Abstract

This study aims to analyze the relationship between the audit committee and managerial entrenchment on tax aggressiveness and its implications for the company’s financial performance. A total of 71 manufacturing companies on the Indonesian Stock Exchange during the 2015-2017 periode were research samples. The results of data analysis using Partial Least Square show that managerial entrenchment and tax aggressiveness have a significant negative effect on financial performance. Managerial entrenchment reduces the company’s demand for monitoring of managers which results in a decrease in financial performance. Meanwhile, tax aggressiveness can cover managers’ rent extraction actions that impact on declining financial performance.
 Keywords: Audit Committee; Managerial Entrenchment; Tax Aggressiveness; Financial Performance.

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