Does opinion shopping impair auditor independence? Evidence from tax avoidance
- Authors
- Chung, Heesun; Lee, Eugenia Y.
- Issue Date
- Apr-2024
- Publisher
- Elsevier Ltd
- Keywords
- Auditor change; Auditor independence; Big 4 auditors; Opinion shopping; Tax avoidance
- Citation
- Journal of Contemporary Accounting and Economics, v.20, no.1, pp 1 - 21
- Pages
- 21
- Indexed
- SCOPUS
- Journal Title
- Journal of Contemporary Accounting and Economics
- Volume
- 20
- Number
- 1
- Start Page
- 1
- End Page
- 21
- URI
- https://scholarworks.bwise.kr/hanyang/handle/2021.sw.hanyang/194717
- DOI
- 10.1016/j.jcae.2023.100398
- ISSN
- 1815-5669
- Abstract
- In this study, we investigate whether a firm's opportunistic switching of auditors for a favorable audit opinion, known as opinion shopping (OS), affects its tax avoidance activities. Using a sample of Korean firms over the 2006–2018 period, we find that firms that switch auditors for OS purposes engage in more aggressive tax avoidance than other firms. The association between OS-driven auditor switches and tax avoidance is more pronounced for switches to non-Big 4 auditors than to Big 4 auditors. The results are robust to various robustness tests that attempt to control for differences in the characteristics of OS and non-OS firms. Collectively, the findings suggest that auditors hired as a result of OS allow their clients to engage in more aggressive tax avoidance, which is consistent with impaired auditor independence. We contribute to the literature on OS by documenting evidence of the negative consequence of OS on corporate tax compliance. In addition, our findings suggest that firms’ tax and audit behaviors need to be monitored concurrently.
- Files in This Item
-
Go to Link
- Appears in
Collections - 서울 경영대학 > 서울 경영학부 > 1. Journal Articles
![qrcode](https://api.qrserver.com/v1/create-qr-code/?size=55x55&data=https://scholarworks.bwise.kr/hanyang/handle/2021.sw.hanyang/194717)
Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.