Willingness of Tax Amnesty Participation Based on Financial Audit Quality

Abstract

Tax amnesty is an Indonesian government program which company may reveal its hidden asset. By paying redemption money, the taxpayer can reveal its hidden asset without getting the typical administrative sanction of taxation. It turned out that many companies hiding its asset participated in this program. That condition raises the question regarding audit quality of the financial statement of those companies. Audit quality is proxied by the accounting firm's reputation, industry specialization, and tenure. The research shows that the accounting firm's reputation had a significant negative impact on participation in the tax amnesty program in 2016, 2017, or both, and the amount of restatement regarding tax amnesty program. BIG-4 accounting firms are associated with better audit quality. Consequently, the company which audited by BIG-4 are less likely to participate in tax amnesty. In addition, leverage as control variable had a significant negative impact on participation in the tax amnesty program.

Deferred Tax On Real Profit Management With Tax Planning As Moderating

“…The main purpose of the audit of financial statements is to identify errors and irregularities in the financial statements that will have a material impact. Financial statement audits can also reduce the information asymmetry that exists between manager and stakeholders (Widyasari et al, 2018). Based on the previous discussion, the ninth hypothesis in this study is: H9: Tax planning moderates the relationship between tax amnesty and real earnings management.…”