Family Ownership, Audit Committee and Audit Fees: Relation with Tax Avoidance
DOI:
https://doi.org/10.22561/cvr.v36i1.8302Keywords:
Tax Avoidance, Family Firms, Audit Committee, Audit FeesAbstract
This paper aimed to analyze the relation between family ownership, audit committee, audit fees and tax avoidance of Brazilian companies listed in B3 (Brazilian stock market). The sample consists of 246 companies, covering the period 2011-2020, which provided 2,460 firm-years observations. To measure tax avoidance, we used the proxies Book-Tax Differences (BTD) and Tax Rate on Added Value (TRAV). We used a multiple linear regression technique, with coefficients estimated by the OLS method, year and industry fixed effects and robust standard errors. Results indicate that family ownership is positively associated with the tax avoidance related to direct taxes. Such an association was not found for TRAV, which seems to be related to the greater difficulty that the dominant family has in extracting income resulting from the saving of indirect taxes. Results also indicate that the presence of audit committee and audit fees are associated with tax avoidance. However, the presence of the audit committee in family firms only affects direct taxes, having no effect on the tax avoidance of indirect taxes. The paper has relevant implications for the study of tax avoidance, indicating that managers do not adopt aggressive tax practices uniformly for all taxes, as taxes with different economic characteristics present different incentives for these practices. The approval of a tax reform on consumption taxes also indicates the relevance of analyzing tax avoidance of direct and indirect taxes in a segregated way.
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