In Table 4, Panel D, our proxy of tax avoidance is associated with expertise using DTAX the joint audit and tax market share in the control variables” matched OVERALLEXPERT, “All sample (Column IV, = 0.029*). The positive coefficient on OVERALLEXPERT suggests higher levels of tax avoidance. The APTS variables in this panel are OVERALLEXPERT also generally insignificant, with the exception of positive coefficients on in Column III APTS (APTS = 0.039**) and Column IV (APTS = 0.049**) Finally, Table 4, Panel D shows that our proxy for tax aggressiveness is not UTBSC significantly associated with expertise in any of our matched samples. The control variables are also generally insignificant, although we find a statistically negative coefficients on in APTS Column V (APTS = -0.003*). This coefficient suggests lower tax aggressiveness in firms that use their auditor for tax services. As a whole, the results in Table 4 show a lack of consistent evidence that tax avoidance and tax aggressiveness are associated with market-share measures of tax expertise. Specifically, we find no association between and tax avoidance in any of our matched samples. TAXEXPERT In addition, little evidence exists to support an association between tax avoidance or tax aggressiveness and the market-share measure of overall expertise There are OVERALLEXPERT. two important issues concerning these results. First, the weak results using the measure and the statistically insignificant results using the OVERALLEXPERT TAXEXPERT measure are difficult to interpret, given that is expected to have a more direct TAXEXPERT impact on tax avoidance. Second, the difference in results between the book-tax rate proxy ETR and the cash-tax rate proxy using the measure casts doubt on whether CETR OVERALLEXPERT there is a true pattern of tax avoidance in the data.
In Table 4, Panel D, our DTAX proxy of tax avoidance is associated with expertise using the joint audit and tax market share OVERALLEXPERT, in the “All control variables” matched sample (Column IV, OVERALLEXPERT = 0.029*). The positive coefficient on OVERALLEXPERT suggests higher levels of tax avoidance. The APTS variables in this panel are also generally insignificant, with the exception of positive coefficients on APTS in Column III (APTS = 0.039**) and Column IV (APTS = 0.049**) Finally, Table 4, Panel D shows that our proxy for tax aggressiveness UTBSC is not significantly associated with expertise in any of our matched samples. The control variables are also generally insignificant, although we find a statistically negative coefficients on APTS in Column V (APTS = -0.003*). This coefficient suggests lower tax aggressiveness in firms that use their auditor for tax services. As a whole, the results in Table 4 show a lack of consistent evidence that tax avoidance and tax aggressiveness are associated with market-share measures of tax expertise. Specifically, we find no association between TAXEXPERT and tax avoidance in any of our matched samples. In addition, little evidence exists to support an association between tax avoidance or tax aggressiveness and the market-share measure of overall expertise OVERALLEXPERT. There are two important issues concerning these results. First, the weak results using the OVERALLEXPERT measure and the statistically insignificant results using the TAXEXPERT measure are difficult to interpret, given that TAXEXPERT is expected to have a more direct impact on tax avoidance. Second, the difference in results between the book-tax rate ETR proxy and the cash-tax rate CETR proxy using the OVERALLEXPERT measure casts doubt on whether there is a true pattern of tax avoidance in the data.
Meza-BMS-Sept-Revised-auditors-industry-specialization-a-reliable-indicator-of-tax-avoidance.docx