Does Managerial Ability and Corporate Governance Mitigate Tax Avoidance Activities When Environmental Uncertainty is Considered?

Ratu, Mutiara Kemala; Siregar, Sylvia Veronica

doi:10.2991/iconies-18.2019.66

Cited by 3 publications

(5 citation statements)

References 30 publications

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“…The results of this test support the results of research conducted by Ratu and Siregar, (2019), Seviana and Kristanto, (2020), and research by Syarendra and Kristanto, (2020) which states that environmental uncertainty has a significant positive effect on tax avoidance.…”

Section: Effect Of Environmental Uncertainty On Tax Avoidancesupporting

confidence: 85%

“…In addition, regarding the independent variable environmental uncertainty on tax avoidance, there have been previous studies conducted by Ratu and Siregar, (2019), Seviana and Kristanto, (2020), Syarendra and Kristanto, (2020) and Arieftiara, et al, (2020) which states the results of his research that environmental uncertainty has affect tax avoidance. Meanwhile, research conducted by Huang, et al, (2017) states that the results of the study show that environmental uncertainty has no effect on tax avoidance.…”

Section: Introductionmentioning

confidence: 96%

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The Effect of Environmental Uncertainty and Financial Distress on Tax Avoidance with Business Strategy as Moderating Variables

Nurdiana¹

2021

edv

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Tax avoidance is defined as one of the actions taken by taxpayers to reduce their tax burden legally. Tax avoidance is carried out by taking advantage of loopholes in the tax law that are not or have not been regulated, so that it is legal and does not violate the law. The purpose of this study is to analyze the effect of environmental uncertainty on tax avoidance, analyze the effect of financial distress on tax avoidance, analyze the moderating effect of business strategy on the effect of environmental uncertainty on tax avoidance and analyze the moderating effect of business strategy on the effect of financial distress on tax avoidance. This research method is a quantitative method using secondary data. The results of this study indicate that environmental uncertainty has a positive and significant effect on tax avoidance, financial distress has no effect on tax avoidance, business strategies moderate the effect of environmental uncertainty on tax, avoidance, and business strategies cannot moderate the effect of financial distress on tax avoidance.

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Section: Effect Of Environmental Uncertainty On Tax Avoidancesupporting

confidence: 85%

Section: Introductionmentioning

confidence: 96%

The Effect of Environmental Uncertainty and Financial Distress on Tax Avoidance with Business Strategy as Moderating Variables

Nurdiana¹

2021

edv

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“…A volatile environmental causes firms to be more careful in planning, including tax planning because taxes represent a significant expense for the firms and reduce shareholders' wealth. Ratu & Siregar (2018) found that firms that face high environmental uncertainty will increase tax avoidance activities. Firms with high environmental uncertainty will face a more risky situation so that firms will try to display the image of a low-risk by managing firms' cash flow by lowering firms' costs.…”

Section: Introductionmentioning

confidence: 99%

The Role of Managerial Ability in Indonesia: Investment Opportunity Sets, Environmental Uncertainty, Tax Avoidance

Laksono

Firmansyah

2020

HSSR

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Purpose of the study: This study aims to obtain empirical evidence of the effect of investment factors that consist of investment opportunity sets and environmental uncertainty on tax avoidance and the role of managerial ability in moderating these effects. Methodology: The analysis was conducted on 49 manufacturing companies listed on the Indonesia Stock Exchange from 2012 to 2018. It was chosen through a purposive sampling method, so 343 observations were obtained. This study engages two-panel data regression models, a model with and without moderation managerial ability. Also, this study employs factor analysis to produce investment opportunity sets that can represent this variable. Main Findings: This study reveals that investment opportunity sets and environmental uncertainty positively affect tax avoidance. Meanwhile, managerial ability failed to moderate the effect of investment opportunity sets and environmental uncertainty on tax avoidance. Implications: The results of the profiling can be used as an early warning, especially for account representatives and tax auditors at the Indonesia Tax Authority, so that potential tax exploration and examination can be more in-depth for firms that fulfill these characteristics. Also, this study provides advice to the Government of Indonesia to provide tax holidays for firms with high IOS who invest in the real sector and tax incentives for firms that are facing an environment with high uncertainty. Novelty: This study deploys managerial ability as a moderating variable between the relationship of investment opportunity sets and environmental uncertainty to tax avoidance. The managerial ability has an important role in firms' IOS and environmental uncertainty faced by the firms because the level of managers will produce differences in the economic outcomes and the effectiveness of the discretion.

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“…It means that high-ability managers can employ an optimum level of tax avoidance strategies. The papers such as Park et al (2016), Baik et al (2018), Gul et al (2018), Khurana et al (2018), Ratu and Siregar (2019), Lee and Yoon (2020), Salehi et al (2020b), also find an ameliorating role for managerial ability in mitigating negative factors on firm value…”

Section: Discussionmentioning

confidence: 97%

“…Moreover, managerial ability does not affect the association between product market competition and investment decisions. Ratu and Siregar (2019) show significant positive evidence of the effect of environmental uncertainty on tax avoidance. Gul et al (2018) showed a significant association between firm acquisition decisions and corporate tax avoidance.…”

Section: Theoretical Frameworkmentioning

confidence: 94%

The Effectiveness of Management Ability on Firm Value and Tax Avoidance

Seifzadeh

2022

JRFM

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The current study investigates the relationship between tax avoidance, management ability, and firm value. Three hypotheses are proposed to meet the paper’s objective. For conducting such a practical study based on a post-event descriptive correlational approach, data are gathered from the website of the Tehran Stock Exchange during 2014–2020. A total of 183 companies were selected through the systematic elimination method and analyzed using the R statistical software. The results indicated a negative relationship between managerial ability and tax avoidance. Moreover, we find a significant negative relationship between tax avoidance and firm value. Finally, the findings argue that in companies with high-ability managers, the intensity of the negative relationship between tax avoidance and firm value is mitigated.

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Does Managerial Ability and Corporate Governance Mitigate Tax Avoidance Activities When Environmental Uncertainty is Considered?

Cited by 3 publications

References 30 publications

The Effect of Environmental Uncertainty and Financial Distress on Tax Avoidance with Business Strategy as Moderating Variables

The Effect of Environmental Uncertainty and Financial Distress on Tax Avoidance with Business Strategy as Moderating Variables

The Role of Managerial Ability in Indonesia: Investment Opportunity Sets, Environmental Uncertainty, Tax Avoidance

The Effectiveness of Management Ability on Firm Value and Tax Avoidance

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