A study of multinational companies headquartered in Europe found that expanded audit-report disclosures about uncertain tax positions were associated with less international income shifting. The finding concerns corporate tax planning—not consumer money transfers—and applies to a sample of firms in 25 European nations from 2012 through 2021. The study’s public abstract reports no percentage estimate, so it does not show how large the decline was.
What the study means by international money moves
Here, “international income shifting” means moving or allocating taxable income across countries within a multinational group, potentially to reduce its tax burden. It is not about individuals sending money abroad or about restrictions on ordinary bank transfers.
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The study examines whether expanded audit reports can make certain tax risks more visible. Its focus is one type of expanded-report disclosure: a key audit matter related to an uncertain tax position, or UTP. A UTP is a tax position for which a company maintains a reserve because an audit could result in more tax being due than the company anticipates.
What changed in the audit reports
Key audit matters (KAMs) are disclosures in an auditor’s report about matters that were important, complex, or challenging during the audit of a company’s financial statements. The paper looks specifically at KAMs concerning UTPs, rather than treating every KAM as equivalent.
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Countries introduced expanded audit reports in different years. The researchers used this staggered adoption to study changes over time. Co-author Nathan Goldman described the variation as a “natural experiment,” because the countries did not all introduce expanded reporting at once. That design offers a way to examine the relationship between disclosure and company behavior, but it does not mean the result proves that a disclosure alone caused a company to change its tax planning.
What researchers found
The paper’s abstract says group-level KAM disclosures were associated with a decline in multinational income shifting when the disclosures concerned UTPs. In a North Carolina State University release, Goldman summarized the finding as multinational corporations with a UTP KAM in their audit being “substantially less likely” to engage in international income shifting.
The reported relationship was stronger in three circumstances:
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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errors- Firms were financially unconstrained. The association was stronger for companies not facing financial constraints.
- Tax enforcement was strong. The association was stronger where tax enforcement was stronger.
- Disclosures were more specific and explicit. The relationship was stronger when KAMs identified specific risk statements and auditors gave explicit assurance.
These are differences in the strength of the reported relationship, not a quantified ranking of which condition matters most. The public abstract and university release do not provide an estimated percentage decline or confidence intervals.
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- Author: Orrin Woodward.
- Pages: 123
- Publication Date: 2021
- Edition: 3rd
- Binding: Hardcover
How broad is the evidence?
The study, “Tax-related Key Audit Matters and Changes in Multinational Income Shifting,” was reported as published in The Accounting Review on October 7, 2026. Its described sample covers Europe-headquartered multinationals operating in multiple countries, with positive pre-tax income and publicly available financial statements, over 2012–2021.
| Study detail | Reported scope |
|---|---|
| Countries | 25 European nations |
| Study period | 2012–2021 |
| Affiliate-year observations | 207,792 |
| Companies | 8,389 |
| Affiliates | 45,909 |
The researchers drew on Amadeus financial-reporting data, the IMF World Economic Outlook Database, and Tax Foundation data. The sample and reported result do not establish that the same relationship holds for every multinational, all audit disclosures, countries outside the sample, or years after 2021. The accessible abstract also does not provide the full methods, robustness checks, or limitations needed to assess those questions in detail.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the finding does—and does not—show
The central takeaway is narrow: in this European sample, group-level audit disclosures about uncertain tax positions were associated with less multinational income shifting, and the association was stronger under specified enforcement, financial, and disclosure conditions.
It is not evidence that every new auditing rule curbs international income shifting, nor does it establish a universal causal effect. The abstract does not say how much shifting declined, and the evidence summarized in the university release does not support a numerical estimate. The result is best read as evidence that more transparent reporting of certain tax risks may matter in particular settings, not as a guarantee that expanded reports will change corporate behavior everywhere.
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Study and source details
The authors are Christof Beuselinck of IESEG School of Management and LEM, Nathan Goldman of North Carolina State University, Jochen Pierk of Erasmus University Rotterdam, and Cinthia Valle Ruiz of IE University. The paper’s DOI is 10.2308/TAR-2024-0168. The university release, dated October 9, 2026, reproduces the abstract and quotes Goldman: North Carolina State University’s account of the study.
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