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When Tax Strategies Are Problematic for Firms – and Investors
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When Tax Strategies Are Problematic for Firms – and Investors

Knowledge at Wharton·Knowledge at Wharton Staff·about 1 month ago
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Many corporations work with tax planning firms to reduce their liability and improve their bottom line. But when an accounting agency is too aggressive, a lack of transparency can develop, which often increases the financial complexity of the organization. This can become problematic for outside parties such as stockholders or investors who need all of the appropriate information to make good decisions about their investments. New research from Wharton accounting professors Jennifer Blouin and Wayne Guay, and Karthik Balakrishnan, a former Wharton accounting professor now at the London School of Business, shows the significance of the problem. Blouin and Guay spoke on the Knowledge at Wharton radio show about their paper, “ Does Tax Aggressiveness Reduce Financial Reporting Transparency? ” The research was published in The Accounting Review . (Listen to the podcast at the top of this page.) An edited transcript of the conversation follows.…

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