An Examination of the Impact of Tax Avoidance on the Readability of Tax Footnotes
研究发现，避税程度低于行业中位数的公司，其税务脚注更易读，以突出节税业绩；而避税程度高于中位数的公司，脚注更难读，以向税务机关隐藏信息。
ABSTRACT Due to the proprietary nature of tax returns, the tax footnote is the primary source of information for stakeholders about a firm's tax position. However, studies suggest the tax authority acquires information in tax disclosures, creating a trade-off for managers on whether to provide decision-useful information for stakeholders or conceal information from the tax authority. We investigate this trade-off by examining the readability of tax footnotes. We find a positive association between tax avoidance and tax footnote readability for firms with tax avoidance below the industry-year median, consistent with managers highlighting good performance in the form of tax savings with straightforward disclosures. In contrast, we find a negative association between tax avoidance and tax footnote readability for firms with levels of tax avoidance above the industry-year median, consistent with managers concealing tax avoidance from the tax authority. Reinforcing these results, we find that investors place a premium (discount) on tax avoidance when the tax footnote is straightforward in firms with tax avoidance below (above) the industry-year median.