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2023•International Journal of Academic Research in Business and Social SciencesOpen access

Corporate Governance, Audit Oversight Board and Tax Avoidance: Malaysian Family Listed Firms

Rahayu Abdul Rahman, Nor Asyiqin Salleh, Norhayati Zamri, Nor Bahiyah Omar, Lilis Maryasih

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Abstract

The aim of this study is to examine the impact of corporate governance and Audit Oversight Board (AOB) on tax avoidance of family-owned listed on Bursa Malaysia. Consistent with prior research, this study uses effective taxes rate (ETR) to measure tax avoidance. Using a sample of 1,333 firm-year observations of Malaysian family-owned public listed companies from 2014 to 2018, this study finds corporate governance and AOB affects tax avoidance practice. In particular, the findings indicate that there are significant and negative relationship between audit committee size and AOB and ETR. The results suggest that audit committee size and AOB are the most effective corporate governance mechanism in mitigating tax avoidance strategies of such firms.

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What this paper is about

The aim of this study is to examine the impact of corporate governance and Audit Oversight Board (AOB) on tax avoidance of family-owned listed on Bursa Malaysia. Consistent with prior research, this study uses effective taxes rate (ETR) to measure tax avoidance. Using a sample of 1,333 firm-year observations of Malaysian family-owned public listed companies from 2014 to 2018, this study finds corporate governance and AOB affects tax avoidance practice. In particular, the findings indicate that there are significant and negative relationship between audit committee size and AOB and ETR. The results suggest that audit committee size and AOB are the most effective corporate governance mechanism in mitigating tax avoidance strategies of such firms.

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Available abstract

The aim of this study is to examine the impact of corporate governance and Audit Oversight Board (AOB) on tax avoidance of family-owned listed on Bursa Malaysia. Consistent with prior research, this study uses effective taxes rate (ETR) to measure tax avoidance. Using a sample of 1,333 firm-year observations of Malaysian family-owned public listed companies from 2014 to 2018, this study finds corporate governance and AOB affects tax avoidance practice. In particular, the findings indicate that there are significant and negative relationship between audit committee size and AOB and ETR. The results suggest that audit committee size and AOB are the most effective corporate governance mechanism in mitigating tax avoidance strategies of such firms.

Key concepts: Accounting, Business, Audit committee, Corporate governance, Tax avoidance, Audit, Sample (material), Corporate tax

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