The effect of female percentage and audit committee characteristics on tax avoidance: audit quality as a moderating variable

Hamza Kamel Qawqzeh and Mo’taz Kamel Al Zobi

Accounting Research Journal, 2025, vol. 38, issue 3-4, 510-526

Abstract: PurposeThis study aims to examine the association between the various characteristics of audit committee (AC) (female percentage, size, expertise and independence) and tax avoidance (TA) activities and investigate the moderating effect of audit quality on the AC characteristics–TA relationship.Design/methodology/approachThis study used the secondary data of the listed institutions in Amman Stock Exchange (2009–2021), whereby the effective tax rate (ETR) was used as a measurement of the TA. In addition, the data set used in this study was provided by the ASE website.FindingsThe results revealed that AC size has a positive and significant effect on TA. By contrast, the percentage of the female in AC and AC expertise have a negatively significant influence on TA. Further, AC independence was found to have an insignificant influence on TA. The results also showed that audit quality moderates the AC characteristics–TA relationship.Research limitations/implicationsThis study is motivated by the decisions of the Jordanian government to reduce TA behaviors and enhance tax revenue collected from various institutions. Consequently, the outcomes provide significant implications for the Jordanian listed companies to enhance the AC function and big audit firms in constraining and restricting TA behaviors.Practical implicationsThis study contributes to the existing literature by examining the effect of under-researched mechanisms such as female percentage and AC characteristics. It also presents significant insights into the conflicting outcomes on AC characteristics and audit quality with TA in Jordan.Originality/valueThis study extends the existing literature by investigating the direct and indirect effects of AC characteristics and audit quality on TA. Therefore, this is a pioneering study investigating the joint impact of the AC characteristics on TA. It also determines whether women are indeed more likely to avoid risks. To the best knowledge of the authors, this is the first study that investigates the interaction effects between AC characteristics and audit quality on the TA behaviors in Jordan.

Keywords: Tax avoidance; AC characteristics; Percentage of females; Audit quality; Effective tax rate (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arjpps:arj-11-2024-0367

DOI: 10.1108/ARJ-11-2024-0367

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