THE EFFECT OF POLITICAL CONNECTIONS AND LEVERAGE TO TAX AVOIDANCE WITH AUDIT QUALITY AS A VARIABLE MODERATING

Abstract

Abstract: The Effect of Polotical Connections and Leverage to Tax Avoidance with Audit Quality as A Moderating Variable. The purpose of the research is to know (1) Effect of connections politics against avoidance, (2) Effect of leverage against the avoidance of taxes, (3) Effect of the audit quality of the relationship between the connection political and avoidance of taxes, and (4) Effect of the audit quality of the relationship between leverage and avoidance. This Research is research explanatory using the secondary data. Population of this research is 143 manufacturing company in Indonesia Stock Exchange (IDX). Sample of this research is 53 companies with 3 years data so the sample is 159. Data analysis was performed by logistic regression analysis. Results of the study show that : (1) connected Political influence positively and significantly on the tax avoidance with the level of significance of 0,010, (2) Leverage effect negatively and significantly on the Avoidance of Taxation are carried by the company with the level of significance of 0,000, (3)Audit Quality is not able to moderate the influence of Political Connections on Tax Avoidance . This is indicated by the test results that show the significance of 0,353, (4) Audit Quality is not able to moderate the effect of Leverage on Tax Avoidance. This is indicated by the test results that show the significance of 0,900.

Keywords: Political Connection, Tax Avoidance, Leverage and Audit Quality