The Influence Of Audit Quality On Tax Avoidance Carried Out By Companies As Taxpayers: Literature Review

Abstract

Taxes are the most important sector to support the country's budget. Tax benefits for financing domestic  infrastructure development play a vital role. Various types of businesses have mushroomed in Indonesia with various  types, making the tax revenue sector must be monitored properly. Tax reporting in Indonesia cannot be separated from  the role of external auditors in obtaining fairness of audits in their financial reports. The Company carries out a series  of strategies to obtain as much profit as possible by paying reasonable taxes. However, the company's desire to  implement an accountable accounting system sometimes encounters a series of polemics, resulting in decisions  regarding tax avoidance. This study aims to investigate the relationship between audit quality and tax avoidance  practices by companies. Audit quality is a key factor that can influence a company's decision to manage its tax  obligations. In academic literature, audit quality is often measured through auditor independence, competence,  experience and thoroughness in conducting audits. Tax avoidance, on the other hand, is a legal strategy used by  companies to reduce their tax liabilities, often through legal loopholes or aggressive interpretations of tax regulations.  Previous research shows that audit quality can limit this tax avoidance practice by increasing the transparency of  financial reports and company compliance with applicable tax regulations