This study investigates the importance of top executives for foreign tax planning in multinational corporations. Applying incremental R 2 comparisons and Shapley Value decompositions, we find that executives account for meaningful variation in foreign tax planning and the number of foreign (tax haven) subsidiaries, but have limited influence on effective tax rates in nonhaven affiliates. We further provide initial evidence that executive influence declined following the Tax Cuts and Jobs Act of 2017 (TCJA), with the decrease being less pronounced for foreign effective tax rates than for domestic ones. Overall, our findings highlight how managers’ influence varies with their firms’ internal structures and external policy changes. Our results contribute to the literature on executive effects, multinational tax planning, and the behavioral implications of tax policy reforms.

Key audit matters (KAMs) increase the salience of uncertainty surrounding the underlying accounts. We examine KAMs related to uncertain tax positions (UTPs), which highlight potential concerns to external stakeholders about uncertain tax planning activities such as multinational income shifting. Increased scrutiny may reduce the expected benefits of these strategies and discourage firms from pursuing them. Using KAM disclosures in the expanded audit reports, we find that group-level KAM disclosures are associated with a decline in multinational income shifting when the KAMs relate to UTPs. This relation is stronger when firms are financially unconstrained, when the institutional environment features strong tax enforcement, and when KAMs highlight specific risk statements and auditors provide explicit assurance. Overall, our findings reveal a novel and potentially unintended real effect of expanded audit reports: the salience of tax-related KAM disclosures influences multinational tax planning, highlighting broader consequences of this regulatory intervention. Data Availability: Data are available from the public sources cited in the text.