The Influence of Audit Fee, Audit Tenure, Audit Quality and Audit Committee on Tax Avoidance (Manufacturing Sector 2018-2022)

Abstract

Taxes represent the largest source of income for the country, yet a considerable number of corporate taxpayers view them as a burdensome obligation to be minimized, leading to pervasive tax avoidance practices. This research aims to assess the impact of audit fees, audit tenure, audit quality, and the audit committee on tax avoidance metrics, specifically Cash Effective Tax Rate (CETR), Effective Tax Rate (ETR), and Books Tax Differences (BTD), employing the Theory of Planned Behavior. The research employs a quantitative approach with panel data collected from 34 manufacturing companies listed on the IDX, utilizing multiple linear regression analysis through Eviews 12 software. The results indicate that audit fees and audit quality have a significant negative effect on CETR, while audit tenure has a significant positive impact. For ETR, audit fees and audit quality negatively influence it, while audit tenure shows a significant positive effect, and the audit committee does not significantly affect it. Finally, audit fees and audit quality have a significant negative impact on BTD, audit tenure positively affects it, and the audit committee does not significantly influence it.