The moderating role of audit quality on the impact of tax planning on company value

Objective: The purpose of this research is to investigate the moderating role of audit quality on the effect of tax planning on company value. Investigating whether a high-quality audit can help the company to increase the value of the company by doing correct and reliable tax planning.
Methods: The current research is analytical and correlational in terms of method. Also, this research is considered a quantitative research based on the nature and characteristics of the data used to analyze the hypotheses. In order to collect data, first the library method and then the statistics provided by the Tehran Stock Exchange Organization were used.
Results: The results obtained from the regression model on a sample of 110 companies admitted to the Tehran Stock Exchange in the 8-year period from 2015 to 2022 show that tax planning has a positive and significant effect on the value of the company, and also from the three indicators of the size of the audit firm, tenure The auditor and the type of audit report have been used as indicators of audit quality. It was found that the size of the audit firm and the type of audit report as audit quality indicators have a positive moderating role on the effect of tax planning on company value, but the audit tenure does not have a moderating role on the effect of tax planning on company value. Among the control variables of company size, internal efficiency, asset turnover and current ratio have a positive and significant effect, and financial leverage has a negative and significant effect on the value of the company. Also, according to the obtained results, the life of the companies has no significant effect on the value of the company.
Conclusion: The obtained results can be considered consistent with the theory of value creation, based on this theory, since tax planning activities reduce the transfer of wealth from shareholders to the government, and as a result, market participants have a positive view of these activities, and their reaction is associated with an increase in stock prices. On the other hand, audit quality strengthens this relationship. Because a quality audit can help tax planning, a quality audit ensures that financial and tax information is correct and reliable. Since tax planning is not illegal and auditors with expertise in tax issues can help to implement optimal tax planning and this means reducing tax costs, improving liquidity and increasing company value.