Chatzi, Kalliopi, Dedoulis, Emmanouil and Leventis, Stergios (2026) The effect of voluntary private tax audits on tax aggressiveness and tax audit fees. In: 48th European Accounting Association Annual Congress, 27th - 29th May, Prague University of Economics and Business, Czech Republic.

PDF (Author's Accepted Manuscript) 52595 CHATZI_The_Effect_Of_Voluntary_Private_Tax_Audits_On_Tax_Aggressiveness_(AAM)_2026.pdf - Accepted Version Restricted to Repository staff only Download (1MB) | Request a copy

Abstract

This study examines the effects of a regulatory shift in Greece that initially mandated tax audits by private (external) auditors for large firms from 2011 to 2015. In 2016, the mandate was lifted, allowing firms to either continue private audits or revert to audits conducted by public tax authorities. This shift created a natural experiment, allowing analysis of audit choice as a signal of managerial risk preference and tax aggressiveness. Using firm-level data from 2011 to 2019, we compare outcomes across two regimes: the mandatory private audit regime (2011–2015) and the voluntary audit regime (2016–2019). We find that tax aggressiveness decreased following the switch to voluntary audits, with a more pronounced reduction among firms that chose to continue with private audits. Additionally, tax audit fees declined under the voluntary regime, especially for firms that engaged Big 4 auditors. Our findings support agency theory, suggesting that voluntary audit choice acts as a bonding mechanism, reducing information asymmetry and perceived audit risk. Robustness checks, including Heckman selection models, instrumental variable analysis, and matching methods, confirm the reliability of the results.

Item Type:	Conference or Conference Paper (Paper)
Uncontrolled Keywords:	tax audit choice, corporate tax aggressiveness, audit fees, tax audit fees, agency theory, voluntary tax audit regime, Big 4 auditors
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HJ Public Finance
Faculty / School / Research Centre / Research Group:	Greenwich Business School Greenwich Business School > School of Accounting, Finance and Economics
Last Modified:	04 Mar 2026 12:20
URI:	https://gala.gre.ac.uk/id/eprint/52595

Actions (login required)

View Item

Downloads