Financial Statement Ratios, Audit Quality and Long-Term Tax Avoidance

Abstract

Taxes are a burden for companies, reducing their profits, so they engage in tax planning to minimize the amount of tax they must pay. Tax avoidance is a way for companies to reduce or minimize tax payment obligations, but it does not violate the provisions or government policies in taxation. The purpose of this study is to assess and analyze the effect of financial statement ratios and audit quality on Tax Avoidance both short-term and long-term. The study introduces a method of measuring corporate tax avoidance, namely long-term cash ETR. This study finds that there is various effect in Indonesia, Thailand, and Malaysia on corporate tax avoidance.