The effect of chief financial officers’ accounting expertise on corporate tax avoidance: the role of compensation design

  • Ming-Chin Chen
  • Chia-Wen ChangEmail author
  • Mei-Chueh Lee
Original Research


Accounting expertise is closely related to corporate tax planning, and hence, corporate chief financial officers (CFOs) with accounting expertise may have advantages in exploiting tax planning opportunities. By manually collecting CFOs’ autobiographic information and identifying their accounting-related work experience, we empirically examine whether a CFO with accounting expertise is more likely than a CFO without such expertise to exploit tax planning opportunities, resulting in greater corporate tax avoidance. We find that CFOs with accounting expertise are negatively associated with corporate effective tax rates. The average effective tax rate of firms with accounting expert CFOs is approximately 19.4% lower than that of their counterparts with non-accounting expert CFOs, ceteris paribus. Moreover, the abnormal variable compensation of CFOs with accounting expertise is negatively associated with corporate effective tax rates. The results suggest that the accounting expertise and compensation schemes of CFOs can have a significant effect on the aggressiveness of corporate tax planning.


Tax avoidance Effective tax rate Compensation design Chief financial officer 

JEL Classification

M41 H26 J33 



Ministry of Science and Technology, Taiwan (Grant No. 106-2410-H-130 -020 -)


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of AccountingNational Chengchi UniversityTaipei CityTaiwan, ROC
  2. 2.Department of AccountingMing Chuan UniversityTaipei CityTaiwan, ROC
  3. 3.Department of Accounting InformationTakming University of Science and TechnologyTaipei CityTaiwan, ROC

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