Noncompliance Essays

Risks Of Noncompliance In Corporate Governance

Regulatory compliance is very important for every organization. In the case of McBride Financial Services the understanding and the implementation of proper regulations are dire to the organizations future success. This analysis shows several recommendations offered to McBride and then shows the risk that the organization can face if they choose to ignore the given suggestions. This analysis also explores several organizations that have either been successful or unsuccessful in the compliance sector and shows how this has either contributed or hindered the success and growth of these organizations. Furthermore, this analysis gives McBride Financial Services a glimpse into their future either with or without the recommendations that have been given to them and also shows them what their organization has the potential to become if they are compliant and what is looming if they choose to be noncompliant.

Compare and Contrast Recommendations- RecommendationsUnderstand Regulatory System and Implement Compliance friendly RegulationsAn organizations understanding of rules and regulations that must be adhered to in order for them to maintain compliance is imperative to their success. One specific recommendation that was given to McBride Financial Services was for the organization to hire a consulting firm that would aid them in learning and understanding what it takes to be in compliance. If McBride chooses not to take this recommendation then they face the risk of being non-compliant which is an umbrella statement and holds several ramifications underneath. Based on information management online organizations can potentially lose more than they bargain if they choose not to comply with Sarbanes-Oxley Act regulations.

"Being found in non-compliance of SOX can have other negative affects on your business -beyond the levying of fines (or imprisonment if you are found willfully fraudulent). In addition to the governance and transparency requirements of the Act described above, SOX also creates new categories of infringement that include willful destruction of documents, management retaliation against whistle blowers and fraudulently influencing a company's auditors. Some two years after SOX was enacted, cases are just now reaching the courts. Where there are courts, there are lawyers; and where there are lawyers, there are always hefty legal bills. Companies that are found to be in non-compliance with SOX will also lose millions or more in revenues as consumers shun their products, and partners get as far away as possible. Further financial damage will be wreaked as shareholder value drops due to the reaction of the capital markets. Compounding this, such companies will also face material increases in their cost of capital, not to mention less access to capital. Large companies that trade debt through bond issues will face a tough foe in the...

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Transparency in Corporate Governance Essay

1405 words - 6 pages Transparency in Corporate PAGE \* MERGEFORMAT 1 Running head: TRANSPARENCY IN CORPORATE GOVERNANCETransparency in Corporate GovernanceUniversity of PhoenixTransparency in Corporate GovernanceThis paper evaluates the case of McBride Financial Services, Inc (MFSI), evaluating the concept in corporate...

Issues in corporate governance Essay

3524 words - 14 pages Title Page NumberExecutive Summary ...........2Introduction..............3What is corporate governance...............4Overview of CLERP 9............6Brief Overview of case..........6Decision on the case............8Recommendations for possible reforms.........10Directors duties............15Conclusion...............18References .............19Executive...

Importace of Corporate Governance

3419 words - 14 pages Untitled

Legal Regulation of Corporate Governance in the Role of Auditors

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Development Comparison of Corporate Governance in Malaysia and Singapore

1410 words - 6 pages The Asian Financial Crisis which exposed the corporate governance weaknesses was a wake-up call for all the policymakers, standard setters as well as the companies (OECD, 2014). The parties that involved and affected from the crisis started to realize the importance of having strong corporate governance practices in their countries. Consequently, the Asian economies along with the OECD established the Asian Roundtable on Corporate Governance in...

The Rising Importance of Corporate Governance in Contemporary Business Environment

1816 words - 7 pages Question 3Why has improved corporate governance become an increasingly important topic in recent years? Consider the cost and benefits of different groups (e.g. shareholders, employees, government etc) of changing rules in corporate governance.INTRODUCTIONThis paper aims to examine why corporate governance has become increasingly important in the contemporary business environment. Additionally, it...

Corporate governance and firm performance in Pharmaceutical industry of Pakistan

3362 words - 13 pages AbstractThere has been much discussion recently about whether corporate governance makes a difference in improving company performanceThis study is initiated on "corporate governance and firm performance" with the samples of 8 pharmaceutical companies using the data from their annual reports, representing the periods of 2008 - 2012. Board committee, board meeting and board size including executive...

Corporate Governance - Impact of Globilisation on Corporate Governance

2411 words - 10 pages THE IMPACT OF GLOBALISATION ON COPRORATE GOVERNANCE AND SOCIAL RESPONSIBILITYIt is now difficult to read a newspaper or a book, watch the television, surf the Internet, or participate in a demonstration without coming across references to how 'globalization' is affecting our lives. Globalisation is a complex phenomenon, with economic, political and cultural dimensions. At the centre are economic pressures stemming from trade...

A Survey on Compliance of Corporate Governance

4023 words - 16 pages Corporate governance has evolved into an important institute within recent years because of the highly visible corrupt and unethical practices of large and global companies such as Enron, WorldCom and Parmalat, the Italian dairy conglomerate. These unethical practices had left stakeholders and governments in a confused condition (Brian 1997 p616).It has constantly attracted...

Corporate governance: Role of institutional investors

2998 words - 12 pages Institutional investors have become predominant players in financial markets and their influence worldwide is growing. The abuse of power by many corporations has prompted increased the need for active institutional participation to enforce governance practices. Only institutional investors will have sufficient stake to be able to hold large corporations accountable. Encouraged by the institutional investors, responsible companies are now...

Implementation of a Corporate Governance Plan

2209 words - 9 pages Implementation of a corporate compliance plan to deal with the corporate governance issues for Riordan is the best opportunity for Riordan Manufacturing, Inc. to assess and analyze its internal control system. This process includes defining and implementing compliance steps and processes. Recommendations will include preventative solutions that incorporate risk mitigation. Additionally, Riordan will use a problem solving approach to determine...


Corporate tax noncompliance is a serious problem in many developed and developing countries. My PhD thesis is composed of two essays to investigate various factors that mitigate corporate tax noncompliance by listed Chinese firms.

The first essay examines whether a firm’s corporate tax noncompliance can be constrained by auditor quality. Past studies have shown that high-quality auditors are effective in reducing earnings management, which mainly involves overstatements of earnings. In this essay, I find that high-quality auditors are associated with better overall tax compliance by their client firms. In particular, high-quality auditors are effective in constraining book-tax-conforming noncompliance, which mainly involves understatements of both book and taxable income.

The second essay examines the tax noncompliance behavior of firms since the adoption of International Financial Reporting Standards (IFRS) in China, taking into account the influences of lower tax rates and more stringent tax enforcement. In recent years, many countries have moved away from tax-based accounting and toward adopting IFRS which increase tax noncompliance. At the same time, there has been a general reduction of corporate income tax rates as a means to increase tax competitiveness. Lower tax rates should be associated with decreases in tax noncompliance. Similarly, firms should be more tax compliant under a more stringent tax enforcement regime. In this essay, I find that the negative effect of book-tax delinking on tax noncompliance is significantly attenuated for firms that are subject to lower tax rates or more stringent tax enforcement measures. This essay also provides evidence that the effects of tax rates and of tax enforcement measures are more pronounced in the lower book-tax conformity period.

Recommended Citation

Luo, K. W. R. (2015). Two essays on the mitigating factors of corporate tax noncompliance (Doctor's thesis, Lingnan University, Hong Kong). Retrieved from

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