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Risk education and tax aggressiveness: Evidence from China's auditor certification reform

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  • Su, Zhifang
  • Wang, Haowei
  • Pan, Yinghao

Abstract

This paper examines how auditors' risk education affects corporate tax aggressiveness, leveraging China's 2009 CPA examination reform as a quasi-natural experiment. Firms audited by “new regime” auditors (post-reform) exhibit significantly lower tax aggressiveness than those audited by pre-reform auditors. This effect is more pronounced for firms with weaker governance and greater information asymmetry. We find enhanced risk awareness and improved professional capability are key channels. These findings highlight auditor education's importance in enhancing audit effectiveness and shaping corporate tax behavior, with implications for corporate governance reforms like China's 2024 Company Law amendment regarding audit committees.

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  • Su, Zhifang & Wang, Haowei & Pan, Yinghao, 2025. "Risk education and tax aggressiveness: Evidence from China's auditor certification reform," China Economic Review, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:chieco:v:93:y:2025:i:c:s1043951x25001117
    DOI: 10.1016/j.chieco.2025.102453
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