The Influence of Director Networks and Independent Directors on Tax Aggressiveness in Financial Reports

Abstract

The objective of this study is to examine the effects of independent directors and director networks on tax aggressiveness. Directors, and their networks, may become more sensitive to financial reporting issues by sharing information with directors in the network who are experiencing similar problems. The sample consists of 499 companies in Malaysia that are publicly listed on the Kuala Lumpur Stock Exchange in 2015. The study outcome shows that the proportion of independent directors does not influence tax aggressiveness but director networks have a positive relationship with tax aggressiveness, whereby better director networks result in a higher level of company tax aggressiveness.