...Yangmei Wang; Kirsten A. Cook SYNOPSIS We examine whether suspect firms (that precisely meet or narrowly beat earnings benchmarks) decrease investments in tax planning to manage earnings; we refer to this strategy as the direct method of modifying discretionary tax fees to increase net income. We...

... compliance and planning work, their clients' audit committees must approve these services in advance. ¹ SOX also requires companies to disclose NAS fees, including a separate tax-fee disclosure, paid to audit firms in their annual proxy statements; the Securities and Exchange Commission (SEC...