Corporate tax savings when hiring a Big 4 auditor: Empirical evidence for Belgium

Janssen, Boudewijn;Vandenbussche, Hylke;Crabbé, Karen
(2005) , 19 pages

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Authors
  • Janssen, BoudewijnMaastricht University
    Author
  • Vandenbussche, HylkeUCLouvain
    Author
  • CrabbĂ©, KarenKUL
    Author
Abstract
In this paper we show that hiring a Big 4 auditor results in substantial corporate income tax savings, compared to hiring a non-Big 4 auditor. Our results are obtained from an empirical model that controls for other factors that may affect companies' income tax burdens. We use a population of larger Belgian firms between 1993 and 2002. The findings suggest that Big 4 audited firms provide (explicitly or implicitly) additional tax expertise which is transferred to their clients and lowers their effective tax rates compared to non-Big 4 audited firms.
Affiliations
  • KUL
  • Maastrich UniversityFaculty of Law

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Janssen, B., Vandenbussche, H., & Crabbé, K. (2005). Corporate tax savings when hiring a Big 4 auditor: Empirical evidence for Belgium (KUL Research Report 0541). https://hdl.handle.net/2078.5/35171