Based On Cost Of Financial Report To Analysis The Effect Of Tax Avoidance To Corporate Valuation

With the development of China Accounting Standard and the Law of Tax, Thefirms have got more chance of accounting policy choices; also, the managers got thebigger space for tax avoidance behavior. It is the common phenomenon all of theworld, Many academic literature hold the views that the tax avoidance is an importantcompany decision. Conventional wisdom believes tax avoidance has increasedshareholders value, but Effective Taxpaying Planning Theory insists this result isuncertain, because with the tax revenue increased, there was a lot of non-tax costinevitably. it is an economic consequences of tax evasion, conclude Agency Costs,Transaction Costs, Opportunity Costs, Inter-Organizational Cost, Hidden Costs,Financial Reporting Cost and so on(Gai di,2005).This paper focus on Balancing TaxAvoidance and Cost of Financial Report.Based on previous research, this paper use of the company study data for the firsttime combined the financial reporting cost with tax avoidance impact on corporatevaluation. Firstly, if ignore financial reporting cost，tax avoidance leads to lowercorporate value. Secondly, if considering financial reporting cost, tax avoidance willleads higher corporate value. On the one hand, the result of this paper contributes tounderstand financial reporting cost and the role of tax avoidance behavior. On theother hand, it is helpful for further enrich the tax avoidance literature, has a certainreference value of listed companies in China policy-making.