Proceedings of the 1st Sampoerna University-AFBE International Conference, SU-AFBE 2018, 6-7 December 2018, Jakarta Indonesia

Research Article

Corporate Governance, Earnings Management and Tax Avoidance: Indonesia Evidence

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  • @INPROCEEDINGS{10.4108/eai.6-12-2018.2286317,
        author={Ibrahim Husein Lubis and Desi Adhariani},
        title={Corporate Governance, Earnings Management  and Tax Avoidance: Indonesia Evidence},
        proceedings={Proceedings of the 1st Sampoerna University-AFBE International Conference, SU-AFBE 2018, 6-7 December 2018, Jakarta Indonesia},
        publisher={EAI},
        proceedings_a={SU-AFBE},
        year={2019},
        month={8},
        keywords={corporate governance earnings management tax avoidance institutional ownership independent commissioners audit committee},
        doi={10.4108/eai.6-12-2018.2286317}
    }
    
  • Ibrahim Husein Lubis
    Desi Adhariani
    Year: 2019
    Corporate Governance, Earnings Management and Tax Avoidance: Indonesia Evidence
    SU-AFBE
    EAI
    DOI: 10.4108/eai.6-12-2018.2286317
Ibrahim Husein Lubis1, Desi Adhariani1,*
  • 1: Faculty of Economics and Business, Universitas Indonesia, Indonesia
*Contact email: desi.adhariani@ui.ac.id

Abstract

This study aims to investigate the empirical evidence on the impact of corporate governance on earnings management and tax evasion in public companies. The scope of this study is companies listed on the Indonesia Stock Exchange except those in financial, real estate, and telecommunication industries. Panel regression method was employed to run the data on samples for five-year-period (2012-2016). The results show that several corporate governance mechanisms play an important role in detecting earnings management, namely the institutional ownership, the percentage of independent commissioners, and percentage of audit committee members with finance/accounting background. For tax evasion, only the size of the board of commissioners that plays a role in detecting the practice. The results have practical implication on improving several corporate governance mechanisms to effectively tackle unethical practices such as earnings management and tax avoidance.