Abstract:
This paper examines the effect of CEO's publicity and executive
preference risk tendencies regarding corporate tax avoidance. Moreover, it aims
to test the moderating effect of audit committee size on the relationship between
CEO's publicity and tax avoidance as well as the relationship between executive
preference risk and tax avoidance. By using a sample from real estate and property
sector as well as mining sector that were listed on Indonesia Stock Exchange with
research observation from the period 2017–2021, the findings indicate support for
our hypotheses. Specifically, CEO's publicity is positively related to tax
avoidance. Publicity gain by investor attention is considered a personality trait
that causes CEOs to implement tax avoidance strategies. Executive preference risk
is positively related to tax avoidance. Executive who has characteristic as risk
taker causes executive to implement Tax avoidance strategies. However, this
discretional behavior is constrained by audit committee size. Firms with larger
audit committees help to control the consequences of CEO and executive on tax
avoidance. Therefore, audit committee effectiveness is critical in monitoring
managerial decisions related to tax avoidance.
