Title: Does external auditor influence tax management? An examination of the effect on effective tax rates using a specialist or non-specialist auditor classification

Authors: Ines Hbaieb Hakim; Mohamed Ali Omri

Addresses: Research Unit Finance and Business Strategy (FIESTA), Faculté des Sciences Economiques et de Gestion de Tunis, University of Tunis El Manar, Campus Universitaire El Manar, B.P 248, El Manar II, 2092, Tunis, Tunisia ' Research Unit Finance and Business Strategy (FIESTA), Faculté des Sciences Economiques et de Gestion de Tunis, University of Tunis El Manar, Campus Universitaire El Manar, B.P 248, El Manar II, 2092, Tunis, Tunisia

Abstract: This study addresses whether an external auditor affects tax management as measured by Effective Tax Rates (ETR). We adopt a panel data methodology over the period 2001-2010. Consistent with our hypothesis, we find that hiring an auditor's specialisation results in substantial savings of corporate tax, compared with the hiring a non-specialist auditor. Compared to non-specialist audit firms, the result suggests that specialist audit firms transferred an additional tax expertise to their clients and reduces their ETR. This finding could be of assistance to Tunisian companies, since they can rely on a higher assurance tax economy after hiring an auditors' specialisation.

Keywords: tax management; effective tax rates; auditor specialisation; non-auditor specialisation; Tunisia; external auditors; corporate taxation; tax expertise.

DOI: 10.1504/IJTPM.2013.056839

International Journal of Technology, Policy and Management, 2013 Vol.13 No.4, pp.409 - 421

Received: 19 Nov 2012
Accepted: 10 Mar 2013
Published online: 30 Sep 2014 *

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