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CEO overconfidence, tax avoidance, and education foundation

Author

Listed:
  • Kurnia Indah Sumunar
  • Luluul Jannah
  • Darlin Aulia

    (STIE Media Nusantara Citra, Jakarta, Indonesia
    STIE Media Nusantara Citra, Jakarta, Indonesia
    STIE Media Nusantara Citra, Jakarta, Indonesia)

Abstract

Companies use tax avoidance to maximize after-tax income. This study examines whether CEO overconfidence has a positive effect to tax avoidance, and whether education foundation as a moderating variable strengthens or weakens that effect. Many studies on tax avoidance only focus on CSR activities in general and do not analyze the role of CEO in decision making. Using panel datasets from 305 companies in Indonesia from 2013-2017 that obtained from Thomson Reuters, the results show that CEO overconfidence has a significant positive effect on tax avoidance, and education foundation weakens the positive effect of CEO overconfidence on tax avoidance. With the role of CEO overconfidence, companies will do tax avoidance because CEO overconfidence can use their strong policy preferences to make decisions.

Suggested Citation

  • Kurnia Indah Sumunar & Luluul Jannah & Darlin Aulia, 2019. "CEO overconfidence, tax avoidance, and education foundation," Jurnal Akuntansi dan Auditing Indonesia, Accounting Department, Faculty of Business and Economics, Universitas Islam Indonesia, vol. 23(2), pages 99-105, DESEMBER.
    • Handle: RePEc:uii:jaaife:v:23:y:2019:i:2:p:99-105
    DOI: 10.20885/jaai.vol23.iss2.art4
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    Cited by:

    1. Paulina Sutrisno & Sidharta Utama & Ancella Anitawati Hermawan & Eliza Fatima, 2022. "Founder and Descendant vs. Professional CEO: Does CEO Overconfidence Affect Tax Avoidance in the Indonesia Case?," Economies, MDPI, vol. 10(12), pages 1-20, December.

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