Financial Performance as Mediator: The Role of Corporate Social Responsibility, Audit Quality, and Financial Distress in Islamic Finance Tax Aggressiveness
Abstract
This study aims to examine the influence of Corporate Social Responsibility (CSR), audit quality, and financial distress on tax aggressiveness with financial performance as a mediating variable. This research employs quantitative methods with a sample size of 168 companies listed on the Indonesian Sharia Stock Index (ISSI) from 2020-2022. Data were processed using multiple linear regression, and Sobel tests for mediation analysis. The results show that CSR and audit quality have a significant positive influence on financial performance. Meanwhile, financial distress has a significant negative effect on tax aggressiveness. CSR has a significant negative influence on the Effective Tax Rate (ETR). Audit quality has a significant positive influence on ETR, and financial distress also has a significant positive effect on ETR. Meanwhile, financial performance has not been proven to mediate CSR against tax aggressiveness. Theoretically, these findings suggest that financial performance is not a significant channel for understanding how CSR affects tax aggressiveness. In practical terms, this means that when a company conducts CSR activities, its impact on the tax strategy is not mediated by how well the company performs financially.
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