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This study aims to examine the contingent fit between business strategies and environmental uncertainty and its effect on corporate tax avoidance.

This study uses a two-stage linear regression method comprising multinomial logistic regression and panel data regression.

This study finds that under highly uncertain conditions, the contingent fit of prospector strategy is higher than the contingent fit of other two strategies, i.e. defender and analyzer strategy. The study fails, however, to demonstrate that under highly uncertain conditions, this study finds that under highly uncertain conditions the contingent fit of a “prospector” strategy is higher than for “defender” and “analyzer” strategies. The study fails, however, to demonstrate that under highly uncertain conditions the contingent fit of a defender strategy is higher than that of an analyzer strategy. The study also finds that the contingent fit between prospector strategy and environmental uncertainty has a positive effect on tax avoidance, and this effect is higher than for the misfit strategies. Moreover, in such environments the fit level of a defender strategy has a negative effect on tax avoidance while environmental uncertainty has a positive effect on tax avoidance.

This study estimated competition uncertainty using the Herfindahl index to measure competitive intensity in an industry. However, only the data from public listed companies was used due to a lack of data availability for non-public companies. Consequently, further study is recommended to include the total number of companies within an industry as a proxy of competitive intensity.

The results implied that managers, not only in Indonesia but also in other countries as well, specifically emerging countries (generally the environmental uncertainty in emerging countries is high) should consider the contingent factors when making business strategy decisions. Managers must be aware of the contingent fit with environmental uncertainty, and therefore, must assess external conditions prudently. Furthermore, the results of this study showed that managers should pay more attention to the effects of their decisions on corporate tax avoidance, while aligning their business strategy decisions with corporate tax planning strategy to obtain an optimal outcome for the company.

The Directorate General of Taxes and Board of Fiscal Policy, as regulators, need to comprehend environmental uncertainty to issue various policies that can ease the burden of the taxpayer to remain in business, particularly during the turbulence environment so that can prevent the companies doing illegal practices and will eventually reduce the number of tax avoidance.

This study developed alternative measure of tax avoidance, which is tax avoidance latent variable score (TAXLVS). The TAXLVS was derived from confirmatory factor analysis of previous existing tax avoidance measurements. This study is also the first that analyzes the effect of business strategy on tax avoidance using contingency approach.

The purpose of this paper is to investigate the role of the auditor in enhancing the market consequences of voluntary disclosure in East Asian countries that have different reporting environments. This study also investigates the effect of quality of the reporting environment on the role of the auditor in enhancing market consequences of voluntary disclosure.

The methodology used in this research is multiple regressions using the least square method. This research uses East Asian countries context that covers India, Indonesia, Japan, Malaysia, the Philippines, Singapore and Thailand with cross-sectional data during 2016. This research uses four measurements of market consequences, namely, cumulative abnormal return (CAR), volatility of return, bid-ask spread and trading volume.

The results show that voluntary disclosure gives positive consequences to the capital market by increasing the CAR, volatility of return and average trading volume, and decreasing asymmetric information. The results also show that auditor plays a significant role in increasing the credibility of voluntary disclosure by increasing the market consequences of disclosure. The role of the auditor in increasing the effect of voluntary disclosure is higher in a country that adopts international best practice in financial reporting.

The findings of this study need to be interpreted with caution due to several limitations. Although the measurement of voluntary disclosure used in this study is relatively more complete compared to previous research, there are still much voluntary information disclosed that are not included in the checklist. Moreover, this study only considers voluntary disclosure in the annual report. Therefore, future studies can develop a more comprehensive measurement of voluntary disclosure and use sources of information beyond the annual report.

This study shows that in a reporting environment that is less transparent as in the conditions of countries in East Asia, voluntary disclosure and the role of the auditor in increasing value of voluntary disclosure for market participants is crucial. Companies need to increase their voluntary disclosures as they become additional provisions in improving the reporting environment and consider the result of this study when choosing the auditor. Second, audit quality is more important in increasing the credibility of voluntary disclosure in countries that adopt international best practices in financial reporting. The result of this study implies that audit quality is a complementary mechanism of the reporting environment.

This study expands the literature of the role of the auditor on the market consequences of voluntary disclosures and explores the role of the auditor in different reporting environment across countries in East Asia. This study shows that auditor increases the credibility of voluntary disclosure in the different context of accounting and auditing practices.

This study aims to analyze the effect of audit findings and audit recommendations follow-up on the quality of financial reports and the quality of public services in the context of applying accrual accounting systems to local government in Indonesia. This study also examines whether the quality of the financial report affects the quality of public services.

This study employed cross-sectional regression using data from 1,437 observations from 491 districts/cities for 2014–2016. The data illustrates the conditions prior to the adoption of the accrual accounting system (2014), the initial year of application/transition period (2015) and the second year of the expected accrual accounting system (2016).

The results of the study indicate that, in general, the quality of financial reports affects the quality of public services. Regarding the implementation of audits in the public sector, it is also found that audit findings have a negative impact on the quality of financial report and the quality of public services, while audit recommendations follow-up plays a positive role in improving the quality of financial report and the quality of public services.

The implication of the results of this study is closely related to the efforts to realize the ultimate goal of the recent government reforms. In order to increase the quality of public services in the era of higher report requirements through an accrual accounting system, the government should focus on the quality of financial reports, audit findings and the audit recommendations follow-up.

This study provides new insight on the link between the public sector auditing and the quality of accounting in accrual implementation context and the quality of public services.

Global palm oil production is growing rapidly, especially in Southeast Asia, with Indonesia and Malaysia as the biggest producers. Despite significant contributions to these countries’ economies, environmental and social aspects continue to be debated within this industry. The sustainability strategy is very important for the palm oil industry. This study aims to explore the sustainability strategy using six elements, namely, stakeholder engagement, governance and leadership, sustainability view and the economic, environmental and social strategies of Indonesian and Malaysian palm oil companies.

This study observes 21 Indonesian palm oil companies and 44 Malaysian palm oil companies from 2014 to 2018 with a total observation of 280 firm years. The methodology used in this study is a qualitative content analysis of six themes based on the sustainability strategy elements, which was further developed into 40 indicators. Content analysis is carried out on information published in annual reports and sustainability reports.

The study results indicate that stakeholder engagement, governance and leadership and strategic view of the palm oil companies in Indonesia and Malaysia are still likely to be weak. Palm oil companies have not demonstrated their focus on implementing economic, environmental and social strategies. Although the results indicate that there is a greater emphasis on environmental and social strategies than on economic issues, attention to both issues is still very low.

Palm oil companies need to integrate sustainability strategies in their business models and communicate them well to stakeholders to increase their competitive advantage in the palm oil industry. The government also needs to issue stricter rules and incentives to encourage companies to implement sustainability strategies.

The study results provide implications for the communities around palm oil plantations to provide better social control so that companies can implement sustainability strategies in their business processes.

This study highlights the importance of sustainability practices integrated into palm oil companies’ business models, which have not been well implemented in the palm oil industry in the world’s largest producing countries.

The purpose of this paper is to examine the effect of financial derivatives usage and country’s tax environment characteristics on the relationship between financial derivatives and tax avoidance.

This study uses a cross-country analysis with the scope of ASEAN (Association of Southeast Asian Nations) countries which consists of the Philippines, Indonesia, Malaysia, and Singapore.

The level of financial derivatives usage positively affects the level of tax avoidance. This finding indicates that financial derivatives can be used as tax avoidance tool. Furthermore, the positive effect of the level of financial derivatives usage on the level of tax avoidance is lower in countries with a competitive tax environment than in countries with an uncompetitive tax environment. This finding indicates that in country with a competitive tax environment, the use of financial derivatives as a tax avoidance tool can be replaced by the tax facilities provided by that country.

This study uses four countries in the Association of Southeast Asian Nations region and does not test the sample based on the financial derivative types.

Tax authorities need to establish a clear tax regulation in regard to the tax treatment of financial derivatives transactions, e.g. define the definition of financial derivatives for hedging purposes and financial derivatives for speculative purposes; and define specific criteria to separate financial derivatives for hedging purposes from financial derivatives for speculative purposes. It is necessary to determine whether losses arising from derivative transactions are classified as deductible expenses or non-deductible expenses.

To the best of the authors’ knowledge, this study is also the first that provide empirical evidence that the relationship between financial derivatives and tax avoidance activities depends on a country’s tax environment.

This study aims to find empirical evidence on the effect of cross-border acquisition (CBA) on the financial leverage of the acquirer from Asia. It also examines the moderating role of the target countries (developed or developing countries) and experience of the acquirer in the foreign market on the relationship between CBA and financial leverage.

This study uses pooled data regression using 1,073 acquisition transactions by Asian Acquirer from 2012 to 2014.

The results show that before the acquisition, the leverage level of CBA firms is higher than the domestic acquisition firms and after the acquisition. CBA firms increase their leverage. This study also shows that the increasing leverage post the CBA is lower if the target comes from developed countries rather than developing countries and acquirer’s experience in international activities does not affect the impact of CBA on acquirer’s post-acquisition financial leverage.

The study contributes to the literature by providing empirical evidence of the impact of CBA on leverage in the context of Asian countries. By contrast, most of the Asian countries are developing countries, and the institutional environment across countries in Asia is different from developed countries from other regions.

With the increasing understanding of stakeholders on sustainability aspects for the business, companies are nowadays paying more attention to environmental and social issues. This study aims to examine the relationship between Environmental, Social, Governance (ESG) Index and firms’ value. Moreover, this study also examines how the controversy score influences the company’s value. The authors employ a dataset of 1.356 companies from 22 countries in Asia which representing the Asian market from 2014 to 2018. This study shows that ESG index score and controversy score are statistically significant, affecting the firms’ value, measured by Tobin’s Q. From the individual tests, the findings of this study indicate that ESG-environmental, ESG-social, and ESG-governance, individually affect the firms’ value. This study suggests that providing disclosure on ESG aspects is essential, not only to increase company value but also to show the company resilience and sustainability. On the other hand, ESG controversy score surprisingly indicates a positive relationship with the company value. The result implies that controversies provide a positive signal to the investor because controversies could provide a signal to the public of companies’ willingness to have transparency and accountability.