Luwei Zhao
ABSTRACT
The discussion on the regulatory inquiry mechanism has become increasingly in-depth in the theoretical and practical research fields under the background that China's regulatory authorities are committed to deepening the reform of the regulatory system in recent years. We attempt to have a deeper understanding of the connotation of information conveyed by inquiry letters through exploring the relationship between inquiry letters and corporate tax avoidance strategy. This article proposes hypotheses about the relationship of Chinese companies based on China's national conditions and market conditions, takes the inquiry letter issued by the stock exchange as the research object, and collects the data of China's listed companies from 2014 to 2020 to carry out empirical tests. The results show that there is a negative relationship between inquiry letters and tax avoidance in Chinese company especially in high-tech enterprises.
- ATWOOD T J, DRAKE M S, MYERS J N, 2012. Home country tax system characteristics and corporate tax avoidance: international evidence[J]. Accounting Review, 87(6) : 1831-1860.Google Scholar
Cross Ref
- Balakrishnan, K., Blouin, J. L., & Guay, W. R. (2018). Tax aggressiveness and corporate transparency. The Accounting Review, 94(1), 45-69.Google ScholarCross Ref
- Bozanic Z, Dietrich J R, Johnson B A. 2017. SEC comment letters and firm disclosure. Journal of Accounting and Public Policy, 36(5) : 337-357.Google ScholarCross Ref
- BRADSHAW M, LIAO G, MA M. 2019. Agency costs and tax planning when the government is a major shareholder[J]. Journal of Accounting and Economics, 67( 2/3) 255-277.Google Scholar
- Cassell C, Dreher L, Myers L. 2013. Reviewing the SEC's review process: 10-K comment letters and the cost of reme-diation. The Accounting Review, 88(6): 1875-1908.Google ScholarCross Ref
- CHEN S, CHEN X, CHENG Q, 2010. Are family firms more tax aggressive than non-family firms[J]. Journal of Financial Economics, 95(1) : 41-61.Google ScholarCross Ref
- Chen Yunsen, Deng Yilu, Li Zhe. 2018a. Does non-penalty regulation have information content? –Evidence based on inquiry letters. Journal of Financial Research(4) : 155-171 (In Chinese)Google Scholar
- Chen Yunsen, Deng Yilu, Li Zhe. 2018b. Can non-administrative penalty supervision improve audit quality? –Evidence based on financial reporting inquiry letters. Journal of Audit Research(5) : 82-88 (In Chinese)Google Scholar
- Chen Yunsen, Deng Yilu, Li Zhe. 2019. Effectiveness of front-line regulation of stock exchanges–Evidence from Financial reporting inquiry letters. Journal of Management World(3) : 169-185, 208 (In Chinese)Google Scholar
- DESAI M A, DHARMAPALA D. 2006. Corporate tax avoidance and high-powered incentives[J]. Journal of Financial Economics, 79(1) : 145-179.Google ScholarCross Ref
- Hasan, I., Wachtel, P. and Zhou, M., Institutional Development, Financial Deepening and Economic Growth: Evidence From China. Journal of Banking & Finance,Vol.33, No.1, 2009 , pp.157-170.Google Scholar
- Heese, J., M. Khan, K. Ramanna. 2017. Is the SEC Captured? Evidence from Comment-Letter Reviews. Journal of Accounting and Economics, 64 (1) : 98-122Google ScholarCross Ref
- Kim, J.; Li, Y. and Zhang, L. “Corporate Tax Avoidance and Stock Price Crash Risk: Firm-Level Analysis. ”Journal of Financial Economics, 2011, 100(3), pp. 639-662.Google Scholar
- KOESTER A, SHEVLIN T, WANGERIN D. 2017. The role of managerial ability in corporate tax avoidance [J]. Management Science, 63(10) : 3147-3529.Google ScholarDigital Library
- Kubick T R, Lynch D, Mayberry M, 2016. The effects of regulatory scrutiny on tax avoidance: an examination of SEC comment letters. The Accounting Review, 91(6) : 1751-1780Google ScholarCross Ref
- Lanis, R., Richardson, G., 2012. Corporate social responsibility and tax aggressiveness: an empirical analysis. J. Account. Public Policy 31(1), 86-108Google ScholarCross Ref
- McGuire, S.T., Wang, D., Wilson, R.J., 2014. Dual class ownership and tax avoidance. Account. Rev. 89(4), 1487-1516.Google ScholarCross Ref
- Wang, Q. 2016. Determinants of Segment Disclosure Deficiencies and the Effect of the SEC Comment Letter Process. Journal of Accounting and Public Policy, 35 (2) : 109-133Google ScholarCross Ref
- Ye Kangtao, Liu Xing. Corporate Tax avoidance and internal agency costs [J]. Financial Research Journal, 2014, 000(009):158-176.Google Scholar
- Zhang Junsheng, Tang Xiaojian, Li Guangzhong. 2018. Can precautionary regulation reduce the risk of price crashes? – Research based on exchange annual Report inquiry letters. Journal of Management Science, 10 : 112-116 (In Chinese)Google Scholar
- Zhang Xinmin, Ge Chao, Yang Daoguang, LIU Nian. 2019. Tax avoidance, internal control and enterprise risk. Journal of Chinese Soft Science, 09:0108-11 (In Chinese)Google Scholar
Index Terms
- Research on inquiry letters and tax avoidance based on fixed effects model
Recommendations
Factors Cause of Tax Avoidance in Companies Listed on Indonesian Stock Exchange
ICIEB '21: Proceedings of the 2021 2nd International Conference on Internet and E-BusinessThis study aims to determine the factors that cause tax avoidance in companies listed on the Indonesian stock exchange (BEI). The following factors that affect tax avoidance include profitability, liquidity, leverage and company size. The population of ...
The Role of Managerial Ability in Corporate Tax Avoidance
Most prior studies model tax avoidance as a function of firm-level characteristics and do not consider how individual executive characteristics affect tax avoidance. This paper investigates whether executives with superior ability to efficiently manage ...
Analyzing The Effects of Business Strategy, Tax Avoidance, and Dividend Policy on Company Value: An Empirical Study
ICCMB '22: Proceedings of the 2022 5th International Conference on Computers in Management and BusinessA company's value is an important aspect to be maintained in the company. There will be more possible investors for the company if its value is high. The goal of this research is to look at the effect of business strategy, tax avoidance, and dividend ...
Comments