Tax avoidance and audit quality: evidence from Spanish listed and non-listed companies

Purpose This study examines whether the association between audit quality and corporate tax avoidance (TA) is heterogeneous across the TA distribution and whether it differs between listed and non-listed firms. Prior evidence is limited and inconclusive, with sign reversals across settings and specifications. We address this gap by jointly analysing both firm types and applying quantile regression to document distributional variation. Design/methodology/approach We apply quantile regression to a sample of Spanish firms (2008–2019), using two audit quality proxies (BIG4 and TENURE), estimating the models separately for listed and non-listed firms and using Panel-Corrected Standard Errors (PCSE) estimates as linear benchmarks. Findings For non-listed firms, both proxies exhibit heterogeneous associations across the TA distribution. BIG4 is associated with higher tax burdens among conservative firms and with larger book–tax gaps in the upper part of the BTG distribution, while TENURE displays a sign reversal across the BTG distribution. For listed firms, BIG4 shows a broadly homogeneous association with higher tax burdens, whereas TENURE shows no significant association. These patterns are largely obscured under mean-based estimation. Originality/value To our knowledge, this is the first study to examine the audit quality–TA association in listed and non-listed firms within the same institutional setting using quantile regression, documenting substantial differences between the two groups. We incorporate auditor tenure alongside BIG4, capturing a less-explored dimension of audit quality, and develop an asymmetric cost–benefit framework suggesting that prior mixed evidence may reflect mean-based estimators rather than underlying contradictions.