DAMPAK BOOK-TAX CONFORMITY TERHADAP EARNINGS RESPONSE COEFFICIENT SERTA PERAN KUALITAS AUDIT SEBAGAI VARIABEL MODERASI

Abstract

High book-tax conformity is a positive signal for investors, when investors see tax management as an effort by management to optimize the amount of tax burden paid and maximize the amount of return that investors get. High book-tax conformity can also be a negative signal for investors, when investors see tax management as an action that causes a decrease in the quality of information in financial reports. On the other hand, there is one variable that is believed to influence the relationship between book-tax conformity and earnings response coefficient, namely audit quality. Audit quality is strengthen or weaken the relationship between book-tax conformity and earnings response coefficient. The results of multiple linear regression analysis show that the level of book-tax conformity affects the earnings response coefficient and audit quality does not affect the earnings response coefficient. Meanwhile, audit quality does not act as a moderating variable in the relationship between the two. Thus, it can be concluded that manufacturing industry investors in Indonesia pay attention to the amount of tax burden reported by companies, but do not pay attention to audit quality in making decisions.