Are CEO Overconfidence and Audit Firm Size Related To Tax Avoidance?

Abstract

Objective – This study aims to examine whether audit firm size mitigates the relationship between CEO overconfidence and tax avoidance. CEO overconfidence has the characteristics of a very high level of self-confidence which influences the pattern of thought and the way they make strategic decisions. CEO overconfidence has a tendency to avoid taxes. It aims to show competence in tax management and raise funds for investment. External party oversight, such as by audit firms, will mitigate the relationship between CEO overconfidence and tax avoidance through an attitude of independence, as well as competence and function as examiners of the company's financial reporting. Methodology/Technique – This study uses a sample of Indonesian non-financial companies in the period 2013-2017. This study analyses the data with statistical methods using linear multiple regression. Findings – The results of this study indicate that CEO overconfidence is positively related to tax avoidance, while audit firm size is negatively related to tax avoidance. However, this study has not been able to prove the influence of audit firm size on the relationship between CEO overconfidence and tax avoidance. Type of Paper: Empirical Keywords: CEO overconfidence; Tax Avoidance; Audit Firm Size; Big 4; Book Tax Difference. Reference to this paper should be made as follows: Sutrisno, P; Pirzada, K. 2020. Are CEO Overconfidence and Audit Firm Size Related To Tax Avoidance?, Acc. Fin. Review 5(2): 72 – 81. https://doi.org/10.35609/afr.2020.5.2(3) JEL Classification: M41, M49.

Board of Director Characteristics, Institutional Ownership, and Accounting Conservatism

“…Reducing the company's residual value by the median residual value of the industry for the year. If the company residual value is greater than the industry median value, code 1, and vice versa, is coded 0 (Habib & Hossain, 2013;Kouaib & Jarboui, 2016;Sutrisno, 2020;Sutrisno & Karmudiandri, 2020). 2. Financing decisions are measured using the debt to equity ratio, total liabilities divided by total equity (Wei et al, 2011).…”

“…2. Financing decisions are measured using the debt to equity ratio, total liabilities divided by total equity (Wei et al, 2011). If the company's debt to equity ratio is higher than the industry median value, it is given code 1, and vice versa is coded 0 (Kouaib & Jarboui, 2016;Sutrisno, 2020;Sutrisno & Karmudiandri, 2020). 3. Dividend decisions are measured using the dividend yield ratio.…”

“…A board director is said to have an overconfidence attitude (code 1) if two of the three criteria have code one. On the other hand, a board director with only one criterion is not overconfident (code 0) (Kouaib & Jarboui, 2016;Sutrisno, 2020;Sutrisno & Karmudiandri, 2020).…”

دراسة وإختبار أثر مشارکة الإناث بمجالس إدارات الشرکات المقیدة بالبورصة المصریة علی العلاقة بین القدرة الإداریة والثقة المفرطة للمدیر التنفیذی وممارسات التجنب الضریبی

“…Dyreng et al, 2010) ‫ث‬ ‫ضر‬ ‫إل‬ ‫ظر‬ ‫د‬ ‫ة‬ ‫دار‬ ‫ا‬ ‫أق‬ ‫م‬ ‫تدم‬ ‫ي‬ ‫ل‬ ‫ت‬ ‫ب‬ ‫ت‬ ‫ف‬ ‫كو‬ ‫ترك‬ ‫الش‬ ‫م‬ ‫بة‬ ‫ف‬ ‫أ‬ ‫م‬ ‫الدخم‬ ‫ب‬ ‫ثب‬ ‫تر‬ ‫ت‬ ‫ت‬ ‫الض‬ ‫تي‬ ‫ت‬ ‫ت‬ ‫الدخط‬ ‫ت‬ ‫ت‬ ‫ت‬ ‫إل‬ ‫تأ‬ ‫ت‬ ‫ت‬ ‫دمج‬ ‫ت‬ ‫ت‬ ‫ت‬ ‫فف‬ ‫تذا‬ ‫ت‬ ‫ت‬ ‫ل‬ ‫ف‬ ‫ت‬ ‫ت‬ ‫ت‬ ‫الدول‬ ‫لم‬ ‫ت‬ ‫ت‬ ‫ت‬ ‫لص‬ ‫ترك‬ ‫ت‬ ‫ت‬ ‫الش‬ ‫ت‬ ‫ت‬ ‫ت‬ ‫ف‬ ‫دح‬ ‫ت‬ ‫ت‬ ‫ت‬ ‫الد‬ ‫ادات‬ ‫تر‬ ‫ت‬ ‫ت‬ ‫ي‬ ‫ا‬ ‫تق‬ ‫ت‬ ‫ت‬ ‫ف‬ ‫ط‬ ‫تد‬ ‫ت‬ ‫ت‬ ‫إس‬ ‫ق‬ ‫ت‬ ‫ت‬ ‫ك‬ ‫ا‬ ‫تدر‬ ‫ت‬ ‫ت‬ ‫ت‬ ‫الدول‬ ‫ت‬ ‫ت‬ ‫إل‬ ‫ثبي‬ ‫تر‬ ‫ت‬ ‫الض‬ ‫دف‬ ‫تدفو‬ ‫ت‬ ‫تم‬ ‫ت‬ ‫مي‬ ‫د‬ ‫ت‬ ‫ت‬ ‫خ‬ ‫تق‬ ‫ت‬ ‫ثبي‬ ‫تر‬ ‫ت‬ ‫ض‬ ‫ات‬ ‫تور‬ ‫ت‬ ‫وف‬ ‫تد‬ ‫ت‬ ‫ي‬ ‫لدح‬ ، ‫تد‬ ‫ت‬ ‫بف‬ ‫تك‬ ‫ت‬ ‫وذل‬ ‫ت‬ ‫خرض‬ ‫ثبي‬ ‫تر‬ ‫ض‬ ‫يدالت‬ ‫ب‬ ‫االحدر‬ ‫ترك‬ ‫لمش‬ ‫ت‬ ‫وجب‬ ‫ت‬ ‫دي‬ ‫ت‬ ‫تدف‬ ‫د‬ ‫تد‬ ‫ي‬ ‫ودح‬ ‫تم‬ ‫الطوث‬ ‫تد‬ ‫ال‬ ‫ت‬ ‫م‬ ‫ة‬ ‫ر‬ ‫تد‬ ‫س‬ ‫و‬ ‫بمي‬ ‫تد‬ ‫س‬ ‫ال‬ ‫تو‬ ‫ال‬ ‫ترص‬ ‫ف‬ ‫ت‬ ‫ف‬ ‫لف‬ ‫تد‬ ‫إس‬ ‫تق‬ ‫ك‬ ‫ي‬ ، ‫ثب‬ ‫تر‬ ‫الض‬ ‫تي‬ ‫دخط‬ ‫تط‬ ‫ش‬ ‫أ‬ ‫ت‬ ‫ف‬ ‫تي‬ ‫ر‬ ‫إ‬ ‫تدم‬ ‫ي‬ ‫الر‬ ‫دو‬ ‫تم‬ ‫ك‬ ‫أق‬ ‫تث‬ ‫حي‬ . ‫الشرك‬ ‫م‬ ‫ثبي‬ ‫الضر‬ ‫ت‬ ‫ا‬ ‫لدز‬ ‫ا‬ ‫ف‬ ‫ات‬ ‫الر‬ ‫دو‬ ‫ي‬ ‫أر‬ ‫دخريض‬ ‫بمي‬ ‫ي‬ ‫اال‬ ‫و‬ ‫ترك‬ ‫لمش‬ ‫ثبي‬ ‫تر‬ ‫الض‬ ‫ت‬ ‫س‬ ‫السي‬ ‫تد‬ ‫دحدي‬ ‫ار‬ ‫تر‬ ‫تر‬ ‫وييدب‬ ‫تم‬ ‫ت‬ ‫أ‬ ‫تق‬ ‫ثب‬ ‫تر‬ ‫الض‬ ‫تي‬ ‫الدخط‬ ‫ت‬ ‫ت‬ ‫رس‬ ‫تيق‬ ‫ب‬ ‫ر‬ ‫ت‬ ‫ت‬ ‫خدي‬ ‫ثق‬ ‫تدير‬ ‫لم‬ ‫تدة‬ ‫ي‬ ‫ال‬ ‫و‬ ‫اديجي‬ ‫تدر‬ ‫س‬ ‫ا‬ ‫ات‬ ‫ار‬ ‫تر‬ ‫ال‬ ، ‫تق‬ ‫ت‬ ‫ك‬ ‫ي‬ ‫ال‬ ‫الر‬ ‫دو‬ ‫تو‬ ‫ت‬ ‫دفو‬ ‫ال‬ ‫ايب‬ ‫تر‬ ‫الض‬ ‫تق‬ ‫الر‬ ‫دو‬ ‫تم‬ ‫ت‬ ‫ك‬ ‫ألق‬ ‫ا‬ ً ‫تر‬ ‫ظ‬ ( ‫ترك‬ ‫الش‬ ‫تم‬ ‫داخ‬ ‫ر‬ ‫تدث‬ ‫اس‬ ‫دة‬ ‫إ‬ Park et al (2016 ، ‫ت‬ ‫ف‬ ‫تدخم‬ ‫ال‬ ‫ثب‬ ‫تر‬ ‫ض‬ ‫تد‬ ‫ي‬ ‫ع‬ ‫ت‬ ‫در‬ ‫ار‬ ‫تم‬ ‫ظ‬ ‫ت‬ ‫ف‬ ‫ت‬ ‫ص‬ ‫خ‬ ‫تدف‬ ‫ت‬ ‫اوح‬ ‫تر‬ ‫ت‬ ‫دد‬ ‫تث‬ ‫ت‬ ‫حي‬ ‫ف‬ ‫تدو‬ ‫ت‬ ‫ال‬ ‫تق‬ ‫ت‬ ‫تد‬ ‫ت‬ ‫اليدي‬ ‫تق‬ ‫ت‬ ‫تدخم‬ ‫ت‬ ‫ال‬ ‫ثب‬ ‫تر‬ ‫ت‬ ‫ض‬ ‫ت‬ ‫و‬ 81 ‫تا‬ ‫ت‬ ‫إل‬ : 11 ‫ثب‬ ‫تر‬ ‫ت‬ ‫الض‬ ‫تم‬ ‫ت‬ ‫ب‬ ‫تدخم‬ ‫ت‬ ‫ال‬ ‫تق‬ ‫ت‬ : ‫الدو‬ ‫يظم‬ ‫ل‬ Dyreng et al (2010) ‫ت‬ ‫الد‬ ‫و‬ ‫ي‬ ‫و‬ ‫ال‬ ‫ت‬ ‫رس‬ ‫ال‬ ‫ذ‬ ‫م‬ ‫أ‬ ‫أحد‬ ‫ثب‬ ‫الضر‬ ‫ب‬ ‫الدج‬ ‫وييد‬ ‫ر‬ ‫ت‬ ‫اخدي‬ ‫خ‬ ‫ق‬ ‫وذلك‬ ‫ثب‬ ‫الضر‬ ‫سداد‬ ‫دأجيم‬ ‫أو‬ ، ‫الشرك‬ ‫م‬ ‫ثبي‬ ‫الضر‬ ‫ة‬ ‫ب‬ ‫األ‬ ‫لدخريض‬ ‫ف‬ ‫اسدخدا‬ ‫يدم‬ ‫ت‬ ‫ت‬ ‫ت‬ ‫س‬ ‫السي‬ ‫أو‬ ‫ت‬ ‫ت‬ ‫ت‬ ‫لج‬ ‫ي‬ ‫ال‬ ‫ات‬ ‫و‬ ‫ت‬ ‫ت‬ ‫الس‬ ‫تيق‬ ‫ت‬ ‫ب‬ ‫ير‬ ‫ت‬ ‫ت‬ ‫الخس‬ ‫و‬ ‫ح‬ ‫ت‬ ‫ت‬ ‫األر‬ ‫تم‬ ‫ت‬ ‫تا‬ ‫ت‬ ‫م‬ ‫د‬ ‫ت‬ ‫ت‬ ‫دس‬ ‫ت‬ ‫ت‬ ‫الد‬ ‫ت‬ ‫ت‬ ‫ت‬ ‫لي‬ ‫ا‬ ‫أو‬ ، ‫تبي‬ ‫ت‬ ‫س‬ ‫ح‬ ‫ال‬ ‫ثب‬ ‫تر‬ ‫الض‬ ‫ة‬ ‫ت‬ ‫ر‬ ‫ا‬ ‫ة‬ ‫تر‬ ‫فد‬ ‫تق‬ ‫دة‬ ‫تدر‬ ‫االس‬ ‫أو‬ ‫ثب‬ ‫تر‬ ‫الض‬ ‫تم‬ ‫دأجي‬ ‫أو‬ ، ‫ثبي‬ ‫تر‬ ‫الض‬(Sutrisno and Pirzada, 2020;Chyz et al, 2019;Koester et al, 2017) ‫ترغم‬ ‫ت‬ ‫ال‬ ‫ت‬ ‫م‬ ‫تي‬ ‫مي‬ ‫تد‬ ‫در‬ ‫تد‬ ‫وح‬ ‫ت‬ ‫ث‬ ‫دير‬ ‫ت‬ ‫لف‬ ‫تد‬ ‫اليوج‬ ‫ت‬ ‫الد‬ ‫ت‬ ‫الجدلي‬ ‫يم‬ ‫ت‬ ‫ر‬ ‫ال‬ ‫تق‬ ‫ثب‬ ‫تر‬ ‫الض‬ ‫تب‬ ‫الدج‬ ‫تر‬ ‫وييدب‬ ‫ب‬ ‫ت‬ ‫الس‬ ‫ت‬ ‫ت‬ ‫اس‬ ‫لمدر‬ ‫ت‬ ‫ددب‬ ‫ال‬ ‫تد‬ ‫يج‬ ‫تث‬ ‫حي‬ ‫ف‬ ‫ت‬ ‫اس‬ ‫و‬ ‫ت‬ ‫ط‬ ‫ت‬ ‫م‬ ‫ر‬ ‫ت‬ ‫دش‬ ‫إ‬ ‫تق‬(Kovermann and Velte, 2019;Koester et al, 2017;Park et al, 2016) ‫يم‬ ‫ت‬ ‫ر‬ ‫تدة‬ ‫بيق‬ ً ‫ا‬ ‫كبير‬ ً ‫خمط‬ ‫ك‬ ‫أق‬ ‫تم‬ ‫ث‬ ‫تث‬ ‫حي‬ ‫ق‬ ‫ددرد‬ ‫د‬ ‫الد‬ ‫و‬ ‫ثب‬ ‫الضر‬ ‫الدفرب‬ ‫و‬ ‫الديسر‬ ‫و‬ ‫الري‬ ‫يي‬ ‫و‬ ‫ب‬ ‫ثبا‬ ‫الضر‬ ‫ب‬ ‫الدج‬ ‫و‬ ‫ثبا‬ ‫الضر‬ ‫الدخطي‬ ( ‫ت‬ ‫ي‬ ‫االخ‬ ‫و‬ ‫ت‬ ‫ي‬ ‫و‬ ‫ال‬ ‫ي‬ ‫ترو‬ ‫ش‬ ‫ال‬ ‫تث‬ ‫حي‬ ‫تق‬ ‫ت‬ ‫دخدم‬ ‫ت‬ ‫ف‬ ‫ولك‬ ‫ثبي‬ ‫تر‬ ‫الض‬ ‫ت‬ ‫ا‬ ‫لدز‬ ‫ا‬ ‫دخريض‬ ‫و‬ ‫و‬ ‫الفد‬ 8 ، ‫ك‬ ‫ت‬ ‫أق‬ ‫تق‬ ‫ترغم‬ ‫ال‬ ‫م‬ ، ‫ادف‬ ‫در‬ ‫ت‬ ‫صطمح‬ ‫ك‬ ‫يم‬ ‫ر‬ ‫ال‬ ‫دمك‬ ‫سدخدام‬ ‫ب‬ ‫ت‬ ‫اس‬ ‫الدر‬ ‫بيض‬ ‫م‬ ‫ي‬ ‫يرسر‬ ‫و‬ ‫و‬ . ‫ب‬ ‫ت‬ ‫الس‬ ‫يم‬ ‫ت‬ ‫ر‬ ‫ال‬ ‫تق‬ ‫توم‬ ‫رف‬ ‫تم‬ ‫ك‬ ‫تيق‬ ‫ب‬ ‫ة‬ ‫تز‬ ‫ي‬ ‫و‬ ‫صم‬ ‫ف‬ ً ‫خطوط‬ ‫تودة‬ ‫ف‬ ( 8181 ‫تو‬ ‫ثب‬ ‫تر‬ ‫الض‬ ‫تي‬ ‫الدخط‬ ‫تد‬ ‫ويي‬ ‫الد...…”