Did the public company oversight board's restrictions on auditor-provided tax services reduce companies' tax avoidance?
by Mahmoud Ahmed
Afro-Asian J. of Finance and Accounting (AAJFA), Vol. 13, No. 1, 2023

Abstract: In 2005, the Public Company Accounting Oversight Board (PCAOB) implemented restrictions on auditor-provided tax services (APTS), which resulted in a major decrease in the provision of these services in 2005 and 2006. The central research question in this study is whether these restrictions have affected tax avoidance after firms reduced their APTS. Using a difference-in-difference design, this paper investigates and finds that reducing APTS leads to a significant decrease in tax avoidance. These results are consistent with the notion that the PCAOB's restrictions, intended chiefly to enhance auditor independence, also led to this significant decrease in tax avoidance.

Online publication date: Tue, 31-Jan-2023

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