Management Power,Independent Audit Quality And Enterprise Tax Avoidance

With the integration of China’s accounting standards and international accounting standards,enterprises became more independent in choosing accounting policies,and the gap between accounting profits and taxable income became obviously large,both provided space for enterprise tax planning.Enterprise retains the economic resources by some tax avoidance means,which should be handed over to the government.The firm aims to creating benefits for shareholders and managers through the economic resources.However,the overall level of social welfare will be affected.How to restrain the improper tax avoidance of enterprises is one of the hot issues concerned by the theoretical and practical circles.The existing literature studied the relationship between management power and enterprise tax avoidance from multiple perspectives,and made relatively rich achievements.But there is no unified research conclusion.In addition,previous studied rarely focused on the impact of independent audit as an external supervision mechanism on the relationship between management power and enterprise tax avoidance.Use the sample of Chinese A-share listed companies from 2008 to 2021,this thesis reviews relevant research literature on management power,independent audit and enterprise tax avoidance.Based on the principal-agent theory,information asymmetry theory and tax avoidance theory,this thesis theoretically analyses the relationship between management power,independent audit and enterprise tax avoidance.According to the theoretically analysis,this thesis puts forward two research assumptions,and then empirically tests the proposed assumptions.The conclusions are as follows:(1)More power the executives have,the tax avoidance degree of the enterprise will be higher.Further research shows that the relationship between management power and enterprise tax avoidance is affected by such factors as the nature of enterprise ownership,executives’ average age and their gender.(2)Independent audit quality can significantly inhibit enterprise tax avoidance caused by management power.Further research shows,independent audit quality characteristics have an impact on the above moderation effect.According to the research conclusions,this thesis puts forward three countermeasures and suggestions to reduce the damage caused by enterprises’ improper tax avoidance.The countermeasures and suggestions are as follows: First,independent audit should improve the audit quality and actively play the role of external supervision;Second,the government should improve the relevant legal system,standardize the tax collection and management procedures,and fully utilize the role of independent audit in anti-tax avoidance;Third,enterprises should improve the internal governance mechanism and fully utilize the role of independent audit in governance.The main contributions of this thesis are as follows: First,this thesis provides a more comprehensive study of the impact of management power on enterprise tax avoidance behavior,which will enrich the literature in related fields;Second,independent audit is introduced into the research framework of management power and enterprise tax avoidance,which expands the research perspective of the relationship between them;Third,based on the research conclusions,the proposed countermeasures and suggestions provide some new ideas for improving the efficiency of tax inspection and improving the internal governance mechanism of enterprises.