Identifying the Consequences of Non-Compliance with Accounting Standards in Tax Auditing
Keywords:
Tax avoidance, previous management experience of senior managers,, Tehran Stock ExchangeAbstract
The main objective of this study is to examine the relationship between the previous management experience of senior executives and tax avoidance in companies listed on the Tehran Stock Exchange. This research is applied in purpose and analytical in nature. It uses a panel dataset from 133 listed companies over a five-year period (2018–2022). The econometric analysis was conducted using panel data regression models with fixed effects. Financial data were extracted from audited financial statements and processed using Excel and Stata software. Control variables included ROA, firm size, leverage, market-to-book ratio, and asset composition. Regression results show a statistically significant positive relationship between the previous management experience of senior executives and the level of tax avoidance. Additionally, return on assets and tangible assets show positive and significant effects on tax avoidance, whereas inventory and operating cash flows show negative and significant effects. The model explains approximately 8.28% of the variation in the dependent variable. Diagnostic tests confirm model adequacy: variance inflation factors indicate no multicollinearity, the Breusch-Pagan test confirms heteroskedasticity which was corrected using GLS, and the Wooldridge test shows no autocorrelation. Prior managerial experience significantly influences the propensity of senior executives to engage in tax avoidance. Managers with a history of serving in other public firms appear to have greater capabilities in identifying and exploiting tax loopholes. These findings highlight the importance of executive background in financial strategy formation and suggest practical implications for tax authorities in risk assessment and compliance strategies.
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