Pengaruh Financial Distress, Real Earnings Management Dan Corporate Governance Terhadap Tax Aggressiveness

Abstract

This study is aimed to examine the effect of financial distress, real earnings management, and corporate governanceon tax aggressiveness. Using samples from manufacturing companies listed on the Indonesia Stock Exchange in the period 2011 to 2015, the data will be examined with fixed effect approach method. The results of this study indicate that financial distress does not affect on tax aggressiveness. While from real earnings management variables, only through manipulation of sales as which affects positive significantly on tax aggressiveness. On the contrary, manipulation of the production and manipulation of discretionary expenses precisely give the opposite effect. In addition, corporate governance consists of the audit committee and the percentage of institutional ownership can reduce tax aggressiveness, meanwhile the third measure (the percentage of independent commissioners) shows the opposite result..

The Effect of Corporate Governance Mechanism on Tax Aggressiveness With Earnings Management as Intervening Variable

“…Companies with higher institutional ownership tend to lower tax aggressiveness than companies with low institutional ownership (Badertscher et al, 2009). The results of this study are consistent with the research of Nugroho & Firmansyah (2017), Hanna & Haryanto (2016), Cahyono et al, (2016), Fadli (2016), Embree (2012), Khurana & Moser (2009) that found an effect of institutional ownership on tax aggressiveness.…”

“…the management tends to manipulate profit in order to avoid government regulation, one of which is to avoid corporate income tax. The results of this study are consistent with Nugroho & Firmansyah (2017), Prawira (2017), Wulansari (2015), Pranoto & Widagdo (2015), Fadli (2013), Suyanto & Supramono (2012) which shows that earnings management has an effect on tax aggressiveness.…”

“…Based on the agency theory, which states that by enlarging the ownership of shares by institutions outside the company can reduce the conflict of interest that occurred and opportunistic behavior of management so as to reduce the potential possibility of tax aggressiveness action. Research conducted by Nugroho & Firmansyah (2017), Cahyono et al, (2016), Hanna & Haryanto (2016), Mahulae et al, (2016), Prakosa (2014), Embree (2012), Badertscher et al, (2009), Khurana & Moser (2009) show that institutional ownership has an influence on tax aggressiveness. Based on the description above, the proposed hypothesis is as follows: H3 : Institutional ownership has negative effect on tax aggressiveness…”

“…The Company implements corporate governance to create effective corporate performance and impact on decisions to be effective in determining policies related to the effective corporate tax rate (Pranoto & Widagdo, 2015). This research refers to research conducted by Nugroho & Firmansyah (2017), Prawira (2017), Hanna & Haryanto (2016), Cahyono et al, (2016), Fadli (2016), Wulansari (2015), Pranoto & Widagdo (2015), Embree (2012), Suyanto & Supramono (2012), Khurana & Moser (2009), Badertscher et al, (2009) that uses corporate governance, which is measured using institutional ownership and independent board of commissioners, have an impact on tax aggressiveness. This study differs from the previous study as it uses institutional ownership and the proportion of independent board of commissioners in measuring corporate governance.…”

nalysis of the Effect of Business Strategy and Financial Distress on Tax Avoidance

“…Companies that are in financial distress increase tax aggressiveness to generate additional cash outflows (Richardson, Lanis, & Taylor, 2014). Nugroho and Firmansyah (2017) in their research gave a real example when there is an economic crisis in Indonesia found that many companies experience financial distress or high financial distress so that they are no longer able to maintain the company's survival due to continuous losses, have very large debts and lack of cash to pay off the debt. In the condition of financial distress, companies are required to save capital or meet the minimum capital needed by the company, so that the company is still able to maintain credit ratings, meet the requirements of debt agreements, or continue as a going concern company (Richardson, Taylor, and Lanis, 2015).…”