Title:
The Impact of Earning Management, Inventory Intensity and Management Compensation on Tax Avoidance

Authors:
Jennifer Servantlord, Iman Akhadi, Indonesia

Abstract:

The aim of this research is to examine the factors impacting tax avoidance in Indonesia. The study utilizes various independent variables including earnings management, independent commissioners, audit quality, management compensation, inventory intensity, and profitability. The dependent variable under investigation is tax avoidance. The research focuses on companies in the consumer non-cyclicals, consumer cyclicals, and basic material sectors listed on the Indonesia Stock Exchange from 2020 to 2022. Through purposive sampling, 54 companies fitting the criteria were selected then analyzed using multiple regression analysis. The findings suggest that audit quality has a positive correlation with the Cash Effective Tax Rate (CETR), indicating that higher audit quality leads to an increase in CETR and a decrease in tax avoidance. Meanwhile, earnings management, independent commissioners, management compensation, inventory intensity, and profitability have no effect on tax avoidance. This study is the first study conducted on companies in Indonesia that have engaged in tax avoidance during the Covid-19 pandemic (2020-2022).

DOI: https://doi.org/10.51505/IJEBMR.2024.8822