Financial statement comparability and corporate tax avoidance

Li Qingyuan and Wang Lumeng

China Journal of Accounting Studies, 2018, vol. 6, issue 4, 448-473

Abstract: Based on the analysis of the agency problem in tax avoidance, this paper uses the data of non-financial listed companies from 2005 to 2015 to study the impact of the comparability of accounting information on corporate tax avoidance. The results show that the higher the comparability of accounting information, the lower the degree of corporate tax avoidance. The deterrence effect of comparability on tax avoidance is more significant for a company with a more opaque information environment and with fiercer product market competition. Additional tests show that the deterrence effect of comparability on tax avoidance is more pronounced in regions with low tax enforcement, which shows that financial statement comparability can substitute tax enforcement. This article proves the governance effect of financial accounting comparability on corporate tax avoidance. It expands and deepens the research of the governance effect of accounting information comparability from the perspective of tax avoidance.

Date: 2018
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DOI: 10.1080/21697213.2019.1612187

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