The Analysis of Financial Reporting Quality and Tax Avoidance According to Governmental Ownership and Political Connections

Ebrahimi, Seyed Kazem; Bahraminasab, Ali; Hasanzadeh, Mehdi

Document Type : Descriptive

Authors

¹ Assistant Proof, Academic Members of the Semnan University, Semnan, Iran

² Instructor, Academic Members of the Semnan University, Semnan, Iran

³ MSc. Student Accounting Semnan University, Semnan, Iran

Abstract

Directors of public companies have short-term horizons decisions, so they are try to use every possible means, including manipulation and earnings management, to improve their current performance and therefore increase their reward. In addition relations and political connections influence not only on the financial position of economic firms, but it also affects managers' motivation in relation to earnings management. Finally, it is expected that this situation creates significant differences in tax policy and the quality of corporate reporting; the aim of this study was to determine the effect of governmental ownership and political connections on financial reporting quality and tax avoidance. In this study, the data from 106 company listed in the Tehran Stock Exchange in the period from 2010 to 2015 were used, the results of multivariate regression model shows that governmental ownership and political connections have negative and significant effect on the quality of financial reporting and when the percentage of governmental ownership or political connections rise, leads to reduced quality of corporate reporting. The results also showed that Governmental ownership companies have no significant effect on tax avoidance, but political connections have a significant positive effect on corporate tax avoidance.

Keywords

20.1001.1.2322522.1396.5.0.20.2

Main Subjects

Pathology

References

جهرمی، مهتاب (1391). شفافیت شرکت و اجتناب مالیاتی. پایان‌نامه کارشناسی ارشد، دانشگاه تهران.

حساس یگانه، یحیی، (1384)، مفاهیم حاکمیت شرکتی، نشریه حسابدار، شماره 167، 30-33

رضازاده، جواد و خانی لنگلی (1394). تأثیر تمرکز مالکیت و مالکیت دولتی بر محافظه کاری حسابداری. دانش حسابداری مالی، شماره 2، 33-53.

رضایی، فرزین و جعفری نیارکی، آقایی روح اله (1394). رابطۀ بین اجتناب مالیاتی و تقلب در حسابداری شرکتها. پژوهشنامه مالیات، جلد 23، شماره 26، 109-134.

رضایی، فرزین و مشیری، حسین، (1393)، بررسی رابطه ساختار مالکیت با اجتناب مالیاتی شرکت‌ها،کنفرانس بین‌المللی حسابداری، اقتصاد و مدیریت مالی، تهران، شرکت دانش‌محور ارتاخه.

رضایی، فرزین و ویسی حصار، ثریا (1393). اثر روابط سیاسی با دولت بر رابطة بین تمرکز مالکیت با کیفیت گزارشگری مالی و هزینة سهام عادی. بررسی‌های حسابداری و حسابرسی، دوره21، شماره 4، 470-449.

ضیایی بیگدلی، فرهاد (1383). مالیات بر ارزش‌افزوده: مالیات مدرن، پژوهشکده امور اقتصاد، تهران.

مشایخی، بیتا و سیدی، جلال (1394). راهبری شرکتی و اجتناب مالیاتی. مجله دانش حسابداری، دوره 6، شماره 20، 83-103

مهدیفرد، محمدرضا، و رؤیایی، رمضانعلی، (1394). مدیریت سیاسی و قیمت سهام شرکت‌های پذیرفته شده در بورس اوراق بهادار: آزمون نظریه اقتصاد سیاسی. فصلنامه علمی پژوهشی دانش مالی تحلیل اوراق بهادار، سال هشتم، شماره 25، 28-19.

نیکو مرام، هاشم، بنی مهد، بهمن، رهنمای رود پشتی، فریدون و کیائی، علی، (1392)، اقتصاد مبتنی بر روابط، روابط سیاسی و کیفیت اقلام تعهدی، فصلنامه دانش حسابرسی، سال سیزدهم، شماره12، 13-1.

Al-dhamari R, Ku Ismail K N . (2015). Cash holdings, political connections, and earnings quality, International Journal of Managerial Finance, 11(2), 215- 231.

Annuar H A, Salihu I A, and Sheikh Obid S N (2014) Corporate ownership, governance and tax avoidance: An interactive effects. Procedia-Social and Behavioral Science, 164, 150-160.

Boubakri, N., Cossert, J.C. and Saffar, W. (2012). Political connections and the cost of equity capital, Journal of Corporate Finance, 18(3), 541-559.

Brandt, M., Brav, A., Graham, J. & Kumar, A. (2010). The diosyncratic volatility puzzle: time trend or speculative episodes? Review of Financial Studies, 23(2), 863-899.

Chaney, P. K., Faccio, M. & Parsley, D. C. (2012).The Quality of Accounting Information in Politically Connected Firms. Working paper, Vanderbilt University.

Cullinana, C. P., Wangb F., Wangb P. & Zhangb, J. (2012). Ownership structure and accounting conservatism in China. Journal of International Accounting, Auditing and Taxation, 21, 1-16.

Dechow, P. & Dichev, I. (2002). the quality of accruals and earnings: The role of accrual estimation errors. The Accounting Review, Supplement,77, 35-59.

Denis, D. K. & McConnell, J. J. (2003). International corporate governance. Journal of Financial & Quantitative Analysis, 38 (1), 1-36.

Fan, G. &Wang, X. (2006). Marketization index for China's provinces. China: National Economic Research Institute.

Fan, J. P. H., Rui, O. M. & Zhao, M. (2008). Public governance and corporate ﬁnance: Evidence from corruption cases. Journal of Comparative Economics, 36, 343–364.

Fisman, R. (2001). Estimating the value of political connections. The American Economic Review, 91(4), 1095-1102

Hanlon, M. & Heitzman, S. (2010). A review of tax research. Journal of Accounting and Economics, 50 (2- 3): 127–178.

Jensen, M. C. (1986). Agency cost of free cash flow, corporate finance, and takeovers. Corporate Finance, and Takeovers. American Economic Review, 76(2), 323–9.

Kim, C. & Zhang, L. (2016). Corporate Political Connections and Tax Aggressiveness. Contemporary Accounting Research, 33(1), 78-114.

Lee, W. & Wang, L. (2016). Do political connections affect stock price crash risk? Firm-level evidence from China. Review of Quantitative Finance and Accounting, 1, 1-34.

Lin, K. J., Karim, E. K. & Carter, C. (2015). why does China's stock market have highly synchronous stock price movements? An information supply perspective Advances in Accounting, 31(1), 68-79.

Liu, X., Saidi, R. & Bazaz, M. (2014). Institutional Incentives and Earnings Quality: The Influence of Government Ownership in China. Journal of Contemporary Accounting and Economics, 10, 248-261.

Zhu, C. F. & Li, Z. W. (2008). State ownership and accounting conservatism. Accounting Research, 5: 38–45

Public Organizations Management

The Analysis of Financial Reporting Quality and Tax Avoidance According to Governmental Ownership and Political Connections

References

References

Volume 5, Issue 2
April 2017
Pages 61-76

The Analysis of Financial Reporting Quality and Tax Avoidance According to Governmental Ownership and Political Connections

References

References

Volume 5, Issue 2April 2017Pages 61-76

Volume 5, Issue 2
April 2017
Pages 61-76