Flexible Tax Enforcement,Internal Control And Opinion Shopping

Based on the new development pattern of a large domestic cycle,a dual domestic and international cycle and the new requirements for high-quality development,the China Office and the State Office jointly emphasized the use of a social credit system to empower high-quality economic and social development and strengthen the integrity of the capital market.To further strengthen the foundation of rule of law and integrity in the capital market,intermediary service providers,including auditors,are required to exercise diligence and due diligence to enhance market transparency and better protect the rights and interests of investors.However,opinion shopping can directly undermine the independence of audits,reduce the quality of accounting information and the efficiency of market resource allocation.So,the regulatory governance of opinion shopping has become a key concern for academics at present.Can flexible tax collecction and management,as a reform of the government’s flexible regulatory management concept,effectively curb the opinion shopping of enterprises?And how does this external regulation perform in firms with different internal control qualities?In order to investigate the above questions,this paper uses tax credit rating policy as an entry point to analyse and deduce the regulatory and incentive effects of this flexible tax enforcement on firms’ opinion shopping based on relevant research literature and theories.On this basis,this paper selects A-share listed companies in China from 2015 to 2020 as the research sample,and draws on Lennox(2000)to measure the opinion shopping of listed companies using an opinion shopping model constructed by logit regression analysis,while selecting the level of internal control of enterprises as the moderating variable to examine the effect of tax credit rating policy on the opinion shopping of listed companies.The effect of tax credit rating policy on the opinion shopping of listed companies is examined,and further research including validation of the effect mechanism and heterogeneity analysis is conducted.Through rigorous empirical analysis and robustness tests,the following conclusions are drawn:(1)Tax credit rating can effectively discourage opinion shopping.(2)Tax credit ratings can effectively discourage opinion shopping in firms with low quality internal controls.(3)The regulatory and incentive paths of tax credit rating policy are confirmed by the agency cost and reputation variables.(4)By looking at firms,auditors and the external environment,we find that the disincentive effect of tax credit rating on opinion shopping is more pronounced among firms with non-state ownership,high supply chain concentration,audited by small firms,weak regional tax collection and low marketisation.This paper enriches the research on the regulatory governance of opinion shopping,expands the channels and ways for flexible tax enforcement to participate in corporate governance,and also provides theoretical reference and value for relevant departments to deepen flexible regulation,optimize the business environment and strengthen market supervision.