Do women in board represent less corporate tax avoidance? A moderation analysis

Abstract

Purpose: The purpose of this paper is to empirically examine how women in board represent moderates the relationship between audit quality and corporate tax avoidance. Design/methodology/approach: The study is based on a sample consisting of 270 UK firms over the 2005–2017 period. This study is motivated by moderating regression analysis. Findings: The results show that audit quality influences the corporate tax avoidance. Audit quality measured by two proxies audit specialization and audit fees has a negative effect on corporate tax avoidance. Board gender diversity “BGD” moderates the relationship between audit quality and tax avoidance. The impact of the BGD level increases as the presence of woman in the board escalated from 40 to 60 percent but, then, weakens at 10 percent level. Practical implications: The findings may be of interest to the academic researchers, practitioners and regulators who are interested in discovering relation between audit quality and tax avoidance with the presence of woman in the board. This study should be of interest to tax policymakers concerned about declining corporate tax revenues. Originality/value: This paper extends the existing literature by examining the moderating effect of BGD on the relation between audit quality and corporate tax avoidance using the sensitivity analysis.