Purpose – The purpose of this paper is to investigate the relationship between auditor characteristics and the level of tax avoidance in an emerging market.
Design/methodology/approach – In this regard, the effect of various factors such as auditor tenure, auditor industry specialization, audit reports and audit fees on tax avoidance was examined. The study sample includes listed companies in the Tehran Stock Exchange. The time period of study is six years from 2011 to 2016. Also in this study, firm size, leverage, firm age and auditor size were controlled.
Findings – The results of this research were determined in four hypotheses. First and second hypotheses that explore the relationship between auditor tenure and auditor industry specialization with tax avoidance were not confirmed. But the results showed a significant relationship between the type of audit opinions and audit fees with tax avoidance.
Originality/value – The current study investigates the auditor characteristics on tax avoidance in a developing nation of Iran and the results may helpful the developing countries.
Auditor tenure, Auditor industry specialization, Audit opinion
2020, Journal of Asian Business and Economic Studies
The purpose of this paper is to examine the association between designated corporate governance attributes and the degree of earnings management in selected quoted companies in Sri Lanka.
In total, 70 listed companies in Colombo Stock Exchange (CSE) were selected based on the highest market capitalisation for the period covering from 2015 to 2017 and representing beverage, food and tobacco, diversified, hotel and travel, manufacturing, oil palms and health care sectors, which accounted for 59.9 per cent of the total market capitalisation of CSE.
This study found a positive relationship between CEO-Chair duality and earnings management.
The insights may also provide investors, economic analysts and regulators with early caution indicators of potential problems in a corporation regarding corporate governance failures and aid stakeholders in assessing the effectiveness and efficiency of the board and corporate governance structure and earnings management methods.
This study extends the extant research on board characteristics and real earnings management by adopting prominent research design and modernised data. This study offers evidence on how selected audit and board committee’s characteristics influence real earnings management practices.
2019, Journal of Asian Business and Economic Studies
This study seeks to analyze and enhance understanding of taxpayer compliance with tax obligations in a systematic way by using the cost-benefit approach. Data from a sample of 250 audited service tax payers are used to examine the compliance factors. The hypotheses are tested using Spearman’s rho for ordinal variables and biserial correlation for dichotomous data. A decision matrix is used to make a logical conclusion on the business firm reporting behavior based on the derived expected utility value and compliance level. The results show a positive significant correlation between taxable sales, return submission and taxpayer compliance, but taxpayer compliance has a negative relationship with deficiency amount, penalty, and three other variables. The study suggests that minor penalties are unlikely to deter non-compliant behavior and economic factors seem to exert more influence on compliance. The methodology and matrix diagram can be customized to the requirements of tax audit management for assisting in audit case selection and strategy program to detect under-declaration and minimize shortfall in tax revenue. The taxpayer compliance-Correlation-Expected utility matrix analyzes the taxpayer’s expected utility function and compliance behavior, and provides an insight to what the most likely decision of a taxpayer is under certain assumptions.