The Impact of Tax Avoidance Behavior and Independence of Directors to Accounting Conservatism

• Main Authors: Yi-Xi Qian, 錢羿希
• Other Authors: Li-Lun Liu
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/zm2mfz

碩士 === 中原大學 === 會計研究所 === 106 === Previously, the financial statements dishonest events of Enron, WorldCom, Boda, and Liba were disclosed, indicating that there are many problems in corporate governance. Watts (2003a, 2003b) proposed using Accounting Conservatism can improve the effectiveness of corporate contracts, reduce agency problems, and solve the problems in corporate governance. Watts (2003) suggests that tax factors can affect accounting conservatism. In recent years, active tax avoidance by companies around the world has become a common phenomenon (Lanis and Richardson, 2012a). Although tax avoidance is not illegal, this situation has affected the country''s fiscal revenue and the principle of tax fairness, so countries have launched anti-tax avoidance actions. Our government also actively promotes various reform policies, such as the companies’ Independent Director System. The independent directors of the company can improve the effectiveness of corporate contracts, reduce agency problems, and solve the problems in corporate governance and safeguard the benefits of shareholders and investors. Therefore, the studies focus on whether corporate tax avoidance behavior and the establishment of independent director system affect the firm''s accounting conservatism. Based on the Basu’s model in 1997, this study has 4,524 data from 2011 to 2014. The results show that there is no obvious relationship between corporate tax avoidance behavior and accounting conservatism; the independence of the company''s board of directors is negatively related to the accounting conservatism, which reflects that the company''s independent director system can not fully achieve the goal at present; Under the joint effect of the independence directors and active tax avoidance, the accounting conservatism has increased, indicating that the company''s independent directors also hope that enterprises can reduce the loss of profits through active tax avoidance behavior, thus enhancing the accounting conservatism and reducing the tax burden. The study also tested the results of the study through additional analysis and sensitivity analysis.