Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338484 
Year of Publication: 
2022
Citation: 
[Journal:] China Journal of Accounting Studies (CJAS) [ISSN:] 2169-7221 [Volume:] 10 [Issue:] 4 [Year:] 2022 [Pages:] 481-502
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
Previous studies of tax enforcement neglect the effect of tax-penalty discretionary benchmarks on corporate financial reporting quality. In China, province-level variations in implementing tax-penalty discretionary benchmarks provide a quasi-natural experiment to explore how tax enforcement standardisation affects corporate financial reporting quality. We show that when tax-penalty benchmarks are implemented in every province, there is a more pronounced positive relationship between tax enforcement standardisation and corporate financial reporting quality compared with the ex-ante period. Moreover, this positive relationship is primarily driven by firms with higher degrees of tax avoidance and collusion with tax collectors. Consequently, the implementation of tax-penalty benchmarks means that the standardisation of tax enforcement can improve corporate financial reporting quality. In turn, tax enforcement standardisation can optimise the external governance environment for listed firms and improve financial information disclosure in capital markets.
Subjects: 
Tax-penalty discretionary benchmarks
tax enforcement
standardisation
financial reporting quality
quasi-natural experiment
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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