The purpose of this paper is to empirically elucidate whether changes in corporate tax rates in Japan have impacted firms’ implicit tax burdens. Previous studies have shown that changes in corporate tax rates function as a motivation for income shifting. However, the effects on the explicit tax burden reduction through income shifting and the pre-tax return on investment, which constitutes the implicit tax burden at the firm level, have not been thoroughly examined. Therefore, this paper examines whether the gradual reduction in corporate tax rates, viewed as tax incentives, has influenced firms’ implicit tax burdens. The analysis reveals that a reduction in firms’ explicit tax burdens, i.e., a decrease in corporate tax rates, is associated with a decrease in pre-tax profits. Additionally, contrary to the theoretical mechanism that a change in corporate tax rates would result in general implicit taxes, it was found that the pre-tax profits at the firm level increased when corporate tax rates were altered. This can be interpreted as a decrease in investment due to income shifting caused by the tax rate reduction. Implicit taxes are an important consideration not only for corporate taxpayers but also for policymakers aiming to achieve improvements in corporate value and productivity. This paper contributes to tax accounting research and policy formulation by examining the implicit taxes at the firm level, an area that has not been previously investigated in Japan, from the perspective of tax rate changes.

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　In this study, we investigate the impact of a reduction in the corporate tax rate on cost stickiness in Japan. The corporate tax rate in Japan had been gradually reduced since the early years. Changes in the corporate tax rate have a direct impact on the corporate tax burden of firms and provide incentives for firms to transfer income during the period when the lower tax rate is applied. Therefore, we expect to observe stronger cost stickiness in the period when the higher tax rate is applied before the corporate tax rate is reduced. We analyze data in Japanese firms from 2008 to 2023, which includes 4 tax reductions. The results show that a reduction in the corporate tax rate affects cost stickiness. Moreover, the impact of the reduction in the corporate tax rate is found for firms with higher tax burden.

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　This paper empirically examines how the selection of key audit matters （KAM） related to goodwill impairment（ GWIKAM） influences managerial discretion in the recognition of goodwill impairment losses. The findings indicate that when GWIKAM is selected by an auditor, managerial discretion in the recognition of goodwill impairment losses associated with （1） earnings smoothing,（ 2） management turnover, and（ 3） high performance-based compensation is significantly constrained. Furthermore, the results indicate that while this effect is observed when GWIKAM continues to be selected, the effect disappears once it is removed from the KAM list. These findings provide important insights into audit practices to facilitate the appropriate recognition of goodwill impairment losses and provide empirical evidence regarding the effects of KAM selection.

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　This study examines the effect of financial reporting quality on labor investment efficiency using Japanese firms. I find a positive relationship between financial reporting quality and labor investment efficiency. Similar results were confirmed in the analysis using alternative measurements of labor investment efficiency and financial reporting quality. Moreover, according to the subsample analysis, high-quality financial reporting improves labor investment efficiency by mitigating overinvestment （overhiring and underfiring） and underinvestment （underhiring and overfiring） in labor. Overall, the results suggest that high-quality financial reporting is associated with more efficient labor investment.

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