Income-shifting arrangements, audit specialization and uncertain tax benefits, international tax risk, and audit specialization: Evidence from US multinational firms
© 2018 John Wiley & Sons Ltd. The purpose of this study is twofold. First, it examines the association between income-shifting arrangements consisting of transfer pricing aggressiveness, tax haven use and foreign tax rate differentials, and Financial Interpretation No. 48 (FIN48, now ASC740-10...
| Main Authors: | , , |
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| Format: | Journal Article |
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Wiley-Blackwell
2018
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| Online Access: | http://hdl.handle.net/20.500.11937/69036 |
| _version_ | 1848761951251857408 |
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| author | Taylor, Grantley Richardson, G. Al-Hadi, Al-Hadi Ahmed |
| author_facet | Taylor, Grantley Richardson, G. Al-Hadi, Al-Hadi Ahmed |
| author_sort | Taylor, Grantley |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | © 2018 John Wiley & Sons Ltd. The purpose of this study is twofold. First, it examines the association between income-shifting arrangements consisting of transfer pricing aggressiveness, tax haven use and foreign tax rate differentials, and Financial Interpretation No. 48 (FIN48, now ASC740-10-25) unrecognized tax benefits (UTBs). Second, it analyzes the impact of audit specialization on the association between income-shifting arrangements and UTBs. Using a dataset of 286 US multinational firms over the 2007-2016 period (2,097 firm-years), our regression results show that income-shifting arrangements represented by transfer pricing aggressiveness, tax haven use and foreign tax rate differentials are significantly positively associated with UTBs. We also observe that audit specialization magnifies the positive association between transfer pricing aggressiveness and UTBs, and foreign tax rate differentials and UTBs. Finally, in additional analysis we provide some evidence that the positive association between income-shifting arrangements and UTBs is magnified in the post-2010 uncertain tax position reporting requirement period. Overall, our study extends prior research on the topic of audit characteristics (i.e., audit specialization) and tax aggressiveness. |
| first_indexed | 2025-11-14T10:39:49Z |
| format | Journal Article |
| id | curtin-20.500.11937-69036 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T10:39:49Z |
| publishDate | 2018 |
| publisher | Wiley-Blackwell |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-690362018-06-29T12:36:11Z Income-shifting arrangements, audit specialization and uncertain tax benefits, international tax risk, and audit specialization: Evidence from US multinational firms Taylor, Grantley Richardson, G. Al-Hadi, Al-Hadi Ahmed © 2018 John Wiley & Sons Ltd. The purpose of this study is twofold. First, it examines the association between income-shifting arrangements consisting of transfer pricing aggressiveness, tax haven use and foreign tax rate differentials, and Financial Interpretation No. 48 (FIN48, now ASC740-10-25) unrecognized tax benefits (UTBs). Second, it analyzes the impact of audit specialization on the association between income-shifting arrangements and UTBs. Using a dataset of 286 US multinational firms over the 2007-2016 period (2,097 firm-years), our regression results show that income-shifting arrangements represented by transfer pricing aggressiveness, tax haven use and foreign tax rate differentials are significantly positively associated with UTBs. We also observe that audit specialization magnifies the positive association between transfer pricing aggressiveness and UTBs, and foreign tax rate differentials and UTBs. Finally, in additional analysis we provide some evidence that the positive association between income-shifting arrangements and UTBs is magnified in the post-2010 uncertain tax position reporting requirement period. Overall, our study extends prior research on the topic of audit characteristics (i.e., audit specialization) and tax aggressiveness. 2018 Journal Article http://hdl.handle.net/20.500.11937/69036 10.1111/ijau.12117 Wiley-Blackwell restricted |
| spellingShingle | Taylor, Grantley Richardson, G. Al-Hadi, Al-Hadi Ahmed Income-shifting arrangements, audit specialization and uncertain tax benefits, international tax risk, and audit specialization: Evidence from US multinational firms |
| title | Income-shifting arrangements, audit specialization and uncertain tax benefits, international tax risk, and audit specialization: Evidence from US multinational firms |
| title_full | Income-shifting arrangements, audit specialization and uncertain tax benefits, international tax risk, and audit specialization: Evidence from US multinational firms |
| title_fullStr | Income-shifting arrangements, audit specialization and uncertain tax benefits, international tax risk, and audit specialization: Evidence from US multinational firms |
| title_full_unstemmed | Income-shifting arrangements, audit specialization and uncertain tax benefits, international tax risk, and audit specialization: Evidence from US multinational firms |
| title_short | Income-shifting arrangements, audit specialization and uncertain tax benefits, international tax risk, and audit specialization: Evidence from US multinational firms |
| title_sort | income-shifting arrangements, audit specialization and uncertain tax benefits, international tax risk, and audit specialization: evidence from us multinational firms |
| url | http://hdl.handle.net/20.500.11937/69036 |