Proceedings of the 1st International Conference on Business, Law And Pedagogy, ICBLP 2019, 13-15 February 2019, Sidoarjo, Indonesia

Research Article

Willingness of Tax Amnesty Participation Based on Financial Audit Quality

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  • @INPROCEEDINGS{10.4108/eai.13-2-2019.2286160,
        author={Permata Ayu Widyasari and Celina Tashya Evangelista and Yie Ke Feliana},
        title={Willingness of Tax Amnesty Participation Based on Financial Audit Quality},
        proceedings={Proceedings of the 1st International Conference on Business, Law And Pedagogy, ICBLP 2019, 13-15 February 2019, Sidoarjo, Indonesia},
        publisher={EAI},
        proceedings_a={ICBLP},
        year={2019},
        month={10},
        keywords={audit quality accounting firm’s reputation tax amnesty restatement},
        doi={10.4108/eai.13-2-2019.2286160}
    }
    
  • Permata Ayu Widyasari
    Celina Tashya Evangelista
    Yie Ke Feliana
    Year: 2019
    Willingness of Tax Amnesty Participation Based on Financial Audit Quality
    ICBLP
    EAI
    DOI: 10.4108/eai.13-2-2019.2286160
Permata Ayu Widyasari1,*, Celina Tashya Evangelista1, Yie Ke Feliana1
  • 1: University of Surabaya, Indonesia
*Contact email: permataayu@staff.ubaya.ac.id

Abstract

Tax amnesty is an Indonesian government program which company may reveal its hidden asset. By paying redemption money, the taxpayer can reveal its hidden asset without getting the typical administrative sanction of taxation. It turned out that many companies hiding its asset participated in this program. That condition raises the question regarding audit quality of the financial statement of those companies. Audit quality is proxied by the accounting firm’s reputation, industry specialization, and tenure. The research shows that the accounting firm’s reputation had a significant negative impact on participation in the tax amnesty program in 2016, 2017, or both, and the amount of restatement regarding tax amnesty program. BIG - 4 accounting firms are associated with better audit quality. Consequently, the company which audited by BIG-4 are less likely to participate in tax amnesty. In addition, leverage as control variable had a significant negative impact on participation in the tax amnesty program.