Dissertations, Theses and Capstone Projects

Date of Award

Summer 2013

Degree Type


Degree Name

Doctor of Business Administration (DBA)



First Advisor

Dr. Divesh Sharma

Second Advisor

Dr. Marshall Geiger

Third Advisor

Dr. Jennifer Schafer


Allegations of tax abuse at Enron, WorldCom, and others generated scrutiny from regulators, public markets, and the media. In response, accounting researchers have sought to understand factors that drive corporate tax avoidance. While historical research has focused on firm characteristics, little emphasis has been placed on the executive who develops corporate tax strategy.

This study addresses this issue by considering how the internal tax function (ITF) and in-house tax expertise influence tax avoidance. I examine the association between tax avoidance, denoted BOOK_ETR, which is measured as the Generally Accepted Accounting Principles effective tax rate, and (1) the existence of an ITF, (2) background characteristics of the chief tax officer (or inhouse tax expert (IHTE)), and (3) the existence of accounting, tax, or legal audit committee (AC) expertise.

In an analysis of 1,400 firm-year observations, I find that an ITF is associated with lower BOOK_ETRs. This relationship is especially pronounced in firms that are smaller, less profitable, have foreign operations, or do not use their auditor for tax services. Additionally, I find that AC legal expertise is associated with higher BOOK_ ETR.

In an analysis of IHTE characteristics, I find that an IHTE who is a certified attorney is positively related to BOOK_ETR and, therefore, engages in less tax avoidance. However, an IHTE with international experience, prior employment with the firm’s auditor, or longer tenure with his or her current employer is negatively associated with BOOK_ETR. IHTE certification, gender, and overall years of experience are not associated with BOOK_ETR.

Finally, I find that the respective relationships between BOOK_ETR and an ITF or IHTE characteristics are moderated by certain types of AC expertise. Specifically, I find that an ITF is not associated with lower BOOK_ETR when an AC member has either tax or accounting expertise. I also find that attorney certification is significantly and positively associated with BOOK_ETR only in the presence of AC accounting expertise. Finally, I find that a Certified Public Accountant designation, Masters in Accounting, and Masters in Business Administration are only significant in the presence of AC tax, legal, and tax or legal expertise, respectively.

Included in

Accounting Commons