Mienati Somya Lasmana and Wiwiek Dianawati and Dian Agustia (2019) CSR Disclosure, Tax Avoidance and Creative Accounting Practice: Evidence from Indonesia. International Journal of Innovation, Creativity and Changes, 9 (8). pp. 300-316. ISSN 2201-1315, eISSN: 2201-1323

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Abstract

This study is aimed to evaluate the relationship of CSR disclosure to tax avoidance with creative accounting practice as a mediating variable. Expenses for corporate social responsibility can reduce tax payments, so companies try to increase tax avoidance. Huseynov and Klamm (2012) stated that if the company carries out avoidance, it affects the level of profitability even though the company is required to generate maximum profit for the owner. Therefore, performance reporting is not simple because of conflicts of interest. This study uses a quantitative approach where path analysis is applied with SPSS version 20 software (Ghozali, 2013). Samples taken for this study are the Indonesian companies listed in Indonesia Stock Exchange (IDX) in 2014-2016 by purposive sampling method. Creative accounting practice is positioned as a mediating variable that relates between the independent variable, corporate social responsibility disclosure, and the dependent variable, tax avoidance. The results of this study found that CSR disclosure has a negative effect on creative accounting practice. CSR disclosure also has a negative effect on tax avoidance. Creative accounting practice has an insignificant effect on tax avoidance. So, creative accounting practice cannot mediate the association of CSR disclosure to tax avoidance indirectly.

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