Title : Moderating Role of Earnings Management on Leverage and Related Party Transactions Influence on the Effective Corporate Tax Rate (ETR) in Indonesian Stock Exchange Listed Industrial Companies for Periods of 2018 – 2022

Vol 7 No 6 (2024): Volume 07 Issue 06 June 2024

Article Date Published : 26 June 2024 | Page No.: 4233-4245 | Google Scholar | Crossref doi for this article

Abstract :

This research aims to determine how earnings management moderates the influence of leverage and related party transactions on the Effective Corporate Rate (ETR) in Indonesia Stock Exchange listed industrial sector companies for periods of 2018-2022. This research is conducted based on information obtained on the Indonesian Stock Exchange. The sampling technique for this research is purposive sampling method. The population in this study was 63 industrial sector companies listed on the IDX in 2018-2022 and the samples used are 45 companies. The type of data used is secondary data and the data analysis technique is panel data regression and the Moderate Regression Analysis (MRA) test with analysis tools using Eviews software. The results of this research show that leverage has a negative and significant effect on ETR and related party transactions have no effect on ETR in industrial sector companies listed on the IDX for the 2018-2022 period. Earnings management cannot moderate the influence of Leverage on ETR in Industrial sector companies listed on the BEI for the 2018-2022 period and earnings management cannot moderate the influence of related party transactions on ETR in industrial companies listed on the BEI for the 2018-2022 period.

Keywords :

Earnings Management, Effective Corporate Rate, Industrial Sector, leverage, Related Party Transactions.

References :

  1. Adams, S. O. (2020). Panel Data Analysis on Corporate Effective Tax Rates of Some Listed Large Firms in Nigeria. Dutch Journal of Finance and Management, 4(2), em0068. https://doi.org/10.21601/djfm/9345
  2. Alfarizi, R. I., Sari, R. H. D. P., & Ajengtiyas, A. (2021). Pengaruh profitabilitas, transfer pricing, dan manajemen laba terhadap tax avoidance Konferensi Riset Nasional Ekonomi, Manajemen dan Akuntansi, 2(1), 898-917. https://conference.upnvj.ac.id/index.php/korelasi/article/view/1185
  3. Amidu, M., Coffie, W., & Acquah, P. (2019). Transfer pricing, earnings management and tax avoidance of firms in Ghana. Journal of Financial Crime, 00–00. doi:10.1108/jfc-10-2017-0091
  4. Ann, Shella & Adler, Haymans & Manurung, Adler Haymans. (2019). The Influence of Liquidity, Profitability, Intensity Inventory, Related Party Debt, And Company Size To Aggressive Tax Rate. Archives of Business Research. Vol. 7. 105-115. https://doi.org/10.14738/abr.73.6319
  5. Apriliya, Pristanti., Fadjar, Harimurti., Suharno, Suharno. (2020). Pengaruh leverage, profitability, dan capital intensity ratio terhadap effective tax rate (etr) (study kasus pada perusahaan kontruksi dan real estate yang terdaftar pada BEI tahun 2014-2018). Jurnal Akuntansi dan Sistem Informasi Vol 16(1):41-51. DOI: https://doi.org/10.33061/jasti.v16i1.4408
  6. Ayuningtyas, M. P., Nurlaela, S., & Masitoh, E. (2020). Pajak, Ukuran Perusahaan Dan Tunneling Incentive Terhadap Keputusan Transfer Pricing Perusahaan Pertambangan. Jurnal Penelitian Ekonomi dan Akuntansi (JPENSI), 5(3), 9. https://doi.org/10.30736/jpensi.v5i3.362
  7. Brigham, E. F., & Daves, P. R. (2007). Intermediate financial management. Thomson Higher Education
  8. Brigham, E. F., & Houston, J. F. (2019). Fundamentals of financial management. Cengage Learning
  9. Ellyani, Masna & Hudayati, Ataina. (2019). The Role of Related Party Transaction and Earning Management in Reducing Tax Aggressiveness. Riset Akuntansi dan Keuangan Indonesia. 4. 134-145. doi: 23917/reaksi. v4i3.8979.
  10. Ernawati, S., Chandrarin, G., & Respati, H. (2019). Analysis of the Effect of Profitability, Company Size and Leverage on Tax Avoidance (Study on Go Public Companies in Indonesia). International Journal of Advances in Scientific Research and Engineering (IJASRE), ISSN:2454-8006. https://doi.org/10.31695/IJASRE.2019.33547
  11. Eva, Rosdiana, Pohan., Antonius, Hermawan, Permana., Yuda, Yogi, Ananda. (2022). Pengaruh Tax Reform, Size, Profitability dan Leverage terhadap Effective Tax Rate (ETR). Jurnal Syntax Idea, 4(2):328-328. doi: 10.36418/syntax-idea.v4i2.1766
  12. Falbo, T. D., & Firmansyah, A. (2021). Penghindaran pajak di Indonesia: multinationality dan manajemen laba. Bisnis-Net Jurnal Ekonomi Dan Bisnis, 4(1), 94-110. https://doi.org/10.46576/bn.v4i1.1325
  13. Margaretha, F & Handayani, A. S., (2023). Peran Manajemen Laba Sebagai Pemoderasi dalam Transfer Pricing Terhadap Tax Avoidance pada Perusahaan Manufaktur di Bursa Efek Indonesia (Studi Kasus pada Perusahaan Manufaktur Sub Sektor Otomotif yang Terdaftar di BEI Tahun 2017-2019. Soetomo Accounting Review, 1(2), 228-251. https://doi.org/ 10.25139/sacr.v1i2.6075
  14. Fernández-Rodríguez, Elena & García-Fernández, Roberto & Martínez-Arias, Antonio. (2019). Influence of Ownership Structure on the Determinants of Effective Tax Rates of Spanish Companies. Sustainability. 11. 1441. doi: 3390/su11051441.
  15. Fernández-Rodríguez, E., García-Fernández, R., & Martínez-Arias, A. (2021). Business and institutional determinants of Effective Tax Rate in emerging economies. Economic Modelling, 94, 692–702. doi:10.1016/j.econmod.2020.02.011
  16. Firmanzah, Adetiya & Marsoem, Bambang. (2023). The Effect of Profitability, Leverage, Firm Size, and Related Party Transactions on Tax Avoidance with Earnings Management as a Moderating Variable. Journal of Economics, Finance and Management Studies. doi: 10.47191/jefms/v6-i1-29.
  17. Gavana, G., Gottardo, P. and Moisello, A.M. (2022), Related party transactions and earnings management in family firms: the moderating role of board characteristics. Journal of Family Business Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFBM-07-2022-0090
  18. Gunawan, C. T., & Surjandari, D. A. (2022). The Effect of Transfer Pricing, Capital Intensity, and Earnings Management on Tax Avoidance. Journal of Economics, Finance and Accounting Studies, 4(2), 184–190. https://doi.org/10.32996/jefas.2022.4.2.14
  19. Jensen, M., & Meckling. (1986). Theory of the Firm : Manajerial Behavior ; Agency Cost and Ownership Structure
  20. Joko, Susilo., Syarifah, Ratih, Kartika, Sari. (2022). Analisis Faktor Yang Mempengaruhi Manajemen Pajak Dengan Indikator Effective Tax Rate (ETR). Jurnal Ilmu – Ilmu Akuntansi Merdeka, 3(1):21-27. doi: 10.33319/jamer.v3i1.76
  21. Kenny, A & Yola, V. (2022). Corporate Governance Structure, Political Connections, and Transfer Pricing on Tax Aggressiveness. Sriwijaya international journal of dynamic economics and business, 6(1):51-51. doi: 10.29259/sijdeb.v6i1.51-72
  22. Kothari, S. P., Leone, A. J., & Wasley, C. E. (2005). Performance matched discretionary accrual measures. Journal of Accounting and Economics, 39(1), 163–197. doi:10.1016/j.jacceco.2004.11.002 10.1016/j.jacceco. 11. 002
  23. Kothari, S. P., Mizik, N., & Roychowdhury, S. (2016). Managing for the Moment: The Role of Earnings Management via Real Activities versus Accruals in SEO Valuation. The Accounting Review, 91(2), 559–586. doi:10.2308/accr-51153
  24. Kraus, A., & Litzenberger, R. H. (1973). A State-Preference Model of Optimal Financial Leverage. The Journal of Finance, 28(4), 911–922. https://doi.org/10.2307/2978343
  25. Lahav, Y., & Salganik-Shoshan, G. (2016). Measuring and Characterizing the Domestic Effective Tax Rate of US Corporations. Advances in Taxation, 33–57. doi:10.1108/s1058-749720160000023001
  26. Medioli, A., Azzali, S. and Mazza, T. (2023), “High ownership concentration and income shifting in multinational groups”, Management Research Review, Vol. 46 No. 1, pp. 82-99. https://doi.org/10.1108/MRR-02-2021-0141
  27. Meila, K. D., & Jaelani, A. D. (2022). Pengaruh Transfer Pricing dan Capital Intesity terhadap Cash Effective Rate. Economics Professional in Action (E-PROFIT), 4(2), 115–125. https://doi.org/10.37278/eprofit.v4i2.527
  28. Nabilah, N., Kartiko, N. D., & Rachmi, I. F. (2022). Influence of Related Party Transaction, CEO Narcissism, and Political Connection to Tax Avoidance on Manufacturing Companies in The Consumer Goods Industry Sector Listed On The Indonesia Stock Exchange For The Period 2017-2019. Journal of Management Science (JMAS), 5(1), 13-20. https://doi.org/10.35335/jmas.v5i1.123
  29. Nashir, Muhammad & A, Nuraini & Priantana, Riha. (2023). The Influence of Political Connections, Related-Party Transactions, and Corporate Governance on Tax Avoidance in Manufacturing Companies Listed on the Indonesia Stock Exchange. Journal Research of Social Science, Economics, and Management. 3.390-402.doi: 59141/jrssem.v3i02.549.
  30. Nawang, Kalbuana., Solihin, Solihin., Yohana, Yohana., Devia, Rahma, Yanti. (2020). The influence of capital intensity, firm size, and leverage on tax avoidance on companies registered in jakarta islamic index (jii) period 2015-2019. International Journal of Economics, Business and Accounting Research (IJEBAR) Vol. 4(03) doi: 10.29040/IJEBAR.V4I03.1330
  31. Nindita & Agus Bagus Budi N. (2022). Pengaruh Transaksi Pihak Berelasi terhadap Penghindaran Pajak Dengan Manajemen Laba Sebagai Variabel Moderasi. Jurnal Akuntansi dan Pajak. DOI: http://dx.doi.org/10.29040/jap.v22i2. 3798
  32. Oktaviyanti, I., & Sumartik, S. (2023). The Pecking Order Theory Perspective in the Study of Company Capital Structure (Study on Manufacturing Companies On The Indonesia Stock Exchange). JBMP (Jurnal Bisnis, Manajemen dan Perbankan), 9(1), 53-62.
  33. Pajriansyah, R., & Firmansyah, A. (2017). Pengaruh leverage, kompensasi rugi fiskal dan manajemen laba terhadap penghindaran pajak. Keberlanjutan: Jurnal Manajemen Dan Jurnal Akuntansi, 2(1), 431-459. DOI: http://dx.doi.org/10.32493/keberlanjutan.v2i1.y2017.p431-459
  34. Panda, A. K., & Nanda, S. (2020). Receptiveness of effective tax rate to firm characteristics: an empirical analysis on Indian listed firms. Journal of Asia Business Studies, ahead-of-print(ahead-of-print). doi:10.1108/jabs-11-2018-0304
  35. Peraturan Menteri Keuangan Republik Indonesia. Nomor 22/PMK.03/2020 Tentang Tata Cara Pelaksanaan Kesepakatan Harga Transfer (Advance Pricing Agreement)
  36. Rani, S., Susetyo, D., & Fuadah, L. L. (2018). The effects of the corporate’s characteristics on tax avoidance moderated by earnings management (Indonesian evidence). Journal of Accounting, Finance and Auditing Studies, 4(3), 149-169.
  37. Refgia, T., Ratnawati, V., & Rusli, R. (2016). Pengaruh Pajak, Mekanisme Bonus, Ukuran Perusahaan, Kepemilikan Asing, Dan Tunneling Incentive Terhadap Transfer Pricing (Perusahaan Sektor Industri Dasar Dan Kimia Yang Listing Di BEI Tahun 2011-2014). Jurnal Online Mahasiswa Fakultas Ekonomi Universitas Riau, 4(1), 543–555.
  38. Richardson, G., & Lanis, R. (2007). Determinants of the variability in corporate effective tax rates and tax reform: Evidence from Australia. Journal of Accounting and Public Policy, 26(6), 689–704. doi:10.1016/j.jaccpubpol. 2007.10.003
  39. Rini, Utami., Endang, Mahpudin. (2021). The effect of leverage, capital intensity, and inventory intensity on effective tax rate. E-Jurnal Ekonomi dan Bisnis Universitas Udayana Vol. 10 No. 01, January 2021, pages: 1-10. DOI: https://doi.org/10.24843/EEB.2021.v10.i01.p01
  40. Shella & Adler (2019)
  41. Stamatopoulos, I., Hadjidema, S., & Eleftheriou, K. (2019). Explaining corporate effective tax rates: Evidence from Greece. Economic Analysis and Policy. doi:10.1016/j.eap.2019.03.004
  42. Sudaryono, Driya & Murwaningsari, Etty. (2023). The Effect of Transfer Pricing, Intangible Assets and Capital Intensity on Tax Aggresiveness with Foreign Ownership as A Moderating Variable. International Journal of Economic, Business, Accounting, Agriculture Management and Sharia Administration (IJEBAS). 3. 222-238. DOI:54443/ijebas.v3i1.665.
  43. Sulistyanto, H. Sri. (2018). Manajemen Laba: Teori dan Model Empiris. Jakarta: Grasindo.
  44. Suprianto, D., & Pratiwi, R. (2017). Pengaruh Beban Pajak, Kepemilikan Asing, Dan Ukuran Perusahaan Terhadap Transfer Pricing pada Perusahaan Maufaktur di Bursa Efek Indonesia (BEI) Periode 2013 – 2016. Jurnal Akuntansi STIE Multi Data Palembang, 1–15.
  45. Tanko, U.M. (2023). Financial attributes and corporate tax planning of listed manufacturing firms in Nigeria: moderating role of real earnings management. Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-05-2022-0198
  46. Tjandrakirana, R., Diani, E., & Ubaidillah. (2020). Tax, Debt Covenant And Exchange Rate (Analisis Atas Fenomena Transfer Pricing). 149 Jurnal Akuntansi Balance : Dan Bisnis, 5(1), https://doi.org/10.32502/jab.v5i1.2456
  47. Undang-Undang RI. (2007). Undang-Undang Republik Indonesia Nomor 6 Tahun 1983 Tentang Ketentuan Umum Dan Tata Cara Perpajakan Sebagaimana Telah Beberapa Kali Diubah Terakhir Dengan Undang-Undang Republik Indonesia Nomor 11 Tahun 2020.
  48. Viard, Alan D., Statutory and Effective Tax Rates: Part 1 (August 20, 2012). Tax Notes, Vol. 136, No. 8, 2012, Available at SSRN: https://ssrn.com/abstract=2217946
  49. Vika, Rahmawati., Titik, Mildawati. (2020). Pengaruh Size, Leverage, Profitability, Dan Capital Intensity Ratio Terhadap Effective Tax Rate (Etr). Jurnal Riset Keuangan dan Akuntansi Vol. 5(2) doi: 10.25134/JRKA.V5I2.2008
  50. Wafiroh, N. L., & Hapsari, N., (2016). Pajak, Tunneling Incentive Dan Mekanisme Bonus Pada Keputusan Transfer Pricing. El Muhasaba: Jurnal Akuntansi, Vol.2, No. 6, pg 157.

How to Cite :

Moderating Role of Earnings Management on Leverage and Related Party Transactions Influence on the Effective Corporate Tax Rate (ETR) in Indonesian Stock Exchange Listed Industrial Companies for Periods of 2018 – 2022. Evita Nora Manik, Fahmi Natigor Nasution, Yeni Absah , 7(6), 4233-4245. Retrieved from https://ijcsrr.org/single-view/?id=17247&pid=16658

Most read articles by the same author(s)

Evita Nora Manik , Fahmi Natigor Nasution , Yeni Absah ,

View

65

Citation

Downloads

Article Details