Audit committee attributes and corporate tax avoidance: The moderating role of audit committee independence
List of Authors
  • Fathyah Hashim , Md. Nazrul Islam

Keyword
  • Corporate Tax Avoidance, Audit Committee Size, Audit Committee Meeting, Audit Committee Independence.

Abstract
  • This research investigates the effect of audit committee (AC) attributes on tax avoidance of the selected fuel & power sector companies listed on DSE of Bangladesh. The study employs a panel data set of 17 fuel & power sector companies for 5 years, i.e., 2015-16 to 2019-2020, and analyses the sample data by applying panel data regression model. The study uses two econometric models for making the empirical analysis and testing the undertaken hypotheses. Adopting several diagnostic tests, and model selection tests, the study runs random effect model for first econometric model and fixed effect model for second econometric model. It also performs a series of robustness tests by adopting alternate regression methods, and alternate proxy of dependent variable for further confirmation of the empirical findings. The study finds that AC size has negative insignificant association with corporate tax avoidance, while AC meeting has negative significant relationship to corporate tax avoidance. Further, the study finds that AC independence moderates the relationship of AC size and AC meeting with corporate tax avoidance. Specifically, the study documents that the interaction of AC size and AC independence (ACS*ACI) has negative significant relationship to corporate tax avoidance, while the interaction of AC meeting and AC independence (ACM*ACI) has positive significant association to corporate tax avoidance. Thus, the study might contribute in policy making by the policymakers and practitioners of the business sectors to control or limit the corporate tax avoidance.

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