Exploring the Impact of Corporate Governance on Tax Avoidance

This report investigates the critical link between corporate governance and tax avoidance, focusing on the impact of internal and external factors on a company's financial strategies. The analysis, drawing from the Journal of International Accounting, Auditing and Taxation, explores how effective corporate governance, particularly through the board of directors, influences tax avoidance strategies. The report highlights the importance of aligning the interests of stakeholders and the role of corporate governance in mitigating potential issues related to the principal-agent problem. The study emphasizes the need for a comprehensive approach to corporate tax avoidance, considering the involvement of stakeholders and the members of the corporate governance. The author reflects on the importance of strong corporate governance for achieving long-term objectives and the significance of tax avoidance in a company's financial performance. The report concludes that effective corporate governance positively impacts a company's financial position and its ability to manage tax-related issues.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
CONTEMPORARY ISSUES IN ACCOUNTING
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1CONTEMPORARY ISSUES IN ACCOUNTING
Discussion
The topic of the chosen article is impact of the corporate governance on the corporate
tax avoidance. The article is further taken from the journal of international accounting,
auditing and taxation. The term corporate governance is referred to as the particular sets of
norms which are applied by the upper level management of the organization. The internal
along with the external factors also creates impacts on the interest of shareholders. The board
of directors of the company are further responsible for such kind of framework laid ion the
corporate governance.
Based on the purpose of this article it can be said that the most of the upper level
management of the company is further responsible of the problems regarding the principle
agent. The mechanism of the corporate governance is further related to the avoidance of tax.
Each and every company’s main objective is to avoid the payment of tax on a large scale. For
the reason the company tries to make a lot of investment s in order to lower the profit so that
the company doesn’t have to pay a lot of money for tax. The board of directors and the key
stakeholders of the business attends the meeting for the purpose to make the concept of
corporate governance within the management system of the company much more efficient
and effective for the purpose of avoiding tax (Kovermann and Velte 2019).
If the principle agency concept in the business does not work then it will be huge
problem from the company for the purpose of avoiding the potential tax in the business. In
this case it is significant to determine the corporate tax avoidance which is considered as the
comprehensive approach by taking the stakeholders and the members of the corporate
governance into association.

2CONTEMPORARY ISSUES IN ACCOUNTING
Critical Reflection
I think that if the corporate governance of the firm is effective and efficient, then the
firm will be able to accomplish its desired long-term objectives. Above all the main priority
of the company is avoid the tax or rather the tax avoidance in that case plays a significant
impact on the business prospects of the company. I think that the decisions in that case
always rest upon the higher-level authority and further significant steps in that case are
needed to be adopted by them for the purpose of rectifying the glitches and errors within the
internal management system of the company. As per this article I also think that the
effectiveness in the corporate governance of the firm will actually put the overall financial
position of the firm at the top notch along with the process of avoiding the tax.

3CONTEMPORARY ISSUES IN ACCOUNTING
References
Kovermann, J. and Velte, P., 2019. The Impact of Corporate Governance on Corporate Tax
Avoidance–A Literature Review. Journal of International Accounting, Auditing and
Taxation, p.100270.
References

4CONTEMPORARY ISSUES IN ACCOUNTING