Financial and accounting supervision has been integrated into the national supervision system in China. This not only marks the elevation of the strategic position of financial and accounting supervision in national governance, but also means that financial supervision has been given new missions and responsibilities. In December 2020, the Supervision and Evaluation Bureau of the Ministry of Finance proposed to organize local supervision bureaus to implement the pilot reform aimed at enhancing financial and accounting supervision in Jiangsu, Shanghai, Shandong, Anhui, and other regions, in order to foster the financial and accounting supervision models and accelerate the establishment and improvement of a standardized financial and accounting supervision system. As the pilot reform deepens, regional regulatory bureaus employ big data and information technology to select key enterprises for on-site standardized supervision, so as to advance regulatory inspections and actively affect corporate accounting, financial management, and internal control.

This paper takes the pilot reform of financial and accounting supervision as a quasi-natural experiment to empirically test its impact and mechanism on corporate tax avoidance. The study finds that the new standardized supervision model advocated by the pilot reform significantly reduces the degree of corporate tax avoidance, and this result has passed a series of robustness tests. Mechanism testing confirms that strengthening the pilot reform mainly aims to improve the information environment of enterprises and enhance internal governance, thereby suppressing corporate tax avoidance. Heterogeneity analysis finds that for enterprises with lower audit quality, higher business complexity, and regions with greater financial pressure, strengthening the pilot reform has a more significant inhibitory effect on corporate tax avoidance. The findings provide empirical evidence for strengthening the effectiveness of the pilot reform of financial and accounting supervision, and also has important implications for further improving and perfecting the financial and accounting supervision system in the new era to promote the healthy development of the real economy.