Does Investors Respond to Tax Avoidance and Tax Risk?  Stewardship Perspective

PurposeThis study aims to examine the impact of founder or descendant chief executive officers (CEOs) on the relationship between tax avoidance and firms' future risk. This issue is important because of an ongoing debate about founder and descendant CEOs' impacts, contributions and implications for firms.Design/methodology/approachThis study uses a sample of publicly listed nonfinancial Indonesian firms in 2012–2019, most of which are family firms and adhere to a two-tier governance system that was understudied in previous studies. The authors use panel-random effect data regression for the statistical analysis.FindingsThe results demonstrate that founder or descendant CEOs do not affect the positive relationship between tax avoidance and firms' future risks.Research limitations/implicationsThis research supports the upper-echelon theory, arguing that top management teams affect firms' strategic policies and outcomes.Practical implicationsCEOs play weaker roles in countries with a two-tier governance system than in a one-tier one. Additionally, in relation to Hofstede's cultural dimensions, Indonesia has collective and feminist characteristics that emphasize elements of togetherness and group so that firms reflect the firms' top management teams and not only CEOs.Originality/valueThis research fills a research gap on the role of founder and descendant CEOs in the relationship between tax avoidance and firms' future risks by analyzing firms in Indonesia, a country with a two-tier governance system and collective and feminine cultural characteristics.

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“…Drake et al . (2019) and Widodo and Firmansyah (2021) demonstrate that investors react positively to tax avoidance. Cao et al .…”

Section: Literature Review and Hypothesesmentioning

confidence: 98%

“…Likewise, tax avoidance seeks to reduce tax payment-related cash outflows that might increase future cash flows. Drake et al (2019) and Widodo and Firmansyah (2021) demonstrate that investors react positively to tax avoidance. Cao et al (2021) analyze a sample of Chinese firms and document that tax avoidance reduces firms' future risk.…”

Section: Introductionmentioning

confidence: 99%

Founder or descendant CEOs, tax avoidance and firms' future risks: the Indonesian evidence

Sutrisno

Utama

Hermawan

et al. 2023

JFBM

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“…Yohana dkk (2022) dalam studinya terhadap perusahaan go public industry non-keungan selama tahun pengamatan 2017-2019 mengungkapkan bahwa transfer pricing dan customer concentration berpengaruh terhadap tax avoidance. Penghindaran pajak memiliki pengaruh positif terhadap nilai Perusahaan, tetapi risiko pajak memiliki pengaruh negative terhadap nilai Perusahaan (Firmansyah & Widodo, 2021;Firmansyah dkk, 2022;Arfiansyah, 2021). Kondisi tersebut disebabkan tax avoidance mampu menyelaraskan kepentingan shareholder, sedangkan tax risk dapat terjadi diluar kendali manajer.…”

Section: Pendahuluanunclassified

Tax Avoidance dan Tax Risk: Peran Moderasi dari Corporate Governance

Sihono

Febyansyah

2023

RABIN

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Latar Belakang: Tax avoidance dianggap sebagai masalah utama, mengingat kompleksitas dan konsekuensi ekonominya. Tax avoidance yang dilakukan oleh wajib pajak, termasuk didalamnya Perusahaan, akan menyebabkan negara mengalami kerugian, karena pajak adalah sumber pendapatan negara, yang akan digunakan sebagai sumber pembiayaan atas pengeluaran negara. Jika banyak Perusahaan melakukan tax avoidance maka pendapatan negara yang bersumber dari pajak akan terpengaruh. Selain itu, tax avoidance mengakibatkan efek buruk terhadap reputasi suatu Perusahaan.Tujuan: Studi ini bertujuan mengisi kesenjangan yang ada dengan menguji pengaruh tax avoidance terhadap tax risk serta melakukan analisis dampak penerapan corporate governance pada pengaruh tax avoidance terhadap tax risk.Metode Penelitian: Data sekunder digunakan dalam penelitian ini yang diperoleh dari laporan keuangan Perusahaan yang bergerak dalam industry manufaktur yang terdafat di Bursa Efek Indonesia dari tahun 2016 sampai 2020. Analisis data yang digunakan adalah Moderating Regression Analysis.Hasil Penelitian: Hasil studi ini menunjukkan bahwa volatilitas dari effective tax rate dan effective tax rate memiliki pengaruh negatif dan signifikan. Studi ini memberikan bukti bahwa tax risk menurun ketika tingkat tax avoidance Perusahaan menurun, dan sebaliknya. Selain itu, kami menemukan bahwa semakin baik struktur corporate governance Perusahaan, semakin tinggi tingkat pengawasan dan pengendaliannya manajer, sehingga mengurangi dampak tax avoidance pada tax risk Perusahaan di masa depan. Temuan dari studi tentang tax avoidance dan corporate governance perusahaan ini penting bagi investor karena pajak merupakan risiko yang secara signifikan dapat mempengaruhi kesejahteraan investor.Keterbatasan Penelitian: Studi ini memiliki keterbatasan, diantaranya hanya berfokus pada industry manufaktur. Selain itu, studi ini hanya mempertimbangkan audit quality, komisaris independen serta komite audit sebagai pengukuran variabel corporate governance.Keaslian/Novetly Penelitian: Penelitian mengenai tax avoidance dan tax risk telah dilakukan, namun demikian terdapat inkonsistensi hasil penelitian-penelitian tersebut, oleh karena itu peneliti akan melakukan pengujian kembali terhadap variabel tersebut dalam kontek di Indonesia, yang diharapkan akan memberikan bukti baru apakah mendukung atau bertentangan dengan penelitian sebelumnya. Mengacu pada penelitian Choi dan Park (2022), pengukuran corporate governance yang digunakan adalah struktur komisaris independen, audit quality dan komite audit yang sebelumnya belum digunakan dan merupakan saran dari peneliti sebelumnya.

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“…The prevention and control of financial risks in the BD environment is different from conventional risks. It is required to build a closed-loop management process of "pre-warning, real-time monitoring in the event, and post response supervision" [5][6]. The enterprise financial risk management and control framework based on the BD platform is shown in Figure 1.…”

Section: Financial Risk Control Framework Based On Bd Platformmentioning

confidence: 99%

Investigation on Tax Planning and Risk Prevention Based on Financial Big Data

2023

ferm

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In today's increasingly perfect market economy system and constantly improving national economic development level in China, enterprises are facing more and more challenges and challenges. Tax expenses are also a major expense of a company. Without violating tax regulations, reducing the company's tax burden through tax planning can greatly help enhance the company's core competitiveness. At the same time, after the reform of business tax to value-added tax, there have been many positive changes in tax planning for enterprises, which have played a guiding role in adjusting their investment and financing decisions. In order to explore the application of Big Data (BD) technology in enterprise tax risk prevention and control, enrich the existing research theory of BD risk control, and bring inspiration and reference to other enterprises that are building BD risk control, this paper selected Z Company, a group company that started earlier and had the characteristics of BD risk control platform construction, to conduct an example analysis of Z Company's application in BD financial risk control. Taking Company A, a subsidiary of Company Z, as the research object, through experiments, it was found that the highest number of serious risks in Company A reached 38, while the maximum number of general risks was 115. Therefore, in the context of financial BD, tax financing and risk prevention and control were very necessary.

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Does Investors Respond to Tax Avoidance and Tax Risk? Stewardship Perspective

Cited by 10 publications

References 32 publications

Founder or descendant CEOs, tax avoidance and firms' future risks: the Indonesian evidence

Founder or descendant CEOs, tax avoidance and firms' future risks: the Indonesian evidence

Tax Avoidance dan Tax Risk: Peran Moderasi dari Corporate Governance

Investigation on Tax Planning and Risk Prevention Based on Financial Big Data

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