Book-tax Differences?Property Rights And Audit Fees

In order to adapt to the development requirements of China's market economy,China's accounting standards and corporate income tax law have changed from a highly unified model to a moderately separated model,which will lead to a difference between the total accounting profit and the taxable income,that is,Book-tax differences.China's accounting system and taxation regulations have different objectives.There are also differences in the recognition and measurement of income and expenses.This also shows that the Book-tax differences have certain objective inevitability,and the existence of Book-tax differences also exists.It provides the possibility for earnings management and tax avoidance for companies.As a financial indicator,Book-tax differences can reflect the company's earnings management and tax avoidance information,which reflects the degree of earnings manipulation and financial risk of the company to a certain extent.In the audit market,China's audit pricing system is still not perfect.In order to seize customers and achieve greater profits,some accounting firms may have problems in collecting audit fees at low prices,and CPAs as independent third parties are assessing audit risks.When will it focus on the information contained in Book-tax differences and adjust audit fees?Under the special institutional environment in China,whether there is a difference in the impact of Book-tax differences on audit fees under different property rights will be an important issue in this paper.This paper first reviews the influencing factors of Book-tax differences,the influencing factors of audit fees,and the correlation between Book-tax differences and audit fees.Then,based on information asymmetry theory,risk premium theory and deep pocket theory,the audit fees are fine.Divide and propose corresponding research hypotheses.This paper takes all listed companies of Shanghai and Shenzhen A shares as the research object,selects the sample interval from 2013 to 2017,empirically tests the relationship between Book-tax differences and normal audit fees and abnormal audit fees,and tests the Book-tax differences and positive relationship between abnormal audit fees and negative abnormal audit fees.In addition,this paper introduces the nature of property rights to further test whether there are differences between state-owned enterprises and non-state-owned enterprises.The empirical results show that there is a significant positive correlation between Book-tax differences and normal audit fees andabnormal audit fees;Book-tax differences are positively correlated with positive abnormal audit fees,and negatively correlated with negative abnormal audit fees;After grouping and returning the nature of property rights,the research results show that compared with state-owned enterprises,the positive relationship between Book-tax differences and normal audit fees and abnormal audit fees in non-state-owned enterprises is more significant;Book-tax differences for positive abnormal audit fees And the impact of negative anomaly audit fees is also more pronounced in non-state-owned enterprises.According to the above research conclusions,this paper puts forward three policy recommendations.The first is to increase the disclosure of tax information by enterprises,raise the awareness of corporate information disclosure,and impose strict punishment measures on enterprises that violate regulations,especially the existence of earnings management behavior.The listed company shall impose severe penalties,in addition to disclose important tax information such as the taxable income of the enterprise;the second is to improve the auditor's emphasis on Book-tax difference indicator,auditors should strengthen the study of professional knowledge,in the audit process should focus on the information contained in Book-tax differences,improve their ability to identify risks,to effectively identify Earnings management and tax avoidance behaviors of enterprises,maintaining audit independence,can help to ensure audit quality;the third is to establish a sound taxation supervision system.On the one hand,China's regulatory agencies should strengthen the supervision of listed companies with large differences in accounting and taxation,and prevent their tax avoidance behavior.On the other hand,China should strengthen the cooperation between accounting standards and tax regulations.At the same time,we must pay attention to the issue of tax team construction.