Bankruptcy risk, board of commissioners' effectiveness, and tax avoidance

Bintar Surya Putra, Siti Nuryanah, Sardar M.N. Islam

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

This study examines the effect of bankruptcy risk on tax avoidance and the moderating effect of the board of commissioners' effectiveness on the relationship between bankruptcy risk and tax avoidance. This study was conducted by taking sample from Indonesia, a developing country, due to the country's specific characteristics relating to risks. Data are collected from Indonesia Stock Exchange for the period 2014-2016; the period before the tax amnesty program was launched in Indonesia. The results of the study show that bankruptcy risk has a positive effect on tax avoidance. The study also found that the board of commissioners' effectiveness weakens the positive relationship between bankruptcy risk and tax avoidance. This study reveals the implications of the effect of bankruptcy risk and tax avoidance in Indonesia and the moderating effect of board of commissioners' effectiveness on the relationship between bankruptcy risk and tax avoidance. The results of the study show that bankruptcy risk has a positive effect on tax avoidance. The study also found that the board of commissioners' effectiveness weakens the positive relationship between bankruptcy risk and tax avoidance. This study reveals the implications on tax avoidance activities in Indonesia and the effectiveness of board of commissioners.

Original languageEnglish
Title of host publicationProceedings of the 33rd International Business Information Management Association Conference, IBIMA 2019
Subtitle of host publicationEducation Excellence and Innovation Management through Vision 2020
EditorsKhalid S. Soliman
PublisherInternational Business Information Management Association, IBIMA
Pages9307-9318
Number of pages12
ISBN (Electronic)9780999855126
Publication statusPublished - 1 Jan 2019
Event33rd International Business Information Management Association Conference: Education Excellence and Innovation Management through Vision 2020, IBIMA 2019 - Granada, Spain
Duration: 10 Apr 201911 Apr 2019

Publication series

NameProceedings of the 33rd International Business Information Management Association Conference, IBIMA 2019: Education Excellence and Innovation Management through Vision 2020

Conference

Conference33rd International Business Information Management Association Conference: Education Excellence and Innovation Management through Vision 2020, IBIMA 2019
CountrySpain
CityGranada
Period10/04/1911/04/19

Keywords

  • Altman Z-Score
  • Bankruptcy risk
  • Board of commissioners
  • Two-tier board

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