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Curtailing Auditors’ Tax Services For Appearances Brings Higher Rates

Heightened by infamous accounting scandals two a long time back involving Enron, WorldCom, Arthur Andersen accountancy, and many others, suspicions have persistently dogged companies whose auditors carry out consulting solutions for them in addition to core accounting features. And most likely no further solutions have evoked a lot more issue than all those related to taxes.

Certainly, regulatory actions have probably produced an ambiance that enthusiastic companies to minimize or remove tax costs paid out to audit companies to bolster the visual appearance of independence in their auditor-customer romance, in accordance to a new examine in Accounting Horizons. But the evidence is mixed on whether or not the provision of tax solutions in actuality compromises auditors’ independence — and therefore diminishes the dependability of their customer firms’ fiscal reporting.

The new examine investigates a related problem that has gained sparse notice: What is the fiscal impression on companies that drop

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