JEFMS Journal

ABSTRACT:

This study aims to examine the effect of financial distress and the Risk Management Committee on tax aggressiveness. This study uses quantitative and secondary data in the form of data on manufacturing companies listed on the Indonesia Stock Exchange during the period 2013 to 2019. The results show that 1) bfinancial distress has a negative effect on tax aggressiveness, which means that financial distress actually reduces the company's tax aggressiveness efforts. Maintaining the company's positive reputation through compliance with regulations is seen as more important to maintain the company's viability than the benefits of short-term funding 2) The Risk Management Committee does not affect the company's supervision in carrying out tax aggressiveness in financial distress conditions.

KEYWORDS:

Financial Distress; Risk Management Committee; Tax aggressiveness

REFERENCES:

1) Altman, E. 1968. Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. Journal of Finance 23 (4): 589–609.

2) Ahdiyah, A. (2021). Impact of Financial Distress, Firm Size, Fixed Asset Intensity, and Inventory Intensity on Tax Aggressiveness. Journal of Accounting Auditing and Business, 4(2), 49–59.

3) Armstrong, C. S., Blouin, J. L., Jagolinzer, A. D., & Larcker, D. F. (2015). Corporate governance, incentives, and tax avoidance. Journal of Accounting and Economics, 60(1), 1–17. https://doi.org/10.1016/j.jacceco.2015.02.003

4) Boussaidi, A., & Hamed, M. S. (2015). The Impact of Governance Mechanisme on Tax Aggresiveness: Empirical Evidence From Tunisian Context. Journal of Asian Business Strategy, 5(1), 1–12. Retrieved from http://aessweb.com/journaldetail.php?id=5006

5) Damayanti, H. H., & Prastiwi, D. (2017). Peran oecd dalam meminimalisasi upaya. Jurnal Akuntansi Multiparadigma, 8(2), 79–89. https://doi.org/http://dx.doi.org/10.18202/jamal.2017.04.7041

6) Darmawan, I., & Sukartha, M. I. (2014). pengaruh penerapan corporate governance , leverage , return on assets , dan ukuran perusahaan pada penghindaran pajak I Gede Hendy Darmawan. E-Jurnal Akuntansi Universitas Udayana, 1, 143– 161.

7) Deslandes, M., Fortin, A., & Landry, S. (2020). Audit committee characteristics and tax aggressiveness. Managerial Auditing Journal, 35(2), 272–293. https://doi.org/10.1108/MAJ-12-2018-2109

8) Dhamara, G. P., & Violita, E. S. (2018). The Influence of Financial Distress and Independence of Board of Commissioners on Tax Aggressiveness, 55(Iac 2017), 81–86. https://doi.org/10.2991/iac-17.2018.15

9) Doran, M. (2009). Scholarship @ georgetown law tax penalties and tax compliance article tax penalties and tax compliance, 161.

10) Dwijayanti, S. (2010). Penyebab, dampak, dan pbediksi dari financial distress serta solusi untuk mengatasi financial distress. Jurnal Akuntansi Kontemporer, 2(2), 191–205.

11) Edwards, A., Schwab, C., & Shevlin, T. (2012). Financial Constraints and the Incentive for Tax Planning. Working Paper. https://doi.org/10.2139/ssrn.2163766

12) Edwards, A., Schwab, C., & Shevlin, T. (2016). Financial constraints and cash tax savings. Accounting Review, 91(3), 859– 881. https://doi.org/10.2308/accr-51282

13) Frank, M. M., Lynch, L. J., & Rego, S. O. (2009). Tax Reporting Aggressiveness to Aggressive and Its Relation Financial Reporting. The Accounting Review, 84(2), 467–496. https://doi.org/10.2308/accr.2009.84.2.467

14) Law, K. K., & Mills, L. F. (2015). Taxes and Financial Constraints: Evidence from Linguistic Cues, 53(4). https://doi.org/10.1111/1475-679X.12081

15) Marwa, T., & Wahyudi, T. (2018). The Effect of Transfer Pricing , Capital Intensity and Financial Distress on Tax Avoidance with Firm Size as Moderating. Modern Economics, 10(October), 122–128.

16) Maulana, M., Marwa, T., & Wahyudi, T. (2018). The Effect of Transfer Pricing, Capital Intensity and Financial Distress on Tax Avoidance with Firm Size as Moderating Variables. Modern Economics, 11(1), 122–128. https://doi.org/10.31521/modecon.v11(2018)-20

17) Minnick, K., & Noga, T. (2010). Do corporate governance characteristics in fl uence tax management? Journal of Corporate Finance, 16, 703–718. https://doi.org/10.1016/j.jcorpfin.2010.08.005