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Does common auditor have an impact on corporate tax avoidance? An investigation from the supply chain perspective

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  • Zhiying Hu
  • Haiyan Yang
  • Yuyu Zhang
  • Jenny Jing Wang

Abstract

We find that, at both the audit firm and partner level, having a common auditor in the supply chain has a significant positive association with the supplier company's degree of tax avoidance. Companies report a higher level of tax avoidance when they are audited by an industry‐expert or a tax expert common auditor, when the common audit partner is economically dependent on the supplier company, when the audit client is in a highly competitive industry, and when the company is subject to a high level of information asymmetry. Moreover, we find potential audit quality issues embedded in common audits in the supply chain.

Suggested Citation

  • Zhiying Hu & Haiyan Yang & Yuyu Zhang & Jenny Jing Wang, 2023. "Does common auditor have an impact on corporate tax avoidance? An investigation from the supply chain perspective," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(1), pages 575-629, March.
    • Handle: RePEc:bla:acctfi:v:63:y:2023:i:1:p:575-629
    DOI: 10.1111/acfi.12983
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