Corporate Governance and Book-Tax Differences: Tunisian Evidence

Dridi, Wiem; Boubaker, Adel

doi:10.5539/ijef.v8n1p171

Cited by 10 publications

(17 citation statements)

References 59 publications

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“…A possible explanation for this might be that corporate governance effectiveness reduces earnings management, so improves the financial information quality. In fact, Dridi and Boubaker () are confirmed a negative relationship between corporate governance and BTDs are confirmed for Tunisian firms. In this context, these results suggest that firms with better governance make more efforts for financial reporting in order to maintain their reliability in the market (Choi & Yang, ; Park et al, ).…”

Section: Resultsmentioning

confidence: 79%

“…We separate BTD into two components, normal and abnormal differences. Abnormal differences are more informative about managerial manipulations because it represents the part which is not explained by the differences between accounting and tax treatment (Dridi & Boubaker, ). In this study, we use factors related to differences in Tunisian tax and accounting rules to explain nondiscretionary differences.…”

Section: Methodsmentioning

confidence: 99%

“…There is a large volume of published studies describing the role of corporate governance in detecting earnings management and tax management. A weak governance structure may increase the opportunistic behavior and earnings management practices (Dridi & Boubaker, ). Recent evidence suggests that corporate governance influence information transparency (Girard & Rakotonjanahary, ; Li, ).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…Indeed, the first serious discussions and analyses of the relationship between corporate governance and tax management (Minnick & Noga, 2010). Recent evidence suggests that governance mechanisms have a negative effect on BTDs (Dridi & Boubaker, 2015). In the same vein, Piot and Janin (2007) and Souid and Stepniewski (2010) found in French companies that the presence of an audit committee on the board of directors hinders the manager in manipulating their results.…”

Section: The Effect Of Corporate Governance On the Relationship Betwementioning

confidence: 99%

See 3 more Smart Citations

Book‐Tax Differences, Corporate Governance Effectiveness and Audit Quality: An Interactive Effects

Riguen¹,

Kachouri²,

Jarboui³

2018

J Corp Accounting Finance

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In this article, we aim to answer the important questions of whether the corporate governance effectiveness affects the relationship between book‐tax differences (BTDs) and audit quality. We also aim to determine whether the variability between BTDs and audit quality is moderated by corporate governance index (CGI). The primary aim of the present study is to contribute to improving the existence of an interaction between BTDs, audit quality, and CGI. This study uses a sample of 28 nonfinancial listed Tunisian companies and covers an eight‐year period from 2005 to 2015. To test the hypotheses of this research, a generalized least squares (GLS) and ordinary least squares (OLS) regression was applied. The results obtained show that, for the Tunisian companies, a positive association between BTDs and audit quality. The current study also provides evidence that corporate governance moderates the relationship between BTDs and audit quality. The findings may be of interest to the academic researchers, practitioners and regulators who are interested in discovering the quality of corporate governance practices and tax practices in Tunisian context. The findings of this study can help Tunisian regulators in creating corporate governance disclosure requirements. The findings also provide the African business community insights concerning audit quality, tax practices, and corporate governance. This article extends the existing literature, by examining the inter‐relationship between corporate governance, BTDs, and audit quality. © 2019 Wiley Periodicals, Inc.

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Section: Resultsmentioning

confidence: 79%

Section: Methodsmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: The Effect Of Corporate Governance On the Relationship Betwementioning

confidence: 99%

See 2 more Smart Citations

Book‐Tax Differences, Corporate Governance Effectiveness and Audit Quality: An Interactive Effects

Riguen¹,

Kachouri²,

Jarboui³

2018

J Corp Accounting Finance

View full text Add to dashboard Cite

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“…Managerial ownership: Proportion of shares owned by directors/managers to total ordinary shares issued by the company, as employed by Beryl (2014) and Dridi W, Boubaker (2016).…”

Section: Independent Variablesmentioning

confidence: 99%

Ownership structure and tax planning of listed firms: Evidence from Nigeria

Tijjani¹,

Peter²

2020

J. Account. Taxation

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The study investigated the effect of ownership structure on tax planning of quoted non-financial companies in Nigeria. It aims to find out the ownership structure that improves tax planning thereby reducing tax liability of the firms. Data for the study were extracted from the annual reports and accounts of the companies for ten years (2008-2017). The data collected were analysed using descriptive statistics and multiple regressions. The study reveals that managerial and institutional ownerships have no significant positive effect on tax planning, while foreign ownership demonstrates no significant negative effect. Profitability measured using return on assets has a significant positive effect on tax planning of the sampled companies, and leverage shows a no significant negative effect. The findings imply that management-owned companies have fewer incentives to reduce tax, and there is a relationship in the attitude of management and institutional investors towards tax planning of the selected companies. In order to reduce the level of principal-agent conflicts, and to enhance tax planning and monitoring of management activities, the listed non-financial companies in Nigeria should encourage managerial shareholding.

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The interactive impact of tax avoidance and tax risk on the firm value: new evidence in the Tunisian context

Guedrib

Marouani

2023

ARA

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PurposeThe purpose of this study is to examine the interactive impact of tax avoidance and tax risk on the firm value.Design/methodology/approachThis study covers 290 observations on non-financial corporations listed on the Tunisian Stock Exchange for the period ranging from 2008 to 2020, using the multiple linear regression technique.FindingsThe results show that tax avoidance positively affects the firm value while tax risk has a negative influence on the company value. More importantly, tax risk moderates the positive impact of tax avoidance on the firm value. Accordingly, tax avoidance must be considered in conjunction with tax risk when studying the effect on the firm value. The findings of additional analyses indicate that when tax avoidance is associated with a high level of tax risk, it negatively affects the firm value. Thus, investors negatively rate the high-risk tax avoidance.Research limitations/implicationsThe major limitation of this study is that it focuses only on Tunisian listed companies since their financial statements are publicly available. Although the sample is relatively small due to the problem of data availability, it is satisfactory owing to the twelve-year sampling period (from 2008 to 2020). Research implications- The results obtained are of great interest to researchers as they should be more careful in simply using effective tax rates as a measure of risky or aggressive tax avoidance.Practical implicationsThe findings may signal the need for Tunisian firm managers to consider spillovers when adopting risky tax avoidance strategies and to implement a tax risk management policy within the firm. They are also substantial for Tunisian regulators to create requirements for reporting risky tax avoidance practices in the company annual reports to protect the investors’ rights and the society interest in general. The results are also useful for the investors who would like to make good decisions with respect to tax planning strategies. It is not enough to rely on the Effective Tax Rate (ETR) to judge whether or not tax planning is risky. Volatile ETRs, as a proxy of the tax risk, can be useful for them in decision-making.Social implicationsThe results also highlight that risky tax avoidance decreases the firm value, and thus confirm the negative repercussions that such behavior can have not only on the firm, but also on the society in general, as the corporate tax contributes to covering the State public expenditure. Hence, it is considered a general concern.Originality/valueThe present study differs from others in the existing literature. In fact, it examines the joint effect of tax avoidance and tax risk on the firm value for Tunisian listed companies which are characterized by the predominance of agency conflicts between major shareholders and minor ones. Therefore, the authors seek to investigate if small shareholders can penalize risky tax avoidance practices by decreasing the firm value.

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Corporate Governance and Book-Tax Differences: Tunisian Evidence

Cited by 10 publications

References 59 publications

Book‐Tax Differences, Corporate Governance Effectiveness and Audit Quality: An Interactive Effects

Book‐Tax Differences, Corporate Governance Effectiveness and Audit Quality: An Interactive Effects

Ownership structure and tax planning of listed firms: Evidence from Nigeria

The interactive impact of tax avoidance and tax risk on the firm value: new evidence in the Tunisian context

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