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This study examined whether the probability of a tax investigation by the general construction industry could reduce the entertainment expenses in order to confirm whether a tax investigation can reduce excessive discretionary expenses of firms. Among the general construction industry listed on the KOSPI and KOSDAQ from 2011 to 2018, 274 firms with sales exceeding 10 billion won in the previous year were targeted at the tax audit selection rate and the tax audit detection rate, which is a proxy for the possibility of a tax investigation. The effect of the ratio of entertainment expenses to sales and the increase rate of entertainment expenses was verified. As a result of the analysis, both the selection rate and the detection rate of the tax investigation have a significant negative effect on the proxy variable of the discretionary expenses measured as the proportion of entertainment expenses and the increase rate of entertainment expenses. The results of this study showed that the tax investigation is a means to curb the excessive expenditure of the firm's discretionary expenses, thus suggesting the direction for the taxation policy and the effectiveness of the tax investigation. [ABSTRACT FROM AUTHOR]