We investigate consequences of tax-related material weaknesses in firms’ internal controls over financial reporting. We hypothesize that the presence of internal control material weaknesses (i.e., ICMWs) over the tax function makes earnings management through the income tax accrual (Dhaliwal...

We investigate whether quarterly annual effective tax rate (ETR) estimates are systematically biased in comparison to year-end actual ETRs. We find that estimated annual ETRs in the first, second, and third quarters are systematically higher than year-end ETRs. We then investigate whether firms'...

This paper examines whether book-tax differences help explain audit fees. By attesting to the fair representation of financial information, auditors are an important intermediary in financial statement users' trust and understanding of financial information. Our evidence that large book-tax...