Accounting Analysis Journal

Factors Influencing Accounting Fraud in Village Fund Management in South Kalimantan

Wanda Safitri — 2023-12-04

Purpose: This study investigated the factors contributing to accounting fraud when handling village funds. The purpose of this study was to investigate and analyze how factors such as internal control systems, compliance with accounting regulations, personal morality, and information asymmetry in managing village funds are considered to influence accounting fraud.

Method: Village officials and the Village Consultative Body at Tapin Selatan District, Kalimantan Selatan, were made up to be the study’s population. Purposive sampling was used in the sample selection process. One hundred twenty-six respondents served as the sample used in the analysis. The hypothesis was tested with multiple linear regression.

Findings: Empirical evidence showed that accounting fraud was not affected by internal control systems. Another finding showed that compliance with accounting regulations and individual morality detrimentally impacted accounting fraud. On the contrary, accounting fraud is positively affected by asymmetric information.

Novelty: The difference between this research and previous studies is related to the object studied, indicators on individual morality variables, and the addition of information asymmetry variables.

Keywords: Accounting Fraud; Compliance with Accounting Regulations; Internal Control Systems; Individual Morality; Information Asymmetry

Do Corporate Social Responsibility and Corporate Governance Disclosures Affect Tax Avoidance?

Faradila Dyah Ayu Widianti — 2023-12-04

Purpose: The purpose of this study is to examine the impact of corporate social responsibility (CSR) and corporate governance on tax avoidance.

Method: This empirical study uses a database from Bloomberg within all companies listed on Indonesia Stock Exchange excluding this sector: finance; property and real estate. The initial sample includes 25 companies with 5 years of observation from 2017 to 2021 and in total there are 125 research samples. In order to test the impact of CSR and corporate governance on tax avoidance, this research uses multiple linear regression.

Findings: The result shows that CSR disclosure increases tax avoidance which indicates that there is a trade-off between CSR disclosure and tax. But this research design does not find evidence that corporate governance has an impact on tax avoidance which means that corporate governance can not mitigate tax avoidance.

Novelty: Some previous research based on GRI Index for measuring CSR and using some proxy such as board independence, audit quality, audit committee for measuring corporate governance. This study using Environmental and Social Disclosure Score for measuring Practice of CSR and using Governance Disclosure Score for measuring Corporate Governance.

Determinants of Effective Tax Rate: Empirical Evidence From Selected Manufacturing Industries in Bangladesh

Md. Jamil Sharif — 2024-02-05

Purpose: The objective of this study is to conduct an empirical investigation of financial and operational firm specific factors that have an impact on the effective tax rate (ETR) for Bangladeshi manufacturing firms operating in a variety of industries.

Method: The study solely focused on three different production industries: Pharmaceuticals and Chemicals, Engineering, and Ceramics. At least six years’ set of panel data have been collected from each industry between 2016 and 2021 in order to conduct an analysis of the panel corrected standard error model (PCSE). Thus, the PCSE model is used to conduct an analysis on a total of 265 observations derived from 44 different company listed in DSE.

Findings: Out of eight financial and operational factors, firm size and profitability has a significant positive correlation with ETR in practically every sector separately and collectively. The findings are supported by political cost theory that suggests large firms have to pay more taxes due to political attention. One exception has been found regarding Ceramics sector where firm size has insignificant negative impact on ETR. This is reinforced by the political power theory, which states that politically influential corporations are less likely to voluntarily pay taxes because of the incentives provided by the power they wield in politics. On the other hand, Interest coverage ratio, Interest to sales ratio, capital intensity, firm age leverage has also significant impact on the effective tax rate in both model ETR1 and ETR2 differently across sectors. This study also concludes that there is variation among industry to industry and little bit of year indicators.

Novelty: The study investigates the factors of manufacturing companies empirically and contributes to the variety of taxation issues among various manufacturing sectors. According to the authors’ best knowledge, there has been very little research on taxes, hence this study is a completely new contribution to Bangladesh’s manufacturing sector.

Keywords: Effective Tax Rate; Dhaka Stock Exchange; Political Cost Theory; Political Power Theory

The Importance of Intellectual Capital In Driving Firm Performance

Kusuma Indawati Halim — 2024-02-28

Purpose: The study explores the structure of intellectual capital and how it influences firm performance of Kompas 100 Index companies using the VAIC model.

Method: As research samples, 29 companies from the Kompas 100 index that were listed on the Indonesian Stock Exchange were employed. The data came from annual reports that were released between 2017 and 2021. A multiple regression analysis was used to create the regression model for this study.

Findings: It can be observed that VAIC has a significant positive effect on both ROA and ROE. Based on each component of VAIC, it is clear that HCE, SCE, and CEE have a positive and significant impact on firm performance. By setting spesific targets and regularly monitoring these neasures, businesses can identify areas for improvement and make informed decisions to enhance their firm performance.

Novelty: The findings are especially significant for policymakers that want to emphasize the value of Intellectual Capital and create a system for disclosing Intellectual Capital. This study also offers up new paths for future research that will take into consideration the dynamic nature of the relationship between Intellectual Capital and Firm Performance and account for endogeneity.

Keywords: Human Capital Efficency; Structural Capital Efficiency; Capital Employed Efficiency; Value Added Intellectual Coefficient

The Effect of The COVID-19 Pandemic on The Tax Compliance of Digital Economy Business

Ndaru Puspitarini — 2024-02-28

Purpose: Tax authority have faced one of the challenges collecting tax revenue during the Covid-19 pandemic in decreasing of the economy will potentially leads firms in financial distress. Financial distress motivated firms to engage tax avoidance. Moreover, activities in the digital economy that are growing rapidly could be a challenge to prevent tax avoidance. Thus, this research intends to investigate how the Covid-19 pandemic affects associations between businesses that engage in digital economy activities and tax avoidance on Indonesian public enterprises.

Method: The study used sample of 250 firms which are listed on Indonesia Stock Exchange (BEI) in 2018-2021 and conducted using difference-in-difference method.

Findings: The study finds empirical evidence that digital economy activities positively associated with effective tax rate. Nevertheless, the Covid-19 pandemic weakened this association.

Novelty: Previous studies partially examined the relationship between the COVID-19 pandemic on tax avoidance and the digital economy on tax avoidance. Quantitative researches about digital business are also mainly carried out in developed countries considering that digital economic activities have been massively carried out in developed countries. This study will complement previous studies where the Covid-19 pandemic and economic activity will be interacted with and linked to corporate tax avoidance behaviour, especially in Indonesia.

Keywords: Covid-19; Tax Avoidance; Digital Economy

Financial Risks, Related Party Transactions and Value of BUMN Companies in Indonesia

Anggita Langgeng Wijaya — 2024-03-14

Purpose : The research investigates the influence of financial risk on the value of state-owned companies (BUMN) on the Indonesia Stock Exchange with related party transactions as a moderating variable.

Method : The population in this research is all state-owned companies listed on the Indonesia Stock Exchange from 2015 to 2022. The sample selection technique uses purposive sampling methods. Data analysis uses regression testing with moderating variables.

Findings : The results of this research show that financial risk has a negative effect on the value of state-owned companies in Indonesia. Related party transactions (RPT) have a moderating effect that strengthens the influence of corporate financial risk on the value of BUMN companies.

Novelty : The research can prove the role of related party transactions as a moderating variable on the influence of financial risk and the value of BUMN companies.

Keywords : Company Value; Financial Risk; Related Party Transactions; Bankruptcy; BUMN

The Real Earnings Management and Tax Aggressiveness in Indonesia

Ain Hajawiyah — 2024-03-20

Purpose: This research aimed to examine the effect of real earnings management on tax aggressiveness.

Method: The study used a quantitative approach using secondary data from the manufacturing companies listed on the Indonesia Stock Exchange from 2019 to 2021. The sampling technique used is the purposive sampling method and the analysis technique used is multiple linear regression using SPSS 25 software.

Findings: The findings of this study indicate that real earnings management significantly negatively affected tax aggressiveness. Variable control profitability significantly positively affected tax aggressiveness. Whereas variable control leverage does not affect tax aggressiveness. Moreover, variable size significantly positively affected tax aggressiveness.

Novelty: The study uses real earnings management as an independent variable instead of accrual earnings management, which has been commonly used in previous studies. Real earnings management is considered effective in a company’s earnings management strategy because it manipulates data related to day-to-day operation activity of the company.

Keywords: Real Earnings Management; Tax Aggressiveness; Profitability; Leverage; Firm Size