Tax-related information regulatory capacity and accounting information quality

Guanzheng Wu and Yang Li

International Review of Financial Analysis, 2025, vol. 99, issue C

Abstract: Accounting information communicates businesses' financial position, operational outcomes, and cash flow. It plays a crucial role in aligning the interests of various stakeholders, is a vital tool for financial and accounting oversight, and contributes to improving corporate and national governance. This study examines a sample of Chinese A-share listed companies from 2011 to 2023 and explores the relationship between tax-related information regulatory capacity, represented by the Golden Tax III System, and enterprise accounting information quality. The findings highlight that introducing the Golden Tax III System can improve enterprise accounting information quality. Furthermore, the positive impacts of introducing the Golden Tax III System on enterprise accounting information quality are attained through improving internal control and external governance. Heterogeneous analysis confirms that firms` ownership and external audit lead to heterogeneous policy effects. Specifically, the impacts have a multiplier effect in non-state-owned enterprises and firms with Big Four auditors. The findings demonstrate how digitized tax collection can enhance information transparency and the importance of accounting information governance, support the government's role in external oversight and corporate governance, and contribute to further tax collection and accounting information research.

Keywords: Tax-related information regulatory; The Golden tax III system; Accounting information quality (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:99:y:2025:i:c:s105752192500016x

DOI: 10.1016/j.irfa.2025.103929

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