Whether firms facing greater financing constraints turn to tax strategies that generate lower cash effective tax rates (ETRs) to mitigate the adverse effect of these financing constraints remains an empirical question of interest. We use the Pension Protection Act of 2006 (PPA 2006) as an...

This study examines whether corporate tax planning and financial reporting of income taxes vary systematically with CEO tenure. Using a CEO-firm fixed effects design, we find that the GAAP effective tax rate (ETR) is higher in the early years of the CEOs' tenure and lowest in the last year of...

During March of 2021, a surprising narrative arose in the media – U.S. states not only did not incur decreases in tax collection during COVID-19, but many states saw substantial increases in collection. We consider this outcome from the perspective of progressive tax rates, income inequality,...

We examine how objective and subjective evidence determine the deferred tax asset valuation allowance (DTAVA). Our results suggest that managers primarily use objective evidence to assess the realizability of deferred tax assets, which is consistent with accounting standards and practitioner...

Starting in 2020, the SEC requires firms to disclose human capital information material to their operations. Many firms discuss their commitment to employee-level diversity, equity, and inclusion (DEI) in their human capital disclosures. We examine whether these disclosures reflect credible...

During the COVID-19 pandemic, states grappled with the question of whether and to what extent to impose restrictions to slow the spread of COVID-19. We investigate whether state reliance on sales tax revenue, relative to other tax revenue sources, is associated with shorter durations of COVID-19...

We examine the association between aggressive tax planning and labor investment efficiency among a sample of publicly listed U.S. firms. Labor is an important input to production that is material to many firms. Inefficient labor investments can have a considerable effect on future profitability...

Two forms of expertise can influence audit quality: industry and task-specific expertise. Anecdotal evidence suggests that tax knowledge is task-specific, rather than industry-specific and audit offices with increased exposure to complex tax issues develop this task-specific expertise. Using...

In this paper, we analyze the real effect of financial statement tax disclosures on corporate innovation activities. In 2007, the FASB enacted FIN 48, which mandates the separate and more detailed disclosure of reserves for unrecognized tax benefits (UTBs). Using patent applications as a measure...

Prior research indicates that expanded audit reports, which disclose financial statement matters that involved especially challenging, subjective, or complex auditor judgment (known as critical audit matters [CAMs] in the U.S.), have fallen short of their objective to provide investors with...