The impact Accounting.of ownership structure on the relationship between audit fees and tax avoidance in listed companies in Iraq
Abstract
This study investigates the impact of ownership structure on the relationship between audit fees and tax avoidance in listed companies in Iraq over the period from 2016 to 2022. Utilizing a sample of listed firms during this timeframe, the research examines four hypotheses derived from existing literature. Firstly, it posits a positive significant correlation between audit fees and tax avoidance, suggesting that companies paying higher audit fees are more likely to engage in tax avoidance practices. Secondly, the study suggests that managerial ownership moderates this relationship in a decreasing direction, indicating that higher levels of managerial ownership may mitigate the propensity for tax avoidance when audit fees are elevated. Thirdly, it hypothesizes that institutional ownership moderates the relationship in an increasing direction, implying that firms with higher institutional ownership might be more prone to engaging in tax avoidance practices when audit fees are higher. Lastly, the research proposes that ownership concentration moderates the relationship in an increasing direction, suggesting that firms with concentrated ownership structures may intensify tax avoidance activities when investing more in audit services. The empirical findings support all four hypotheses, revealing the nuanced influence of ownership structure on the interplay between audit fees, tax avoidance, and corporate governance practices within the Iraqi capital market. These results offer insights for policymakers, regulators, and practitioners aiming to enhance transparency, accountability, and investor confidence in listed companies in Iraq.
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