| The questions about auditor industry expertise are always popular issues. Although a large number of studies have examined the influence of auditor industry expertise on audit quality, evidence on the association between auditor industry expertise of the external audit firm and tax avoidance is scarce. On the background of listed companies increasingly avoid tax, we consider the fact that many large multinational companies what are suspected of tax evasion. This paper aims from the perspective of the external auditor to further explore the influencing factors of corporate tax avoidance degree. After summarizing relevant literature, auditors may affect the degree of tax avoidance by two sides:from the perspective of auditor,based on risk control,high-quality external audit can constrain corporate avoided tax; from the perspective of tax consulting, directly provide tax services can help companies avoid tax more effectively. Overall, it is also not clear how the auditor affect the degree of corporate tax avoidance.Firstly, this paper have a brief review and analysis of the relevant domestic and foreign scholars in the field. Mainly from the corporate tax avoidance behavior and the relationship between external auditor and corporate tax avoidance level to review relevant literature. Secondly,We define the concepts and propose appropriate measure about tax supervision, auditor industry expertise and corporate tax avoidance level, and analysis the issues about whether industry expertise may constrain or encourage firm’s tax avoidance in theory. Then established a regression model about auditor industry expertise and firm’s tax avoidance to empirical analysis, while introduce a dummy variable about tax supervise efforts to analyze the impact of tax supervision to auditor industry expertise and corporate tax avoidance and get a objective and comprehensive analysis of the factors that affect listed companies’tax avoidance.In the part of empirical research,on the basis of relevant indicators at home and abroad,considering the actual situation in China. At first,the passage use Industry Market Share Method divided the level of auditor industry expertise.By mean and median difference test,preliminary analysis shows that the auditor industry expertise in high group means higher degree tax avoidance.when tax enforcement of authority is higher, tax avoidance is lower. Meanwhile, according to the previous models, we use A-share listed companies from 2009 to 2013 in stock exchange data and STATA.11 software make a empirical test, the multiple regression results further demonstrate that auditor industry expertise improve the degree of corporate tax avoidance, tax supervision can help reduce the extent of tax avoidance, while tax supervision will help alleviate the positive relationship between auditor industry expertise and firm’s tax avoidance.Combining with the empirical results and relevant literature on tax avoidance, we propose the following policy suggestions. On one hand, the regulatory authorities should provide guidance to regulate audit firm offering tax service. Prevent auditors compromise the independence due to economic interests, and use industry expertise to help corporate engage tax planning. On the other hand, regulators should strengthen the laws and regulations of tax consulting industry, and increase non-compliance penalties of the audit firms who provide the malignant tax avoidance, ensure tax consulting market appropriate competition and development orderly. What’s more, tax authority should strengthen supervision and improve the punishment to establish a fair and healthy tax order. |
