The dual role of auditor-provided tax services (ATS) in SMEs tax planning

Hussin, Siti Nor Adawiah; Noor, Rohaya Md

doi:10.1109/chuser.2012.6504338

Cited by 3 publications

(1 citation statement)

References 13 publications

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“…The result is contradicted for companies which do not engaging auditor in the tax planning strategies (Chyz, Naiker, Gal-Or, & Sharma, 2017;Donohoe & Knechel, 2014). The result is consistent with studies done in German, Tehran and Malaysia where they found a negative relationship which indicated that the higher the NAS fee the lower the companies' ETR (Burggrael, Wtrin, & Wei, 2017;Hussin & Noor, 2012;Saremi, Mohammadi, & Nezhad, 2016) showing aggressive tax planning strategies has been implemented. Previous studies reveal that auditors who provide NAS i.e.…”

Section: Non-audit Services Fee As Moderatormentioning

confidence: 54%

The Moderating Effect of Non-audit Services Fee on Aggressive Tax Planning: Empirical Evidence From Malaysian Listed Companies

Jaffar¹,

Derashid²,

Taha³

2021

IJFR

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The purpose of this study is to examine the moderating effect of non-audit services fees on the relationship between size, profitability, leverage, capital intensity, inventory intensity, financial distress and ethnicity with aggressive tax planning. This study uses a sample from companies listed on the Malaysian (Access, Certainty, Efficiency (ACE) Market from 2014 to 2018, comprising of 105 firm year-observations. The finding shows that the non-audit services fee moderate the relationship between size, profitability, leverage, inventory intensity, financial distress and ethnicity with aggressive tax planning except for capital intensity. It is hoped that the finding can assist readers in understanding the nature of companies listed on the ACE Market, particularly their behaviour towards tax planning. This study contributes to knowledge in the areas of financial accounting and taxation specifically on aggressive tax planning, by introducing the moderating variable of non-audit services fee. The uniqueness of the use of companies listed on the Malaysian ACE market will provide new avenue on the discussion on an aggressive tax planning issue, which usually more focus on big firms. The framework used in the present study could serve as a basis for research in other developing countries or regions.

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Section: Non-audit Services Fee As Moderatormentioning

confidence: 54%

The Moderating Effect of Non-audit Services Fee on Aggressive Tax Planning: Empirical Evidence From Malaysian Listed Companies

Jaffar¹,

Derashid²,

Taha³

2021

IJFR

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The Governance of Accounting Rules and Tax Rules: Analysis of SMEs' Tax Avoidance Strategies

Hariyanti

Normah

et al. 2013

Global J. Bus. Soc. Sci. Review

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Objective- This study examined the governance of accounting rules and tax rules on the level of tax burdens paid by SMEs in Malaysia. According to the tax gap theory, taxpayers utilize the different rules between accounting and tax which is known as the dual reporting system in their tax avoidance strategies in order to pay lower taxes. The tax gap is the difference between the statutory tax rate (STR) and effective tax rates (ETRs). Methodology/Technique - This study analysed financial statements of 148 SMEs (740 firm-years) prepared for the years 2008 to 2012. Findings The statistical results revealed that the dual reporting system had caused a significant gap between the STR (the tax rate that SMEs supposed to pay) and ETRs (the actual tax rates paid by SMEs) in the Malaysia tax system. In addition, the findings provided evidence of the tax avoidance strategies utilised by SMEs which cause lower ETRs as follows: exempt income and tax incentives, disallowable expenses, absorbed losses and capital allowances, deferred tax expenses, size and leverage. Thus, the findings confirmed the tax gap theory in the SMEs tax system which implied a loss of tax revenue to the government due to tax avoidance activities. Findings The findings had provided useful feedbacks to the policymakers such as accounting bodies and the relevant tax authorities to address the issue and realign the two systems which are accounting standards and tax system to minimize the gap. Type of Paper Empirical paper Keywords: , Dual Reporting System; ETRs; SMEs; STR; Tax Gap

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Company Characteristics, Non-Audit Services Fee and Aggressive Tax Planning: A Conceptual Framework

Jaffar¹,

Derashid²,

Taha³

2021

IJARBSS

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The dual role of auditor-provided tax services (ATS) in SMEs tax planning

Cited by 3 publications

References 13 publications

The Moderating Effect of Non-audit Services Fee on Aggressive Tax Planning: Empirical Evidence From Malaysian Listed Companies

The Moderating Effect of Non-audit Services Fee on Aggressive Tax Planning: Empirical Evidence From Malaysian Listed Companies

The Governance of Accounting Rules and Tax Rules: Analysis of SMEs' Tax Avoidance Strategies

Company Characteristics, Non-Audit Services Fee and Aggressive Tax Planning: A Conceptual Framework

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