Tax avoidance and financial reporting readability with emphasis on the expertise of the board of directors and audit committee in the Tehran Stock Exchange

Subject Areas :

Parisa Saadat Behbahaninia ^{1 *} , bahar asadi ²

1 - Department of Accounting, Faculty of Social Sciences and Economics, Alzahra University, Tehran, Iran
2 - Department of Accounting, Faculty of Social Sciences and Economics, Alzahra University

Received: 2023-08-31 Published : 2026-01-25

Keywords: Audit committee, Expertise of the Board of Directors, Financial Reporting Readability, Tax Avoidance.,

Abstract :

TThe aim of this study is to investigate the relationship between tax avoidance and financial reporting readability with emphasis on the expertise of the board of directors and audit committee in Tehran Stock Exchange. The main role of financial reporting is to provide transparent information to users, which can be considered as one of the tools for the responsibility of managers' accountability. Managers have opportunities to exercise judgment in financial reporting and can use their knowledge of business activities to improve the readability of financial statements as a means of transmitting information to potential investors and creditors. The aim of this study is to investigate the relationship between tax avoidance and financial reporting readability with emphasis on the expertise of the board of directors and audit committee. For this purpose, data of 100 companies listed in Tehran Stock Exchange during 2017-2021 were used. The findings show that there is a negative and significant relationship between tax avoidance and financial reporting readability. So companies that have more tax avoidance try to reduce financial reporting readability more. The board's expertise also moderates the relationship between tax avoidance and financial reporting readability. This means that the higher the expertise of the board, the more negative the relationship. Finally, the Audit Committee adjusts the relationship between tax avoidance and financial reporting readability. This means that the higher the number of audit committee members, the more negative the relationship.