Research On The Impact Of Book-Tax Difference On Audit Fee

With the transformation of economic system in China,accounting and taxation have gradually become moderately separated from a high degree of consistency.Book-tax difference refers to the difference between the accounting profit and taxable income.It is not only a reflection of the differences resulting from systems,but also a potential reflection of earnings management and tax avoidance to some extent.The auditors pay attention to the earnings management and tax avoidance information contained in book-tax difference and improve the assessment of audit risks.The auditors will perform more audit procedures and increase the risk premium,which will increase audit fee.Taking Chinese A-share non-financial listed companies from 2011 to 2016 as a sample,this paper examines the impact of book-tax difference on audit fee.The results show that book-tax difference is positively related to audit fee.Further research finds that environmental uncertainty will increase the sensitivity between book-tax difference and audit fee.In areas with strong tax enforcement,the positive correlation between book-tax difference and audit fee will be weakened.