| ID | 192999 |
| Title Proper | Inquiry letters and tax aggressiveness |
| Language | ENG |
| Author | Yewei, Wu ; Zhang, Bofu |
| Summary / Abstract (Note) | This study examined the impact of inquiry letters on corporate tax aggressiveness based on the special inquiry system in Chinese stock exchanges. It found that the receipt of inquiry letters significantly inhibited tax aggressiveness. The channel through which inquiry letters worked involved a monitoring effect on related-party transactions. The disincentive effect of inquiry letters on corporate tax aggressiveness was mainly found in firms with overseas operations, low-quality of internal control, and weak tax enforcement. Examining the textual information in inquiry letters, the results show that more questions and the demand for a specific opinion from the auditor led to a greater disincentive effect. The level of detail in firms' reply letters weakened this disincentive effect. Finally, the disincentive effect of tax aggressiveness was more pronounced when inquiry letters pointed to tax-related issues. |
| `In' analytical Note | China and World Economy Vol. 31, No.4; Jul-Aug 2023: p.37-65 |
| Journal Source | China and World Economy Vol: 31 No 4 |
| Key Words | Disincentive Effect ; Inquiry Letters ; Related Party Transactions ; Tax Aggressiveness |