Table 5 Robustness tests.

From: Does the supply of tax information affect financial restatements? Evidence from the launch of Taxation Administration Information System III in China

 

(1)

(2)

(3)

(4)

(5)

Variables

EMJones

EMDD

AuditOpinion

C-Score

ACF

Panel A. Different proxies of financial reporting quality

CTAIS

−0.005*

−0.009**

−0.012***

−0.053*

−0.060*

 

(−1.66)

(−2.13)

(−3.51)

(−1.88)

(−1.79)

Size

0.002

0.010***

−0.001

−0.174***

−0.031*

 

(1.07)

(3.45)

(−0.31)

(−7.55)

(−1.86)

Lev

0.032***

0.011

0.017

0.373***

0.071

 

(3.91)

(0.92)

(1.05)

(4.16)

(0.98)

ROA

−0.207***

0.039**

−0.572***

−0.193

0.689***

 

(−10.78)

(2.06)

(−13.05)

(−1.01)

(4.73)

CashHold

0.014*

−0.010

−0.014

0.051

0.109

 

(1.86)

(−0.79)

(−1.20)

(0.61)

(1.34)

TobinQ

0.004***

0.001

0.003*

−0.015

0.035***

 

(4.50)

(1.15)

(1.84)

(−1.59)

(3.91)

Indep

−0.001

−0.004

0.050

−0.487*

−0.137

 

(−0.04)

(−0.14)

(1.39)

(−1.67)

(−0.68)

GDP

−0.003

−0.007

0.021

−0.541***

−0.165

 

(−0.32)

(−0.50)

(1.13)

(−3.85)

(−1.32)

AvgSalary

−0.006

−0.004

−0.005

0.180

−0.242***

 

(−0.70)

(−0.37)

(−0.42)

(1.33)

(−2.92)

FiscInc

0.014*

0.012

−0.027**

0.306***

0.150*

 

(1.82)

(1.04)

(−2.04)

(3.07)

(1.72)

Firm Fix

Yes

Yes

Yes

Yes

Yes

Year Fix

Yes

Yes

Yes

Yes

Yes

Observations

23,771

23,286

26,222

21,113

24,348

R-squared

0.267

0.285

0.289

0.293

0.154

 

(1)

(2)

Variables

Restate_count

 

Panel B. Alternative measurement

CTAIS

−0.016*

−0.022**

 

(−1.87)

(−2.51)

Firm Cons

No

Yes

Prov Cons

No

Yes

Firm Fix

Yes

Yes

Year Fix

Yes

Yes

Obs

26,222

26,222

R-squared

0.439

0.441

 

(1)

(2)

(3)

Variables

Controling province linear trend

Controling industry linear trend

Controling industry*year-fixed effect

Panel C. Linear time trend and fixed effects

CTAIS

−0.030***

−0.031***

−0.030***

 

(−2.92)

(−3.06)

(−2.88)

Firm Cons

Yes

Yes

Yes

Prov Cons

Yes

Yes

Yes

Prov Trend

Yes

No

No

Ind Trend

No

Yes

No

Firm Fix

Yes

Yes

Yes

Year Fix

Yes

Yes

No

Ind*Year Fix

No

No

Yes

Observations

26222

26222

26219

R-squared

0.417

0.417

0.425

  1. Source: Calculated based on data from the CSMAR database.
  2. This table presents the robustness tests. Data are from the CSMAR database. Panel A examines the effect of CTAIS-3 on different proxies of financial reporting quality, including corporate earnings management calculated using the modified Jones model from Dechow et al. (1995) in Column (1), earnings management calculated using the Dechow and Dichev (2002) model in Column (2), whether the auditor issued a going-concern opinion in Column (3), and accounting conservatism measured by C-score (Khan and Watts, 2009) and ACF score (Ball and Shivakumar, 2006) in Columns (4) and (5). Panel B uses the natural logarithm of the number of restatements in a fiscal year as dependent variables. Panel C incorporates linear time trends and different fixed effects. All regressions incorporate Firm and Year-fixed effects. Levels of statistical significance are indicated as follows: *** for 1%, ** for 5%, and * for 10%.
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