An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Jayanthi Krishnan
Temple University

Abstract: Recent discussions of the provision of non-audit services (NAS) by auditors have focused specifically on tax services, with detractors recommending that all such services be proscribed. The main concern is that due to their dependence on the client, auditors that supply tax services may provide questionable tax advice that helps their clients avoid taxes. Using the effective tax rate (ETR) as the measure of corporate tax liabilities, I examine whether there is an association between the magnitude of tax NAS fees and the effective tax rate. The sample time period covers 2003-2004, following the effective date of the new SEC rules requiring specific disclosure of tax NAS fees. Preliminary results indicate no strong support for the concern that the provision of tax NAS results in lowering corporate tax liabilities.

Back to Session Listing

AAA Home Page