Abstract
This paper examines whether the increased accounting guidance and reporting requirements of FIN 48 impact the adequacy and accuracy of tax reserves and the effect of auditor-provided tax services on tax reserves. While we do not find FIN 48 affected the adequacy or accuracy of tax reserves on average, FIN 48 eliminated the differences in the tax reserve adequacy of firms with and without auditor-provided tax services that existed prior to its adoption. We also find evidence of less premature releasing of tax reserves post-FIN 48. Our evidence is consistent with an increase in the comparability of reserves for firms that do and do not purchase auditor-provided tax services, consistent with one of the FASB’s objectives for FIN 48.
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June 01, 2017 at 07:36PM
from Cristi A. Gleason, Lillian F. Mills, Michelle L. Nessa
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