Modeling Tax Avoidance by Accounting Information: Evidence from Tehran Stock Exchange

Abstract

Tax avoidance is a kind of abusing source of tax rules. Economic factors, social and psychological issues can be regarded as the reasons for tax avoidance. In Iran, for reasons such as regarding many information as confidential, lack of compatibility among data stored in different centers, inability to use direct methods of measurement and etcetera, it is difficult to provide precise or accurate estimation of tax avoidance. The aim of this study was modeling tax avoidance sources, using accounting information of companies listed in the Tehran Stock Exchange, TSE. This followed by collecting general information of the companies in a 10 year period from 1383 to 1392, and selecting a sample of 490 year-company fro TSE, using Smart PLS software and modeling technique of structural equation for tax avoidance modeling. The results showed that increase in the mechanisms for corporate governance impacts on tax avoidance inversely, and that corporate governance through the quality mediating variable of financial reporting affects tax avoidance indirectly. Other results showed that audit quality influences tax avoidance inversely, and that audit quality through the quality mediating variable of financial reporting affects tax avoidance indirectly.

Keywords

• tax avoidance
• structural equation modeling
• accounting information