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The Effect of Tax Avoidance on Audit Costs

Author

Listed:
  • Ibnu Syahid Sira Haq

    (Universitas Hasanuddin, Makassar, Indonesia)

  • Haliah

    (Universitas Hasanuddin, Makassar, Indonesia)

  • Andi Sukmawati

    (Universitas Hasanuddin, Makassar, Indonesia)

Abstract

This research aims to analyze the impact of tax avoidance on audit fees in Indonesian Stock Exchange (IDX) companies in 2013-2015. This research used book-tax differences and book-tax conformity as a proxy for tax avoidance. The result of book-tax differences as a proxy of tax avoidance showed a significant effect on audit fees, indicating that the bigger the negative book-tax differences, the more the audit fees. On the other hand, the result of book-tax conformity as a proxy of tax avoidance showed that there is no significant effect on audit fees. Thus, book-tax differences is preferable to book-tax conformity as a proxy for tax avoidance. This research does a difference test of the impact of large book-tax differences and small book-tax differences on the audit fees as an additional analysis. The result showed that large book-tax differences is more significant than the other. This research also does a difference test of the impact of large positive book-tax differences and large negative book-tax differences on audit fees. It indicates no significant difference between the effect of large positive book-tax differences and large negative book-tax differences on audit fees.

Suggested Citation

  • Ibnu Syahid Sira Haq & Haliah & Andi Sukmawati, 2023. "The Effect of Tax Avoidance on Audit Costs," Journal of Business and Management Studies, Al-Kindi Center for Research and Development, vol. 5(5), pages 238-248, September.
    • Handle: RePEc:alk:jbms00:v:5:y:2023:i:5:id:6090
    DOI: 10.32996/jbms.2023.5.5.20
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