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The mediation effects of financial distress on the relationship between capital intensity and return on assets towards corporate tax avoidance / Siti Nasuha Muhmad, Che Ku Hisam Che Ku Kassim and Nur Raihana Mohd Sallem

This paper investigated the relationship of capital intensity (CAPINT) and return on assets (ROA) on corporate tax avoidance (CTA) level among public listed companies. However, prior literature has failed to recognise the role of financial distress (FDR) in influencing the relationship between firm...

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Main Authors: Muhmad, Siti Nasuha, Che Ku Kassim, Che Ku Hisam, Mohd Sallem, Nur Raihana
Format: Article
Language:English
Published: UiTM Press 2024
Subjects:
Tax evasion
Online Access:https://ir.uitm.edu.my/id/eprint/109339/1/109339.pdf
https://ir.uitm.edu.my/id/eprint/109339/
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spelling my.uitm.ir.1093392025-01-20T04:36:36Z https://ir.uitm.edu.my/id/eprint/109339/ The mediation effects of financial distress on the relationship between capital intensity and return on assets towards corporate tax avoidance / Siti Nasuha Muhmad, Che Ku Hisam Che Ku Kassim and Nur Raihana Mohd Sallem mar Muhmad, Siti Nasuha Che Ku Kassim, Che Ku Hisam Mohd Sallem, Nur Raihana Tax evasion This paper investigated the relationship of capital intensity (CAPINT) and return on assets (ROA) on corporate tax avoidance (CTA) level among public listed companies. However, prior literature has failed to recognise the role of financial distress (FDR) in influencing the relationship between firm characteristics and CTA. Therefore, this paper enriches the existing literature by providing evidence on the role of FDR as a mediator in exploring the influence of company characteristics on CTA level. A balanced panel data set of 477 firm years-observations for the period from 2010 to 2019 was used. The data was retrieved from ThompsonOne Data Stream database. The statistical results confirmed a significant relationship between CAPINT and ROA with CTA level. This implied that such corporate traits can be used as a red flag to identify aggressive tax planners, who can then be investigated further for potential tax fraud. Moreover, it was also evident that FDR had a considerable effect on the relationship between CAPINT and ROA towards CTA level among the sampled companies. Because prior studies have often focused on the relationship between financial determinants and CTA, there appeared to be a dearth of studies stressing the mediating effects of FDR on the relationship between company characteristics and the extent of CTA. UiTM Press 2024-12 Article PeerReviewed text en https://ir.uitm.edu.my/id/eprint/109339/1/109339.pdf The mediation effects of financial distress on the relationship between capital intensity and return on assets towards corporate tax avoidance / Siti Nasuha Muhmad, Che Ku Hisam Che Ku Kassim and Nur Raihana Mohd Sallem. (2024) Management & Accounting Review (MAR) <https://ir.uitm.edu.my/view/publication/Management_=26_Accounting_Review_=28MAR=29/>, 23 (3): 17. pp. 335-354. ISSN 2550-1895
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic Tax evasion
spellingShingle Tax evasion
Muhmad, Siti Nasuha
Che Ku Kassim, Che Ku Hisam
Mohd Sallem, Nur Raihana
The mediation effects of financial distress on the relationship between capital intensity and return on assets towards corporate tax avoidance / Siti Nasuha Muhmad, Che Ku Hisam Che Ku Kassim and Nur Raihana Mohd Sallem
description This paper investigated the relationship of capital intensity (CAPINT) and return on assets (ROA) on corporate tax avoidance (CTA) level among public listed companies. However, prior literature has failed to recognise the role of financial distress (FDR) in influencing the relationship between firm characteristics and CTA. Therefore, this paper enriches the existing literature by providing evidence on the role of FDR as a mediator in exploring the influence of company characteristics on CTA level. A balanced panel data set of 477 firm years-observations for the period from 2010 to 2019 was used. The data was retrieved from ThompsonOne Data Stream database. The statistical results confirmed a significant relationship between CAPINT and ROA with CTA level. This implied that such corporate traits can be used as a red flag to identify aggressive tax planners, who can then be investigated further for potential tax fraud. Moreover, it was also evident that FDR had a considerable effect on the relationship between CAPINT and ROA towards CTA level among the sampled companies. Because prior studies have often focused on the relationship between financial determinants and CTA, there appeared to be a dearth of studies stressing the mediating effects of FDR on the relationship between company characteristics and the extent of CTA.
format Article
author Muhmad, Siti Nasuha
Che Ku Kassim, Che Ku Hisam
Mohd Sallem, Nur Raihana
author_facet Muhmad, Siti Nasuha
Che Ku Kassim, Che Ku Hisam
Mohd Sallem, Nur Raihana
author_sort Muhmad, Siti Nasuha
title The mediation effects of financial distress on the relationship between capital intensity and return on assets towards corporate tax avoidance / Siti Nasuha Muhmad, Che Ku Hisam Che Ku Kassim and Nur Raihana Mohd Sallem
title_short The mediation effects of financial distress on the relationship between capital intensity and return on assets towards corporate tax avoidance / Siti Nasuha Muhmad, Che Ku Hisam Che Ku Kassim and Nur Raihana Mohd Sallem
title_full The mediation effects of financial distress on the relationship between capital intensity and return on assets towards corporate tax avoidance / Siti Nasuha Muhmad, Che Ku Hisam Che Ku Kassim and Nur Raihana Mohd Sallem
title_fullStr The mediation effects of financial distress on the relationship between capital intensity and return on assets towards corporate tax avoidance / Siti Nasuha Muhmad, Che Ku Hisam Che Ku Kassim and Nur Raihana Mohd Sallem
title_full_unstemmed The mediation effects of financial distress on the relationship between capital intensity and return on assets towards corporate tax avoidance / Siti Nasuha Muhmad, Che Ku Hisam Che Ku Kassim and Nur Raihana Mohd Sallem
title_sort mediation effects of financial distress on the relationship between capital intensity and return on assets towards corporate tax avoidance / siti nasuha muhmad, che ku hisam che ku kassim and nur raihana mohd sallem
publisher UiTM Press
publishDate 2024
url https://ir.uitm.edu.my/id/eprint/109339/1/109339.pdf
https://ir.uitm.edu.my/id/eprint/109339/
_version_ 1823097900220022784
score 13.239859

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