tests show that the channels of the impact are as follows: (1) a clear informal board hierarchy could lead to greater board meeting frequency for advisory directors and more dissenting votes and tax-related opinions being raised by independent advisory directors in these meetings, implying more board advisory roles, which ultimately increases avoidance and (2) a clear informal board hierarchy implies stronger political connections and more centralized social ties in the Chinese context, prompting corporate tax aggressiveness. Finally, a set of cross-sectional analysis suggests that this finding is evident only for firms without sufficient auditors’ industry expertise, non-state-owned enterprises, and firms with a stronger Confucian culture, instead of their counterparts.
{"title":"The effect of invisible power: board informal hierarchy and corporate tax avoidance","authors":"He Xiao , Jianqun Xi","doi":"10.1016/j.intaccaudtax.2025.100720","DOIUrl":"10.1016/j.intaccaudtax.2025.100720","url":null,"abstract":"<div><div>This study examines the association between informal board hierarchy and corporate tax avoidance among Chinese listed firms. The empirical findings indicate that a clear informal board hierarchy can strengthen tax aggressiveness among listed Chinese firms. We also explore the economic mechanism underlying this finding. The path analysis shows the motivation of the impact, confirming that a clear board informal hierarchy promotes firm value for shareholders through corporate tax avoidance. Further tests show that the channels of the impact are as follows: (1) a clear informal board hierarchy could lead to greater board meeting frequency for advisory directors and more dissenting votes and tax-related opinions being raised by independent advisory directors in these meetings, implying more board advisory roles, which ultimately increases avoidance and (2) a clear informal board hierarchy implies stronger political connections and more centralized social ties in the Chinese context, prompting corporate tax aggressiveness. Finally, a set of cross-sectional analysis suggests that this finding is evident only for firms without sufficient auditors’ industry expertise, non-state-owned enterprises, and firms with a stronger Confucian culture, instead of their counterparts.</div></div>","PeriodicalId":53221,"journal":{"name":"Journal of International Accounting Auditing and Taxation","volume":"59 ","pages":"Article 100720"},"PeriodicalIF":3.7,"publicationDate":"2025-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145324202","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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