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The Impact of Large Tax Settlements on Firms' Subsequent Tax and Financial Reporting

In this study, I examine how firms change their tax avoidance and financial reporting following large tax settlements. I find that firms decrease tax avoidance following large settlements and this effect is concentrated among firms under-reserved for the settlement for financial accounting purposes. Additionally, my results suggest firms learn from tax examination resolutions in a way that affects their financial reporting over the tax account. Finally, I find that the effect of large settlements also spills over to firms within the same auditor network. This study provides context to the tax authority's efficacy in deterring tax avoidance and highlights its role in the financial reporting process.

Identiferoai:union.ndltd.org:arizona.edu/oai:arizona.openrepository.com:10150/555888
Date January 2015
CreatorsFinley, Andrew Rhodes
ContributorsDhaliwal, Dan S., Dhaliwal, Dan S., Dhaliwal, Dan S., Vallabhajosyula, Shyam S., Drake, Katharine D.
PublisherThe University of Arizona.
Source SetsUniversity of Arizona
Languageen_US
Detected LanguageEnglish
Typetext, Electronic Dissertation
RightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.

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