Accounting and Auditing Research

Accounting and Auditing Research

The Impact of Accounting Information Quality on Tax Avoidance Based on Political Relations

Document Type : Original Article

Authors
Mahdi Kazemioloum 1
Mohsen Khotanlou 1
Amin Sohrabi 2
1 Department of Accounting, Faculty of Economics and Social Science, Bu-Ali Sina University, Hamedan, Iran
2 Senior Auditor, Iranian National Tax Administration, Hamedan, Iran
10.22034/iaar.2026.251785
Abstract
According to the theory of political interests, companies and managers affiliated with government or political institutions may tend to avoid or reduce taxes. Companies strongly desire to establish close relationships with the government and politicians because these relationships bring many benefits. Self-interest and political motivations are strongly related to companies' decisions, especially in the behaviors related to tax avoidance. Based on this, this research aims to investigate the effect of political connections on tax avoidance, emphasizing the moderating role of accounting information quality. To achieve this goal and test the research hypotheses, 160 Tehran Stock Exchange-accepted companies’ data was collected from 2015 to 2022 and examined and tested with the multiple regression approach. The research results show a direct and significant relationship between political connections and tax avoidance. So, with the increase in political connections, the amount of tax avoidance also increases. Also, the results indicate that the quality of accounting information significantly moderates the relationship between political connections and tax avoidance. The test of the robustness of the results using the generalized moments approach also confirms the significant effect of the quality of accounting information on the relationship between political connections and tax avoidance and strengthens the robustness of the results. According to the research findings, the quality of accounting information is an effective tool in controlling tax avoidance activities and weakens the relationship between political connections and tax avoidance.
Keywords
Political connections
Tax Avoidance
Quality of Accounting Information
1.       افلاطونی، عباس. (1402). کاربرد اقتصادسنجی در پژوهش‌های کمی حسابداری. چاپ اول، تهران، انتشارات ترمه.
2.       جلالی، فاطمه، هشی، عباس، دانشی، وحید، کامرانی، هدی. (1399). «بررسی ارتباط بین عدم اطمینان محیطی، مالکیت نهادی و اجتناب مالیاتی». تحقیقات حسابداری و حسابرسی، 12(46)، 133–146.
3.       حصنی‌مقدم، فاطمه، طالب‌نیا، قدرت‌اله. (1403). «طراحی الگوی تمکین مالیاتی شرکت‌ها با توجه به نقش دولت و نقش میانجی شرایط اقتصادی». تحقیقات حسابداری و حسابرسی، 16(62)، 203–222.
4.       رشیدی، محسن، محمدی‌راد، مهرشاد. (1399). «بررسی انگیزه‌های اجتناب مالیاتی در شرکت‌های دارای سهام‌دار دولتی بر مبنای دوره تصدی مدیرعامل». پژوهشنامه مالیات، 28(45)، 37–58.
5.       قادری، بهمن، کفعمی، مهدی، کریمی حصاری، فرشاد. (1397). «بررسی تأثیر عوامل مالی و غیرمالی مؤثر بر شکاف مالیاتی». چشم‌انداز حسابداری و مدیریت، 1(2)، 1–16.
6.       کاظمی سراسکانرود، زهرا، شیرخدایی، میثم. (1402). «تأثیر روابط سیاسی بر اجتناب مالیاتی: نقش تعدیلگر مسئولیت اجتماعی منابع انسانی در شرکت‌های کوچک و متوسط در بورس اوراق بهادار تهران». مدیریت منابع انسانی پایدار، 5(9)، 33–48.
7.       مهدی‌فرد، محمدرضا، رویایی، رمضانعلی. (1394). «مدیریت سیاسی و قیمت سهام شرکت‌های پذیرفته‌شده در بورس اوراق بهادار: آزمون نظریه اقتصاد سیاسی». دانش مالی تحلیل اوراق بهادار، 8(25)، 19–28.
8.       Abdul Wahab, E. A., Ariff, A. M., Madah Marzuki, M., Mohd Sanusi, Z. (2017). “Political Connections, Corporate Governance, and Tax Aggressiveness in Malaysia.” Asian Review of Accounting, 25(3), 424–451.
9.       Ajili, H., Khlif, H. (2020). “Political Connections, Joint Audit and Tax Avoidance.” Journal of Financial Crime, 27(1), 155–171.
10.    Alfiyah, N., Subroto, B., Ghofar, A. (2022). “Is Tax Avoidance Caused by Political Connections and Executive Characteristics?” Jurnal Akuntansi Multiparadigma, 13(1), 32–41.
11.    Alsmady, A. A. (2022). “Accounting Information Quality and Tax Avoidance Effect on Investment Opportunities: Evidence from Gulf Cooperation Council Countries.” Cogent Business & Management, 9(1), Article 2143020.
12.    Alsmady, A. A. (2023). “The Effect of Political Connection on Corporate Tax Avoidance.” Journal of Governance and Regulation, 12(1), 333–347.
13.    Annuar, H. A., Salihu, I. A., Obid, S. N. S. (2014). “Corporate Ownership, Governance and Tax Avoidance: An Interactive Effect.” Procedia—Social and Behavioral Sciences, 164, 150–160.
14.    Aronmwan, E. J., Okafor, C. (2019). “Corporate Tax Avoidance: Review of Measures and Prospects.” International Journal of Accounting & Finance, 8(2), 21–42.
15.    Bataineh, A. (2021). “Does the Tax System Reduce Tax Evasion in Light of the Governance Mechanisms?” Research in World Economy, 12(2), 99–112.
16.    Bradshaw, M., Liao, G., Ma, M. (2019). “Agency Costs and Tax Planning When the Government Is a Major Shareholder.” Journal of Accounting and Economics, 67(2–3), 255–277. DOI: https://doi.org/10.1016/j.jacceco.2018.10.002
17.    Bushman, R. M., Smith, A. J. (2001). “Financial Accounting Information and Corporate Governance.” Journal of Accounting and Economics, 32(1–3), 237–333.
18.    Butje, S., Tjondro, E. (2014). “Pengaruh Karakter Eksekutif dan Koneksi Politik terhadap Tax Avoidance.” Tax Accounting Review, 4(2), 1–9.
19.    Chaney, P. K., Faccio, M., Parsley, D. (2011). “The Quality of Accounting Information in Politically Connected Firms.” Journal of Accounting and Economics, 51(1–2), 58–76.
20.    Chen, H., Tang, S., Wu, D., Yang, D. (2021). “The Political Dynamics of Corporate Tax Avoidance.” The Accounting Review, 96(5), 157–180.
21.    Chen, T., Lin, C. (2017). “Does Information Asymmetry Affect Corporate Tax Aggressiveness?” Journal of Financial and Quantitative Analysis, 52(5), 2053–2081.
22.    Chen, X., Hu, N., Wang, X., Tang, X. (2014). “Tax Avoidance and Firm Value: Evidence from China.” Nankai Business Review International, 5(1), 25–42.
23.    Dechow, P. M., Dichev, I. D. (2002). “The Quality of Accruals and Earnings: The Role of Accrual Estimation Errors.” The Accounting Review, 77(S-1), 35–59.
24.    Desai, M. A., Dharmapala, D. (2006). “Corporate Tax Avoidance and High-Powered Incentives.” Journal of Financial Economics, 79(1), 145–179.
25.    Desai, M. A., Dyck, A., Zingales, L. (2007). “Theft and Taxes.” Journal of Financial Economics, 84(3), 591–623.
26.    Faccio, M. (2010). “Differences Between Politically Connected and Nonconnected Firms: A Cross-Country Analysis.” Financial Management, 39(3), 905–928.
27.    Faccio, M., Masulis, R. W., McConnell, J. J. (2006). “Political Connections and Corporate Bailouts.” The Journal of Finance, 61(6), 2597–2635.
28.    Fisman, R. (2001). “Estimating the Value of Political Connections.” American Economic Review, 91(4), 1095–1102. DOI: https://doi.org/10.1257/aer.91.4.1095
29.    Higgins, D., Omer, T., Phillips, J. (2015). “Influence of a Firm’s Business Strategy on Its Tax Aggressiveness.” Contemporary Accounting Research, 32(2), 674–702.
30.    Hillman, A. J., Withers, M. C., Collins, B. J. (2009). “Resource Dependence Theory: A Review.” Journal of Management, 35(6), 1404–1427.
31.    Huang, H. H., Lobo, G. J., Wang, C., Xie, H. (2016). “Customer Concentration and Corporate Tax Avoidance.” Journal of Banking & Finance, 72, 184–200.
32.    Jensen, M. C., Meckling, W. H. (1976). “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.” Journal of Financial Economics, 3(4), 305–360.
33.    Joni, J., Ahmed, K., Hamilton, J. (2020). “Politically Connected Boards, Family and Business Group Affiliations, and Cost of Capital: Evidence from Indonesia.” The British Accounting Review, 52(3), Article 100878.
34.    Kim, C., Zhang, L. (2016). “Corporate Political Connections and Tax Aggressiveness.” Contemporary Accounting Research, 33(1), 78–114.
35.    Lanis, R., Richardson, G. (2011). “The Effect of Board of Director Composition on Corporate Tax Aggressiveness.” Journal of Accounting and Public Policy, 30(1), 50–70.
36.    Liu, Q., Luo, W., Rao, P. (2015). “The Political Economy of Corporate Tax Avoidance.” SSRN. DOI: https://doi.org/10.2139/ssrn.2709608
37.    Ofoegbu, N. G., Odoemelam, N. (2018). “International Financial Reporting Standards (IFRS) Disclosure and Performance of Nigerian Listed Companies.” Cogent Business & Management, 5(1), Article 1542967.
38.    Oktavia, O. (2020). “Independent Corporate Governance Organs’ Activities, Tax Avoidance, and Country Tax Environment: Evidence from ASEAN Countries.” Pertanika Journal of Social Sciences and Humanities, 28(2), 1485–1505.
39.    Qingyuan, L., Lumeng, W. (2018). “Financial Statement Comparability and Corporate Tax Avoidance.” China Journal of Accounting Studies, 6(4), 448–473.
40.    Rego, S. (2003). “Tax Avoidance Activities of U.S. Multinational Corporations.” Contemporary Accounting Research, 20(4), 805–833.
41.    Resti Yulistia, M., Minovia, A. F., Anison, F. P. (2020). “Ownership Structure, Political Connection and Tax Avoidance.” International Journal of Innovation, Creativity and Change, 11(12), 497–512.
42.    Rustiarini, N. W., Sudiartana, I. M. (2021). “Board Political Connection and Tax Avoidance: Ownership Structure as a Moderating Variable.” Jurnal Dinamika Akuntansi dan Bisnis, 8(2), 128–144.
43.    Susanti, P. E., Badri, R., Putri, A. S. (2020). “Political Connection and Tax Avoidance.” International Journal of Psychosocial Rehabilitation, 24(1), 1139–1159.
44.    Ward, A. J., Brown, J. A., Rodriguez, D. (2009). “Governance Bundles, Firm Performance, and the Substitutability and Complementarity of Governance Mechanisms.” Corporate Governance: An International Review, 17(5), 646–660.
45.    Zejnullahu, N. (2021). “Principal–Agent Problems in Publicly Owned Enterprises: The Failure of the Shareholder.” Journal of Governance and Regulation, 10(4), 70–83.
Accounting and Auditing Research
Volume 18, Issue 70
Spring 2026
Pages 67-84