Does Corporate Governance Moderate the Effect of Earnings Management on Tax Aggressiveness

Abstract

Taxes are important for a State and company. Both have a common interest in taxes. For the State tax is a source of State income, so there is an effort to maximize tax revenue. For the company, the tax is a net income deduction. Therefore, companies frequently use earnings management to control the reporting of income that affects the tax payable. Previous research suggests that there is a relationship between aggressive financial reporting and tax reporting aggressiveness. This study aims to expand the results of previous research by reexamining the effect of earnings management on tax aggressiveness with corporate governance as a moderating variable. We use Modified-Jones Model accruals to measure earnings management, Book Tax Different (BTD) to measure tax aggressiveness, and Principal Component Analysis (PCA) to identify major dimensions of corporate governance. The results show that corporate governance is quasi moderation which means Corporate Governance is able to moderate earnings management relationship and tax aggressiveness which also become independent variable

Pengaruh Manajemen Laba Terhadap Agresivitas Pajak

“…Menurut Kamila (2014), yang mengukur agresivitas pelaporan keuangan melalui manajemen laba, mengatakan bahwa perilaku manajemen laba mempengaruhi tindakan agresivitas pajak, begitu juga sebaliknya pajak menjadi salah satu yang diatur nilainya dalam manajemen laba agar menghasilkan laba tinggi. Penelitian ini didukung oleh Prastiwi (2018) yang menyatakan bahwa terdapat pengaruh perilaku manajemen laba terhadap agresivitas pajak dan sebaliknya. Wang et al (2019) menyatakan bahwa manajemen laba akrual dapat mendorong agresivitas pajak karena keputusan perusahaan untuk melakukan pengelolaan pendapatan dapat meningkatkan beban pajak, sehingga perusahaan akan berusaha mengurangi beban pajak dengan melakukan tindakan penghindaran pajak yang agresif.…”

Mekanisme Corporate Governance dan Aktivitas Penghindaran Pajak Perusahaan

“…= 4. Komite Audit Ukuran komite audit dapat diukur dengan menggunakan jumlah anggota komite audit secara keseluruhan dalam perusahaan (Prastiwi, 2017), sehingga pengukuran komite audit dapat dihitung dengan sebagai berikut.…”

Corporate Governance and Tax Avoidance: Evidence from Nigerian Quoted Food and Beverage Companies

“…The results showed that board independence had a significant negative effect on tax avoidance; while, CEO duality had a negative insignificant effect on tax avoidance. [58], conducted a study whether corporate governance affect earnings management on tax aggressiveness?' The study employed secondary data from annual report and accounts from the official website of the companies and the IDX website.…”