2026-04-17T06:16:12Zhttps://recercat.cat/oai/request
oai:recercat.cat:2072/4241802024-10-29T15:36:40Zcom_2072_98col_2072_378197
RECERCAT author Chong, H. Gin author Laitinen, Erkki K. author Myllymäki, Emma-Riikka author Universitat Autònoma de Barcelona. Departament d'Empresa 2014 This study investigates whether incumbent audit firm-provided tax services enhance or impair the likelihood of acknowledging client companies' low financial reporting quality. In particular, we examine the association between tax-related fees and the likelihood of timely restatements, and internal control weakness disclosures among a sample of US companies that all have misstatements in financial information. The empirical findings indicate that companies paying higher tax-related fees are less likely to disclose SOX 404 internal control weakness disclosures, implying that underlying control problems are unacknowledged when incumbent audit firm provided tax-related fees are higher. However, the findings suggest that just providing both audit and tax-related services does not have an impact on audit quality per se, but rather it is the magnitude of the tax-related fees in particular that counts. We also find some evidence suggesting that companies paying higher tax-related fees have higher likelihood of restatement lags, whereas companies paying smaller tax-related fees to their audit firm restate financial statements in a timelier manner. Overall, the findings suggest that audit scrutiny of client companies with low quality financial reporting is weaker when the magnitude of tax-related fees is higher. open access Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, i la comunicació pública de l'obra, sempre que no sigui amb finalitats comercials, i sempre que es reconegui l'autoria de l'obra original. No es permet la creació d'obres derivades. https://creativecommons.org/licenses/by-nc-nd/3.0/ Auditoria Impostos Informació financera Incumbent audit firm-provided tax services and the clients with low financial reporting quality Working paper