Examining the Impact of Institutional Ownership and Audit Fee Stickiness on Tax Avoidance in State-Owned Enterprises in Indonesia (2019–2022)
Abstract
This study examines the influence of institutional ownership and audit fee stickiness on tax avoidance in state-owned enterprises (SOEs) listed on the Indonesia Stock Exchange during the 2019–2022 period. The research adopts a quantitative approach using secondary data obtained from official financial reports and processed through multiple linear regression analysis with SPSS version 29. Institutional ownership refers to the proportion of company shares held by institutional investors such as insurance firms, investment companies, and banks, which are expected to play a critical role in monitoring managerial behavior. Audit fee stickiness, on the other hand, represents the condition where changes in expected audit fees are not matched by actual changes, often due to long-term audit engagements and client-auditor relationships. The results of this study indicate that institutional ownership has a significant positive effect on tax avoidance, suggesting that firms with high levels of institutional ownership tend to adopt more aggressive tax planning strategies. This may stem from institutional pressure to maximize shareholder value through reduced tax burdens. Additionally, audit fee stickiness also shows a significant positive relationship with tax avoidance, implying that inflexible audit pricing may reflect increased audit complexity and risk exposure, which correlate with tax-motivated financial reporting behaviors. This study contributes to the literature by providing empirical evidence on how corporate governance mechanisms and audit dynamics affect tax strategies within SOEs in a developing country context. The findings align with agency theory, which explains the conflict of interest between management (agents) and government or public stakeholders (principals), especially regarding financial transparency and tax compliance. Implications of this study are valuable for regulators and policymakers aiming to improve audit oversight and corporate governance in the public sector.
Keywords
Full Text:
PDFReferences
Ayu Hastuti. (2021). The effect of accounting conservatism and profitability on tax avoidance in state-owned companies listed on the Indonesian Stock Exchange in 2014–2018 [Master’s thesis, University of Macedonia]. https://dspace.lib.uom.gr/handle/2159/26192
Alviyani, K., Solar, R., & Rofika, R. (2016). The influence of order management, executive character, company size, and leverage on tax avoidance (a study on agriculture and mining companies listed on the IDX in 2011–2014) [Undergraduate thesis, University of Riau].
Annisa, A. N., & Kurniasih, L. (2012). The influence of corporate governance on tax avoidance. Jurnal Akuntansi dan Auditing, 8(2), 123–136.
Antikasari, L. D., Fajri, R. N., & Dewi, R. R. (2020). Determinants of financial performance viewed from good corporate governance, leverage, and company size (State-owned enterprises listed on IDX 2013–2018). Owner: Riset dan Jurnal Akuntansi, 4(2), 336–345.
Aminah, A., Chairina, C., & Sari, Y. Y. (2017). The influence of company size, fixed asset intensity, leverage, profitability, and political connection on tax avoidance. AFEBI Accounting Review, 2(2), 30–43. https://doi.org/10.47312/aar.v2i02.88
Anindyka, D., Pratomo, D., & Kurnia. (2018). The effect of leverage (DAR), capital intensity, and inventory intensity on tax avoidance. E-Proceeding of Management, 5(1), 713–719.
Adhikari, A., Derashid, C., & Zhang, H. (2006). Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia. Journal of Accounting and Public Policy, 25(5), 574–595. https://doi.org/10.1016/j.jaccpubpol.2006.07.001
Budianti, S., & Kari, K. (2018, October). The effect of profitability, liquidity, and capital intensity on tax avoidance. In Proceedings of the National Seminar of Scholars (pp. 1205–1209).
Burta, F. S. (2018). The effect of good corporate governance implementation and financial distress level on earnings management practices with sticky cost as a moderating variable. Jurnal Ilmu Ekonomi dan Bisnis, 1, 430–439.
Budiman, J., & Setiyono. (2012, September). The influence of executive characteristics on tax avoidance. In Proceeding of the XV National Accounting Symposium, Banjarmasin.
Cai, H., & Liu, Q. (2009). Competition and corporate tax avoidance: Evidence from Chinese industrial firms. The Economic Journal, 119(537), 764–795. https://doi.org/10.1111/j.1468-0297.2009.02217.x
Chen, S., Chen, X., Cheng, Q., & Shevlin, T. (2010). Are family firms more tax aggressive than non-family firms? Journal of Financial Economics, 95(1), 41–61.
Chen, K. P., & Chu, C. Y. C. (2010). Internal control vs external manipulation: A model of corporate income tax evasion. RAND Journal of Economics, 41(1), 151–173.
Damayanti, F., & Susanto, T. (2015). The influence of audit committee, institutional ownership, corporate risk, and return on assets on tax avoidance. Jurnal Akuntansi, 5(2), 187–206.
Djasuli, M. (2013). The influence of good corporate governance, debt level, profitability, and company size on dividend policy: A study of state-owned companies listed on the IDX. Jurnal Pamator: Jurnal Ilmiah Universitas Trunojoyo, 6(1).
Ependi, H. (2020). The influence of sales growth, profitability, leverage, company size, accounting conservatism, fixed asset intensity, and corporate governance on tax avoidance of state-owned companies listed on the IDX (Focus on financial services companies). Prisma: Research Platform for Accounting Students, 1(1), 79–85.
Fachri, S., Sulistiana, I., & Mubarok, M. S. (2021). The influence of profitability and corporate governance on tax avoidance in state-owned companies listed on the IDX (2014–2018). Jurnal Akuntansi dan Perpajakan, 21(2).
Hery, S. E. (2017). Accounting theory: Conceptual and analytical approaches. Gramedia Widiasarana Indonesia.
Hu, N. (2018). Tax avoidance, property rights, and audit fees. American Journal of Industrial and Business Management, 8(3), 461–472. https://doi.org/10.4236/ajibm.2018.83030
I Wayan, K., & Sri, W. D. (2018). The influence of executive character, company characteristics, and corporate governance on tax avoidance. Jurnal KRISNA: Kumpulan Riset Akuntansi, 10(1), 1–13. http://dx.doi.org/10.22225/kr.10.1.708.1-13
Mulyani, S., Wijayanti, A., & Masitoh, E. (2018). The influence of corporate governance on tax avoidance (a study on mining companies listed on the IDX). Airlangga Journal of Accounting and Business Research, 3(1), 322–340.
Suak, M., Sondakh, J. J., & Gamaliel, H. (2021). The effect of tax planning, earnings growth, asset management, and sticky costs on firm value (study on property and real estate companies listed on IDX 2016–2019). Jurnal Riset Akuntansi dan Auditing "Goodwill", 12(2), 142–152.
Manurung, V. L., & Hutabarat, F. (2020). The influence of corporate governance on tax avoidance with liquidity as a mediating variable in state-owned companies listed on IDX (2017–2019). Going Concern: Jurnal Riset Akuntansi, 15(3), 478–487. https://doi.org/10.32400/gc.15.3.30275.2020
Mira, & Situmorang, B. (2021). The influence of accounting conservatism and profitability on tax avoidance in mining companies listed on IDX (2017–2019). Jurnal Profita: Akuntansi dan Manajemen, 1(1), 1–9.
Riskina, S. F. (2021). The influence of institutional ownership, managerial ownership, board independence, and leverage on tax avoidance: An empirical study on mining companies listed on IDX (2016–2019). Proceedings: Economics and Business, 1(1), 705–719. https://jurnal.ubd.ac.id/index.php/pros/article/view/1147
Robin, Anggara, Tandrean, & A. (2021). The effect of company size, profitability, leverage, and sales growth on tax avoidance (Trading companies listed on IDX 2014–2019). Jurnal Ilmu MEA, 5(2), 1232–1246.
Safitri, K. A., & Muid, D. (2020). The influence of CSR disclosure, profitability, leverage, capital intensity, and company size on tax avoidance. Diponegoro Journal of Accounting, 9(4), 1–11. http://ejournal-s1.undip.ac.id/index.php/accounting
Sakhiya, R. E., & Suwarti, T. (2022). The influence of accounting conservatism, corporate governance, and sales growth on tax avoidance. Equilibrium: Jurnal Studi Pendidikan dan Ekonomi, 19(1), 1–10. https://journal.uniku.ac.id/index.php/Equilibrium
Wanda, A. P., & Halimatusadiah, E. (2021). The effect of solvency and profitability on tax avoidance. Journal of Accounting Research, 1(1), 59–65. https://doi.org/10.29313/jra.v1i1.194
Winata, F. (2014). The influence of corporate governance on tax avoidance in companies listed on the IDX in 2013. Tax & Accounting Review, 4(1), 162.
DOI: https://doi.org/10.26618/jrp.v8i1.18251
Refbacks
- There are currently no refbacks.

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
View My Stats