Finding the missing pieces to an optimal corporate tax savings: Information technology governance and internal information quality

Arfah Habib Saragih, Syaiful Ali, Eko Suwardi, Hargo Utomo

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

Based on stakeholder theory, resource-based theory, and decision theory, this study explores the relationship between information technology governance and internal information quality in determining business entity tax savings. Specifically, we examine the effects of internal information quality and information technology governance on corporate tax savings. We also investigate the joint effect of information technology governance and internal information quality on tax savings. This study used a quantitative method with panel data regression using a sample of the top 500 listed companies on the Australian Stock Exchange (ASX) from 2017 to 2021. Our dataset consists of 1,295 firm-year observations. We collected data manually to assess the proxy for information technology governance. Our analysis yielded three main findings. Firstly, we found no significant effect of the quality of internal information on tax savings on the ASX. However, we did observe a positive relationship between the construct of information technology governance and tax savings. Additionally, the presence of information technology governance was found to moderate this relationship. These findings remained consistent when subjected to various robustness checks and additional tests. Our findings highlight the importance of the information technology governance construct as a powerful catalyst for activating the link between internal information quality and optimal tax performance. This study has theoretical and practical implications for businesses, regulators, investors, and tax authorities, which are discussed further.

Original languageEnglish
Article number100665
JournalInternational Journal of Accounting Information Systems
Volume52
DOIs
Publication statusPublished - Mar 2024

Keywords

  • Decision theory
  • Information technology governance
  • Internal information quality
  • Resource-based theory
  • Stakeholder theory
  • Tax savings

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